EXECUTIVE SUMMARY

OBJECTIVE OF THE STUDY

TO STUDY INSURANCE AS AN INVESTMENT :

TO ANALYSE GROUP INSURANCE PRODUCTS &

TO STUDY UNIT – LINKED LIFE INSURANCE AN INVESTMENT

RESEARCH DESIGN

DESCRIPTIVE TYPE OF RESEARCH DESIGN.

DATA TYPE

SECONDARY DATA USED IN RESEARCH / ANALYSIS.

SAMPLE

5 YEARS (1999-00 TO 2006-07) DATA USED :

DATA TYPE

5 YEARS (199 TO 2006-07) DATA USED :

DATA COLLECTION TOOLS :

PRODUCT PLANS

INTERNET SITES ON INSURANCE :

STAFF MEMBERS AT BHAVNAGAR BRANCH &

REPORTS FROM INTERNATIONAL ANALYSING AGENCIES.

METHODOLGY :

DATA COLLECTED THROUGH VARIOUS TYPES OF REPORTS IS ANALYSED BASED ON QUALITY, QUANTITY AND NUMBER OF INSURER IN DIFFERENT CATEGORIES CLASSIFIED BY THE COMPANY, AGENCIES AND OTHER GOVERNMENT BODIES.

OBSERVATION :

PORTFOLIO OF PLANS WERE DIVIDED INTO INDIVIDUAL, GROUP & NRI

THERE ARE TOTAL 35 TO 40 PLANS HAVING FLEXIBILITY AS PER INDIVIDUAL OR GROUP NEEDS ;

THERE IS A TERMENDOUS GROWTH RATE OF MORE THAN 150% IN INDUSTRY AND BIRLA IS THE SECOND BEST IN LIFE INSURANCE PROVIDING UNIT – LINKED SOLUTIONS &

EACH PLAN CAN BE SATISFYING THE DYNAMIC NEEDS OF INDIVIDUALS & GROUP.

SUGGESTION :

THERE IS A SEVER NEED TO MAKE UNIT – LINKED LIFE INSURANCE PORFOLIOS IN THE INDIAN PROSPECTIVE MARKET OF INDIVIDUALS WHO ARE UN-INSURED &

THE LIFE INSURER SHOULD BE CONVICED THAT HIS INVESTMENT IN BIRLA SUNLIFE POLICY OR BOND WOULD EARN HIM GREATER RETURNS THAN ANY OTHER POLICY / BOND.

GENERAL INFORMATION

NAME : BIRLA SUN LIFE INSURANCE CO. LTD.

ADDRESS : 3RD FLOOR, TURNING POINT, ATABHAI ROAD,

BHAVNAGAR.

BRANCH MEMBERS, BHAVNAGAR

MR. HARSHAL DAVE, BRANCH MANAGER

MR. J.C. GOHIL, AGENCY MANAGER

Miss CHANDINI DHROOVE, TRAINING & RECRUTMENT EXECUTIVE

REGISTERED OFFICE :

6TH FLOOR, VAMAN CENTRE,

MAKWANA ROAD,

OFF. ANDHERI KURSA ROAD,

NR. MAROLNAKA,

ANDHERI (E) MUMBAI- 400059.

COMPANY PROFILE

PORTFOLIO OF VALUE AND

GROWTH BUSINESSES

Aditya Birla Nuvo : Building a balanced portfolio

ADITYA BIRLA NUVO

Value Business High Growth Business

VFY Carbon Textiles Fertilizers Insulators Garments Financial Subsidiaries Telecom

Black Services JV

JV(21%)

Mutual Fund IT

(50%) (70%)

Life Insurance ITeS

(74%) (100%)

Distribution

(50%)

About Birla Sun Life Insurance Company Limited : Global vision Indian values : - The aditya Birla Group is India’s first truly multinational corporation, Global creation for its multiple stakeholders. AUS$ 9.7 billion conglomerate, with a market capitalization of US$ 15 billion, it is anchored by an extraordinary force of 82,000 employees belonging to over 20 different nationalities. Over 23 percent of its revenues flow from its operations across the world. The Group’s products and services offer distinctive customer solutions. Its 74 state – of the art manufacturing units and sectoral services span India, Thailand, Laos,

Indonesia, Malaysia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany, Hungary and Poland.

A premium conglomerate, the Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple fibre, non-ferrous metals, cement, viscose filament yam, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators, financial services, telecom, BPO and IT services.

Globally the group is : No.1 in viscose staple fibre The fourth largest producer of insulators The fourth largest producer of carbon black The eleventh largest cement producer. Among the most cost – efficient aluminum and copper producers. The

fourth largest aluminum producer in Asia and the largest single location custom copper smelter.

The best energy efficient fertilizer plant. Among the world’s top 15 BPO companies and among India’s top three.

In India, the Group holds a frontrunner position as : A premier branded garments player The second largest player in viscose filament yarn Among the first five mobile telephony players Leading player in Life Insurance and Asset Management

People – The backbone for Growth Diverse culture

o Operations across 4 continents o Employ 20 different nationalities

Favourable organization demographicso 48% of employees are below 38 years.

Talent Management effortso Lateral inductions & Global recruitmentso Gyanodaya and e-learning programmes.

Performance Management Systems’ towards building meritocracy.

o Individual variable pay across businesso Job evaluation by international experts

BEYOND BUSINESS

A value – based, caring corporate citizen, the Aditya Birla Group inherently believes in the trusteeship concept of management. Part of the Group’s profits is ploughed back into meaningful welfare – driven initiatives that make a qualitative difference to the lives of marginalized people. These activities are carried out under the aegis of the Aditya Birla Centre for Community Initiatives and Rural Development, which is spearheaded by Mrs. Rajashree Birla.

Moreover : a caring corporate citizen

* Towards improving quality of life of the under-privileged. - Aditya Birla Centre for Community initiatives and Rural

Development.- Partnership with the Governments, SIFPSA, CARE India & BBC

World wide, Leprosy Mission, UNICEF and WHO.

* Over 2 million beneficiaries, across several states in India

* Aditya Birla Group of Schools – The third largest chain of schools in India.- Presence in 12 states with over 40,000 students.

* Reaching the poorest of the poor with key focus on - Health care- Mother and Child care- Education- Sustainable livelihood.- Women Self Help groups & Social Welfare.

SOCIAL VISION :

To actively contribute to the social and economic development of the communities in which we operate and beyond. In so doing, build a better, sustainable way of life for the weaker sections off the society and raise the country’s HUMAN DEVELOPMENT INDEX

MISSION & VISION AND VALUES

Our Vision

To be a premium global conglomerate with a clear focus on each business.

Our Mission

To deliver superior value to our customers, shareholders, employees and society

at large

Our Values :

Integrity - Honesty in every action

Commitment - Deliver on the promise

Passion - Energized action

Seamlessness - Boundary less in letter and spirity

Speed - One step ahead always.

HISTORY & DEVELOPMENT OF BSLI CO. LTD.

The Aditya Birla Group has a turnover close to Rs.33000 crores with a market

capitalization of Rs.53400 crores (as on 31st March 2006). It has over 72000

employees across all its units worldwide. Its Chairman – Mr. Kumar Mangalam

Birla, leads it. Some of the key organizations within the group are Hindalco,

Grasim, Aditya Nuvo, etc.

Sun Life Financial Inc. and its partners today have operations in key markets

worldwide, including Canada, the Unites States, the United Kingdom, Hong

Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. Sun Life

Financial inc. had assets under management of over US$343 billion, as on 31st

March 2006. Sun Life Financial Inc. is a leading player in the life insurance

market in Canada.

Birla Sun Life Insurance (BSLI) in its 5 successful years of operations has

contributed significantly to the growth and development of the life insurance

industry in India. It pioneered the launch of unit Linked Life Insurance plans

amongst the private players in India. It was the first player in the industry to sell

its policies through the Banc assurance route and through the Internet. It was the

first private sector player to introduce a pure Term plan in the Indian Market.

This was supported by sales practices, which brought a degree of transparency

that was entirely new to the market.

The process of getting sales illustrations signed by customers, offering a free

look period on all policies, which are now industry standards were introduced

by BSLI. Being a customer centric company, BSLI has invested heavily in

technology to build world class processing capabilities.

BSLI has covered more than a million lives since inception and its customer

base in spread across more than 1000 towns and cities in India. All this has

assisted the company in cementing its place amongst the leaders in the industry

in terms of new business premium income. The company has capital base of

Rs.460 crores as on 31st March 2006.

AT THE HELM

The Aditya Birla Management Corporation Limited is the Group’s apex

decision – making body and provides strategic direction to Group companies.

It’s Board of Directors comprises :

Mr. Kumar Mangalam Birla, Chairman

Mr. S. Aga

Mr. D. Bhattacharya

Mr. S. K. Jain

Dr. S. Misra

Mrs. S. Misra

Dr. B. K. Singh

Mr. K. K. Maheshwari

Mr. Vikram Rao

ORGANISATION STRUCTURE OF BHAVNAGAR BRANCH

BRANCH MANAGER

AGENCY MANAGER-1 ACCOUNTING HEAD TRAINING &

RECRUITMENT OFFICER

AGENCY MANAGER – 2 MARKET SURVEY EXE.

AGENCY MANAGER – 3 OFFICE EXE.

AGENCY MANAGER - 4

INSURANCE – AN OVERVIEW

A system under which the insurer, for a consideration usually agreed upon in

advance, promises to reimburse the insured or to render services to the insured

in the event that certain accidental occurrences result in losses during a given

period. It thus is a method of coping up with risk. Its primary function is to

substitute certainty for uncertainty as regards the economic cost of loss –

producing events.

Insurance relies heavily on the “law of large numbers” In large homogeneous

populations it is possible to estimate the normal frequency of common events

such as deaths and accidents.

Losses can be predicted with reasonable accuracy, adn this accuracy increases

as the size of the group expands, From a theoretical standpoint, it is possible to

eliminate all pure risk if an infinitely large group is selected.

From the standpoint of the insurer, an insurable risk must meet the following

requirements :

1. The objects to be insured must be numerous enough and homogeneous

enough to allow a reasonably close calculation of the probable frequency

and severity of losses.

2. The insured objects must not be subject to simultaneous destruction.

For example, if all the buildings insured by one insurer are in an area

subject to flood, and a flood occurs, the loss to the insurance underwriter

may be catastrophic.

3. The possible loss must be accidental in nature, and beyond the control

of the insured. If the insured could cause the loss, the element of

randomness and predictability would be destroyed.

4. There must be some way to determine whether a loss has occurred and

how great that loss is. This is why insurance contracts specify very

definitely what events must take place, what constitutes loss, and how it

is to be measured.

From the viewpoint the insured person, an insurable risk is one for which the

probability of loss is not so high as to require excessive premiums. What is

“excessive” depends on individual circumstances, including the insurer’s

attitude toward risk”.

All the same time, the potential loss must be sever enough to cause financial

hardship if it is not insured against. Insurable risks include losses to property

resulting from fire, explosion, windstorm, etc. losses of life or health and the

legal liability arising out of use of automobiles, occupancy of buildings,

employment, or manufacture.

Uninsurable risks include losses resulting from price changes and competitive

conditions in the market. Political risks such as war or currency debasement are

usually not insurable by private parties but may be insurable by governmental

institutions.

Very often contracts can be drawn in such a way that an “uninsurable risk” can

be turned into an “insurable” one through restrictions on losses, redefinitions of

perils, or other methods.

HISTORY OF INSURANCE

LLOYD’S REGISTERING OF SHIPPING : -

The world’s first and largest ship-classification society, begun in 1760 as a registry for ships likely to be insured by marine insurance underwriters meeting at Lloyd’s coffeehouse in London.

It is concerned with the establishment of construction and maintenance standards for merchant ships and the provision of a technical service to assist owners in maintaining such standards. Its Register Book, begun in 1764, is issued annually and lists all merchant ships of 100 or more tons gross. The society also publishes yacht registers and statistical sum Historical development of insurance.

Insurance in some form is as old as historical society. Merchants of Babylon knew so-called botomry contracts as early as 4000-3000 BC. Bottomy was also practiced by the Hindus in 600 BC and was well understood in ancient Greece as early as the 4th century BC. Under a bottomry contract, loans were granted to merchants with the provision that if the shipment was lost at sea the loan did not have to be repaid. The interest on the loan covered the insurance risk.

Ancient Roman law recognized the bottomry contract in which an article of agreement was drawn up and funds were deposited with a money changer, Marine insurance became highly developed in the 15th century.

In Rome there were also burial societies that funeral costs of their members out of monthly dues.

The insurance contract also developed early. It was known in ancient Greece and among other maritime nations in commercial contact with Greece.

ENGLAND

Fire insurance arose much later, obtaining impetus from the Great Fire of London in 1666. A number of insurance companies were started in England after 1711, during the so-called bubble era.

Many of them were fraudulent, get – rich –quick schemes concerned mainly with selling their securities to the public. Nevertheless, two important and successful English insurance companies were formed during this period the London Assurance Corporation and the Royal Exchange Assurance Corporation. Their operation marked the beginning of modern property and liability insurance.

No discussion of the early development of insurance in Europe would be complete without reference to Lloyd’s of London, the international insurance market. It began in the 17th century as a coffeehouse patronized by merchants, bankers, and insurance underwriters, gradually becoming recognized as the most likely place to find underwriters for marine insurance.

Lloyd’s was recognized in 1769 as a formal group of underwriters accepting marine risks. (The word underwriter is said to have derived from the practice of having each risk taker write his name under the total amount of risk that he was willing to accept at specified premium).

With the growth of British Sea Power, Lloyd’s became the dominant insurer of marine risks, to which were later added fire and other property risks. Today Lloyd’s is a major reinsurer as well as primary insurer, but it does not itself transact insurance business; this is done by the member underwriters, who accept insurance on their own account and bear the full risk in competition with each other marines on shipbuilding, fleets and marine casualties.

FINANCIAL & INSURANCE SECTOR COMPANIES IN GROUP

FINANCE AND INSURANCE

Financial Services

Company Key products and brands CountryBirla Global Finance Ltd. Financial services IndiaBirla Sun Life Insurance Company Ltd.

Insurance solutions

Birla Sun Life Asset Management Mutual fundsBirla Sun Life Distribution Company Ltd.

Investment planning services

Birla Insurance Advisory Services Ltd.

Non – life insurance advisory services.

JOINT VENTURES :-

Birla Sun Life Insurance

Birla Sun Life Asset Management Company Ltd.

Birla Sun Life Distribution Company Ltd.

Tanfac Industries Ltd.

Company Partner Key products/services

Birla Sun Life Insurance Company Ltd.

Sun Life (Canada) Insurance Solutions

Tanfact Industries Ltd. TIDCO (Tamilnadu Industrial Development Corporation)

Fluorine Chemicals

Birla Sun Life Asset Management Company Ltd.

Sun Life (Canada) Mutual Funds

Birla Sun Life Distribution Company Ltd.

Sun Life (Canada) Investment planning services

A joint venture between the Aditya Birla Group and Sun Life Financial, Birla Sun Life forayed into the life insurance and retirement planning business by pioneering the unique Unit-Linked Solution in India.

GROWTH IN INSURANCE SECTOR

Birla Sun Life Insurance : Promising prospects in a high growth sector

Exciting prospects in Life Insurance

- High potential, given low penetraion

- Demographic profile and economic

outlook predict rapid growth

- Private sector entry spurs product

and market development

Birla Sun Life, a strong player

- Amongst leading private life insurers

- Strong expanding distribution networks

Several first mover advantages

- Unit Linked Products

- Multi – Channel distribution

Life insurance market to tripe to $ 45 bn by 2013

Birla Sun Life : Exponential Premium Growth

Source : Company Data ; Swiss Re, Kotak Research

UNIT LINKED SOLUTIONS

A MARRIAGE BETWEEN LIFE INSURANCE AND INVESTMENT

Pioneered by Birla Sun Life Insurance, Unit-Linked Solutions bring together the best of Life Insurance and investment, aimed at the corporate sector as well as individuals. Introduced in line with the latest global trends, these plans put a customer in total control of their money. They are simple, transparent and flexible while offering 3 percent minimum guaranteed overall returns on the premium.

The Company has achieved leadership in Group Funds among private life insurance players. It is also a lead player in Corporate Agency and Banc assurance models of distribution.

BSLI has recorded a 385 per cent growth in new business in 2002-03. The Company holds the distinction of winning over Rs.170 crore in new business – annualized premiums.

With over 1,67,000 families across India who have invested their trust with Birla Sun Life Insurance, the Company are now poised to be a leading private insurance company in India.

Areas of Excellence : Leadership in Unit-Linked plans – 95 percent of sales come through Unit-

Linked plans. The Company is one of the largest sellers of Unit-Linked plans in one of the fastest growing life insurance markets in the world;

The Company in a pioneer in introducing unique product features like a ‘free look period’ and best sales practices such as the use of “sales illustrations”. The regulator has now introduced the ‘free look period’ as an industry norm. The mandatory use of a sales illustration within BSLI ha set up a standard of transparency in the industry.

A high persistency ratio of 95.46 per cent by premium ; BSLI has consistently recorded the highest average Sum Assured of

Rs.3,26,000 and average premium of Rs.19,500 per policy in the industry with a Unit-Linked product range;

A very efficient utilization of capita; Low claims ratio of 0.06 per cent of total policies &

The first advisor to quality to the “Top of the Table” (TTO) amongst all private life insurance companies.

GROUP LIFE PLANS

1. Group Protection Solutions :

Designed to provide Life Insurance protection to the employees of your

organization at an affordable cost :

2. Group Superannuation Plan :

Provides for a Retirement Fund to purchase annuity on the life of

Members on their retirement.

3. Group Gratuity Plan :

Gratuity is a statutory benefit to the employees under the Payment of

Gratuity Act 1972.

4. Credit Guard Plan :

Designed to secures your risk by protecting your most valuable business

asset.

5. Single Premium Group Term Plan :

The low cost and minimum fuss method of providing life insurance cover

to such groups is through term insurance with single premium payment.

GROUP LIFE PLAN

(1) GROUP PROTECTION SOLUTIONS :

Unique Features : The Group Protection Solutions is designed to provide Life Insurance protection to the employees of your organization at an affordable cost.

Duration : The Group Protection Solutions is a yearly renewable policy.

Coverage : Flat cover or Uniform cover ; Graded cover according to the designation / ranks of

employees in the group & Multiple of salary.

MaturityNo benefits are payable at the end of policy period or on earlier termination of policy.

Beneficiary : Gets the Coverage Amount on death of Member while the policy is in force.

Eligibility :All employees between the ages of 18 of 60 are eligible for this plan. It is possible to extend the maximum age beyond 60 years where the normal retirement age exceeds 60 years to a max of 65 years.

All the employees should satisfy a simple insurability condition that they are actively at work at the inception of the plan.

The coverage will be allowed as long as the policy is in force and the Member is in employment of the scheme’s employer.

Termination of Coverage

The Critical Illness Rider Coverage in respect of any Member under this Policy will terminate on the earliest of the following dates :

Date of termination of Life Insurance Coverage in respect of the Member;

Date of payment of Coverage amount under this Rider Coverage &

The date on which the Member is diagnosed as suffering from any one of the Insured Critical Conditions.

Exclusions :

Birla Sun Life Insurance will not pay any part of this Coverage Amount if an Insured Critical Condition is a direct or indirect result of any of the following.

Any diagnosis of an Insured Critical Condition made within 90 days from the date of becoming insured under this Policy;

Any pre-existing or recurring Insured Critical Condition which is diagnosed or which the Life Insured contracted prior to the date of becoming insured under this Policy.

Attempted suicide or self-inflicted injury, whether the Life Insured is medically sane or insane.

Taking or absorbing, accidentally or otherwise, any intoxicating liquor, drug, narcotic, medicine, sedative or poison, except as prescribed by a licensed doctor other than the Life Insured.

Inhaling any gas or fumes, accidentally or otherwise, except accidentally in the course of duty &

Committing an assault, a criminal offence, an illegal activity or any breach of law.

Group Protection Solution Plan :

Birla Sun Life Insurance launches its Group Insurance Business with its Group Term Plan ? Birla Sun Life Group Protection Solutions on 8th October, 2001. Birla Sun Life Insurance announced its entry into the group insurance business, on 8th October 2001 with the launch of Birla Sun Life Group Protection Solutions. It is the first of the group products to be launched by Birla Sun Life Insurance in this business category and provides companies with a new avenue to offer protection to their employees.

Birla Sun Life Group Protection Solutions takes insurance to a new market segment. The product design puts both employers and employees in a win – win situation. I expect an enthusiastic response from the corporate sector, where we have established strong relationships through our other financial service venture? Said Mr. S.K. Mitra, Director, Financial Services for the Aditya Birla Group while addressing a well attended press conference.

Birla Sun Life Group Protection solutions gives employers, the option of providing their employees life insurance cover at a very affordable cost. The plan is available to professional and borrower – lender groups as well.

Birla Sun Life Group Protection Solutions is a yearly renewable policy. It is a term plan with four riders : Accidental Deah, Accidental Death and Dismemberment, Critical Illness and Term, and there are two options that can be added, which are the options to cover spouse and the option to convert to an individual policy.

The plan can be customized to suit the needs of each customer group. The cover could be uniform or graded according to the categories in the company or as a multiple of the salary.

Some of the unique features of the Birla Sun Life Group Protection Solutions are:

Customization based on the group’s needs.

Wide range of riders and options A world class integrated technology platform that helps to provide exhaustive back end operations.

Phased implementation of the customer friendly interactive web enabling and common data warehousing, which will allow a person to check for any information regarding the insurance that he has with the company. (2) GROUP SUPERANNUATION PLAN :In this policy, the investment risk in investment portfolio is borne by the policy holder.

Being a preferred employerThe driving force behind an organization is its people. And the driving force behind the people can be the promise of a secure future and a comfortable retired life. A promise that can be made by the employer through an appropriate retirement solution. In short, a retired life the employee can look forward to.

As a thoughtful employer, it’s imperative on your part to chalk out a comfortable retirement plan for your employees. A gesture that will go a long way in not only establishing your image as the most preferred employer but also serving as a motivational and retention tool for your employees. That’s precisely where the Birla Sun Life Group Superannuation Plan comes in, a retirement plan designed to give your employees a happy and tension free life.

Group Superannuation Plan – Retiring in comfort :Under this plan you can make a contribution for each member, so as to build a retirement corpus, which can provide him / her financial security at retirement. You can take this plan for all your employees or a group of specified employees. Your contribution can be built in the employees remuneration package and considered as a part of cost to the Company (CTC) Thus this plan fulfills employee welfare, financial planning as well as tax planning needs. All in all, a plan that can be customized to the unique requirements of your organization.

Tax BenefitsThe contributions to an approved Superannuation Fund are allowable as business deduction under section 36(1)(iv) of the Income Tax Act, 1961. The contribution should not exceed 27% of the basic salary less the amount contributed by the employer towards a Recognized provident Fund. Additionally any contributions to the Superannuation Fund in excess of Rs. 1 lakh per employee will be subject to Fringe Benefit Tax (FBT).

The benefits received by the employee from a Superannuation Fund exempt from tax under section 10(13) of the Income Tax Act in the following cases : Death of the beneficiary. Commuted value on retirement. Refund of contributions in case of death.

Deduction will be allowed under section 80C of the Income Tax Act for a contribution by an employee to an approved Superannuation Fund subject to the limits specified under section 80CCE of the Income Tax Act. Asset Mix with the minimum and maximum limits of each in investment category.

Asset Class Fixed Interest

Fund

Bond Fund Gilt Fund Secure Fund

Stable Fund Growth Fund

Government and Government approved securities.

20%-70% Nil 50%-100% 30%-90% 30%-80% 15%-55%

Corporate Bonds rated AA or above by Crisil

30%-75% 80%-100% Nil 0%-30% 0%-30% 10%-30%

Money market and other liquid assets.

0%-20% 0%-20% 0%-20% 0%-20% 0%-20% 0%-20%

Infrastructure sector as defined by the IRDA

Nil Nil Nil 0%-25% 0%-25% 0%-25%

Listed equities Nil Nil Nil 10%-20% 20%-35% 35%-50%

The Risk Profiles of the Different asset classes is as under : -

Type of Asset Risk ProfileGovt. & Govt. approved securities LowCorporate Bonds MediumInfrastructure sector as defined by IRDA MediumMoney Market and other Liquid Assets Very LowListed Equities HighReady Referencea) Eligibility :

All employees (members) above the age of 18 are eligible for this plan. Existing fund approved by the Income Tax Commissioner should be administered through Trustees under a Trust.

b) Contribution :Employer normally provides the contribution. This can be built into the remuneration package of the employee. Even an employee can contribute additional amount towards the fund. Contributions can be made annually, semi-annually, quarterly or monthly or in single lump sum.

c) Post Service ContributionsAt the option of the Trustees / Employer, past service contributions can be made in respect of the members to be covered under the plan. This past service contribution can be paid in installments.

d) Choose your investment option : The contribution will be credited to each members account. The policyholder has the freedom to select from one or more of the 6 Investment Fund options. Alternatively, Employer / Trustee can also make the investment choice on behalf of all the members.

e) Fund Management :Member wise contribution will be administered on a unitized basis. In case of contribution both from employer and member, contribution

accumulation is maintained separately in the system. NAVs are calculated on every business day. The Net Asset Value per unit of each Investment Fund will be calculated as per the prevailing IRDA guidelines.

f) Unit Allocation : Units in the Investment Funds will be allocated by diving the Contribution allocated to the Investment Fund by the applicable NAV of the Investment Fund calculated as per prevailing IRDA guidelines.

g) Calculation of NAV : The net asset value per unit of each Investment Fund will be calculated as per the prevailing IRDA guidelines.

The valuation of scheme’s investments will be in accordance with the provisions of IRDA Regulations / Insurance Act, 1938, as amended from time to time. Under extraordinary circumstances, such as extreme volatility of the value of the investments of an Investment Fund, extended suspension of trading on the stock exchanges, natural calamities, riots and similar events, the Company reserves the right to suspend the cancellation or allocation of Units. The Company also reserves the right not to value one or more Investment Funds or to change the formula for calculating NAV under these circumstances. The changes to the formula would be made subject to IRDA Approval.

h) Fund Management Charge : -Birla Sun Life Insurance shall charge Fund Management Charge upto 1.5% of the Fund Value. The above charges will be recovered by way of adjustment of NAVs.

i) Surrender Charges : In case of termination of policy by the policy holder, Fund Value less Surrender Charges as per the following table will be paid. The surrender Charges is levied as a percentage of Fund Value.

Upon termination by the Policyholder in the

Surrender Charge (as a percentage of the Policy Fund Value)

First Policy Year 0.5Second Policy Year 0.25Third Policy Year Nil

j) Switching Charge :

Every year, two free switches between any of the six investment funds are allowed. A switching charge upto a maximum 0.75% of the amount transferred is levied from the third switch onwards.

(3) GROUP GRADUITY PLAN In this policy, the investment risk in investment portfolio is borne by the policyholder.

Gratuity : The Loyalty Reward Loyalty pays. And the proof is Gratuity. It’s a statutory benefit to the employees under the Gratuity Act, 1972. According to this Act, the employee becomes eligible for 15 days pay for each completed year of service. This is payable on death of the employee during his tenure of service or if the employee retires after 5 years of continuous service.

Gratuity benefits are a statutory liability for any organization and tend to increase annually as the salaries and tenure of employment increase. In the case of growing organizations, Gratuity benefits can work out to a substantial amount. If the employer pays the Gratuity benefit from its day to day operations it can become difficult to meet this liability on a sustainable basis. Therefore, it makes sense to have a Gratuity Fund. Call it prudent financial planning that is beneficial both to the employer as well as the employee.

For the first time in India, Birla Sun Life Insurance brings Group Gratuity Plan that is beneficial in more ways than one.

Unique Features More for less through Efficient Returns : We offer an opportunity to earn market linked returns on the

Gratuity contribution. A healthy market – linked return can help augment the asset base and can decrease your future contribution to the Gratuity Fund.

The asset allocation flexibility between various Investment Funds gives you the added advantage of efficient investment management. These multiple fund options and the facility to switch

among them give you a further opportunity to optimize your returns as per your outlook based on market trends.

Retirement Benefits : Comfort to your employeesGratuity benefits are payable on retirement, resignation, termination or the unfortunate death of an employee based on the pre-defined formula. The Gratuity benefit payable will be as per the Gratuity Ac, 1972. However the employer may also provide a higher benefit formula. Services Offered4 free switches in a yearAny times switch option available.

CIP/TNPINS are issued to the group policy holder so as to empower them to check their fund account, derive absolute rate of returns etc. The client can also place requests for change for address, switch of funds etc.

Policy Account Statement is issued at the end of every policy year.

Option to invest in single fund or multiple funds.

Income Tax Benefits

As per current legislation, the employer may contribute up to 8.33% of annual wage bill and claim it as deductible business expense under section 36 (i) v of the Income Tax Act, 1961.

Employer may claim the entire initial contribution upto 8.33% of the employee’s salary for each year of the past service. Income on investment is exempt from tax under section 10(25) (iii) of the Income Tax Act, 1961.

(4) CREDIT GUARD PLAN :

The Credit Guard Plan has a clear objective. It secures your risk by protecting your most valuable business asset – The people : The borrower. The plan provides Life Cover for a group to hedge your credit risk. It secures your risk by protecting your most valuable business asset.

The People : The borrower, The plan provides Life Cover for a group of borrowers. Thus providing zero credit risk in the event of any unforeseen tragedy in case of death of the borrower.

Credit Guard Life Cover can be more or equivalent to the amount of outstanding credit on the borrower. The cover amount for each coverage year will decrease in tandem with the outstanding loan.

Benefits :To the Leading InstitutionIn case of the unforeseen tragedy of death of the member, the Coverage Amount applicable for that particular year will be payable to the lending institution.

As a unique offering, Credit Guard offers “Life cover with simple health declaration” for a certain sum. This sum is based on group demographics. Need based medical tests are suggested, for borrowings above this sum.

You may select any term or any premium – paying mode for the plan. New members / borrowers can be admitted to the plan on every monthly processing date up on the premium payment.

Option of additional insurance cover with benefit equal to the future service provident fund. As a special privilege for a single premium pay mode, a certain percentage of the un-expired premium shall be refunded in case of pre-payment of the entire loan amount.

Joint Life Cover Benefits : As a unique feature, we provide joint life coverage if there is more than one borrower in a single loan. (E.g. “husband-wife”, “siblings” or “parent-child”)

The Coverage Amount on joint lives will be equivalent of the outstanding loan amount. For joint Life cover the premium amount normally is lesser than sum total of single cover premium for each life. Benefits for the MemberIdeal protection for the family from financial debt, in case of unforeseen tragedy. Cost effective and convenient way to obtain insurance and loan together.

Guidelines1. Group Size :

Minimum size of the group at inception will be 50. Only members who have some outstanding loan with the financial institution are eligible for membership.

2. Eligibility : The members should be between 18 to 60 years at entry. The maximum maturity age is 65. The definition of age is age as per the last birthday sector companies.

3. Coverage Amount : The minimum loan amount to be covered will be Rs.50,000/- for personal / auto / education loan or Rs.1,00,000/- for home loan and the maximum will be Rs.1,00,00,000/- The Coverage Amount payable on the happening of the insured event i.e. death depends on the Coverage year during which the death occurs. the Coverage Amount decreases from year to year and as per the schedule prepared by BSLI. The schedule provides the capital outstanding loan at the beginning of each Coverage year for different interest rates and loan terms. The coverage for any member is extended subject to acceptance of risk by BSLI after necessary underwriting. The cost of underwriting should be borne by the client.

4. Joint Life Cover : Entire Coverage Amount is payable on first death was several years after the Malhotra Committee and coverage ceases thereafter.

5. Termination of the Plan : The Credit Guard Plan can be terminated only by the policyholder. When the policy holder decides to terminate the plan, he has two options : The plan will continue for the existing members and no new members will be admitted. The plan will be discontinued for both the existing and the new members and the premiums will not be refunded.

6. Exclusion : No benefit will be paid on death due to suicide in the first year of coverage.

7. Terms :Policy holder : The lending / financial institution.Members : Borrowers.

Disclaimer : As per budget announcements : February 05 of the finance ministry, there are amendments to Section 80CCC, Section 80 L and Section 88 the amendments will come into effect when the finance bill is approved by parliament. Kindly make note of the same.

(5) SINGLE PREMIUM GROUP TERM PLAN : In the sea of companies that make up today’s business world, it can be

challenging to be different. What can mark you different is the benefit plan you offer to your customers. At Birla Sun Life Insurance, We understand the importance of value addition in various offering including products, employee benefits and commissions. One of the ways to add value is to provide life insurance to these interested groups such as customers, employees, agents and dealers.

The low cost and minimum fuss method of providing life insurance cover to such group is through term insurance with single premium payment.

BenefitsBenefits to an organization

The program benefits an organization by permitting it to offer valuable protection at a reasonable cost. By offering Birla Sun Life Single Premium Group Term Insurance Plan, an organization can provide financial security to the employees and their families.

Attract and retain high caliber employees (for employer – employee groups).

Get advantage of a tax exemption benefits on business expense on any premium payments it makes.

Benefits to Employee / Customer Get the benefit of no-cost, base level protection with supplemental

coverage. Get tax benefit in case of contributions made towards the premium.

The PlanIt is designed for organizations, which wish to provide life insurance to employees / customers at a low cost.

What are the exclusions from the cover ?

General Exclusion – If the member dies within one year from the commencement of the policy or from the date of reinstatement of the policy, the cause of death being suicide, the company will not pay the face amount mentioned above.

How does the policy work ? The organization would apply to Birla Sun Life for a group insurance policy to cover its employees / customers.

The organization has the liberty to choose the cover for each member

The premium would be paid in a single payment.

How is the underwriting done ?

Prima facie medical examination would not be insisted however, health data could be collected at the time of offer. In case of any adverse details being found in the health data, medical tests may be insisted upon.

Birla Sun Life reserves the right to refuse coverage in case of an individual not found medically fit for insurance as per its underwriting guidelines.

LIC SCHEMES

1. Group Insurance Scheme in lieu of EDLI :

Features :All employees to whom the Employee’s Provident Fund and Miscellaneous Provision Act, 1952 applies, have a Statutory liability to subscribe to Employe’s Deposit Linked Insurance Scheme, 1976to provide for the benefit of Life Insurance to all their employees.

Special Features :Under the scheme as amended with effect from 24 th June, 2000 the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months, provided that where such balance exceeds Rs.35,000 insurance cover would be equal to Rs.35,000 plus 25% of the amount in excess of Rs.35,000 subject to a maximum of Rs.60,000. Thus if the length of service is not adequate and / or the salary is low the average balance may be substantially less and such the benefit to the employee’s family is either inadequate or non – existent.

It may be noted that an employer may be exempted from consulting to this scheme, if he / she has provided for better insurance benefits through alternative scheme. LIC’s Group Insurance Scheme in lieu of EDLI has been accepted as one such better alternative.

Benefits : To The Employer :

The premium payable by the employer is usually less than the total contribution being paid by the employer to R.P.F.C. particularly when the salary level is high and average age of the group is low.

Settlement of claim is quicker; LIC requires only the death certificate and the Claim Form from the employer.

Premium paid by the employer is treated as normal business expenses for Income Tax purpose. The contribution @ 0.50% of each employee’s salary is payable by the Employer to the provident Fund Authorities.

To The Employee :

Each employee is covered for a sum assured ranging between 5,000 to 62,000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund. Alternatively every employee / worker can be covered for a uniform sum assured of Rs.62,000.

Accident Benefit : Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium @ Rs.0.75 per thousand Sum Assured per annum. Double accident cover under all group Schemes taken together should not exceed Rs.4.35 lacs.

Policy Parameters :

Minimum Membership Max. Sum Assured Graded

20 Flat – 62,000 ** (5000-62,000)

** Sum Assured depends on notional balance in P.F., calculated on the basis of the salary and Past Service.

2. Group Savings Linked Insurance Scheme :

Features :The Group Savings Linked Insurance Scheme (GSLI) offers insurance cover together with a savings element. The contribution under this scheme is deducted from the monthly salary of the member. The scheme is govt. bodies, Public Sector Corporations and reputed companies in public and private sectors who keep accurate records of their employees. Under the scheme, out of the contribution received in respect of each employee, a portion is utilized for the insurance cover and the balance, known as contribution for savings, is accumulated till exit at an attractive rate of interest, For policies where policy anniversary falls after 1.1.2000 the current rate is 10% p.a The amount apportioned from the monthly contributions towards insurance premium will be determined on the basis of the nature of the group, occupation, age composition of members etc. The savings contribution is returned with interest at the time of retirement, or exit by any other mode. In case of death during service the amount for which the member was covered at the time of death is also paid along with accumulated savings.

Special Features : This plan offers protection at low cost without individual evidence of health, attractive returns on savings to meet post retirement needs, simple procedures for granting life covers to large groups under one umbrella.

Under the scheme the premium is Rs.10 per month for Rs.10,000/- sum assured out of which minimum Rs.3.50 is for group insurance and Rs.6.50 is for savings. It may vary depending upon the occupation of the group, the death experience in the last 3 years, etc. Risk premium rates for all the employees remain same irrespective of their age or category.

Any employee irrespective of his present state of health is eligible to join the scheme without any Declaration of Good Health or Medical Examination. The only insurability condition is that the employee shoul not be absent on medical ground on the date of commencement of the scheme. All employees who have not crossed the retirement age are eligible to join the scheme. All future employees have to join the scheme compulsorily.

Survival benefits :

Plan 123/12 %of Sum Assured

At the end of 4 years 20At the end of 8 years 20At the end of 12 years 60

On Maturity, the policyholder will receive the balance sum assured as given in the above table plus the guaranteed addition and loyalty addition (if any.)Death Benefits : On death of the life assured during the term of the policy, the basic Sum assured is payable irrespective of survival benefits already paid.

In addition to the basic Sum Assured, Guaranteed and Loyalty additions if any, as per provisions herein below are also payable.

Policy Parameters :

No. of eligible employees on date of commencement of scheme

Minimum participation required

Upto 500 75% of eligible employees501-2500 70% but not less than 375

2501-10000 65% but not less than 175010000 & Above 60% but not less than 6500

For the new entrants to the Company, the membership of the Scheme is compulsory.

The insurance cover available to them is as below :

Category of employees

Maximum limit of Cover available Group Size25-99 10-499 500-1999 2000&above

Sr. Management 200000 280000 400000 450000Middle Management 140000 225000 280000 315000Clerical Staff 90000 140000 200000 225000Sub-staff & workers 45000 70000 90000 130000

For Group Size 15-24 uniform cover upto maximum Rs.30,000 will be allowed, Minimum term assurance premium will be Rs.5% per month.

Suitable for : People working in the metropolitan cities, those finding it difficult to provide adequate security for their families.

How to initiate the Scheme :In case employees of an organization and their employer agree to install the Scheme they are required to furnish data of their employees with the names, designation and date of birth. the Company should furnish to us apart from data of employee the following information. Normal Retirement Age.

Death experience in the last 3 years under the four different categories.

Willingness of the employees to pay contribution regularly to LIC through their

Employer who is ready to undertake the responsibility to deduct the amount of

contribution from the salaries of the respective employees and remit to the

Corporation regularly and maintain the records.

3. Group Superannuation Scheme :

Features :Group (Term) Insurance Scheme provides life insurance protection to groups of people. Administration of the scheme is one group basis and cost is very low. Under Group (Term) Insurance Scheme, life insurance cover is allowed to all the members of a group subject to some simple insurability conditions without insisting upon any medical evidence.

The restrictions under a Group Term Insurance Scheme mainly relate to size of the group, amount of cover allowable, minimum and maximum age limit for eligibility of cover (18 & 60), participation of minimum percentage (75%) of eligible members of the group at inception and compulsory participation of all new members.

Special Features : The members of the Group Superannuation scheme can be covered under Group Insurance in conjunction with Superannuation scheme so as to provide death risk cover while in service provide the minimum membership under the Scheme is 10.

On Retirement :On Retirement of a member, the corpus (contributions plus interest) is utilized to provide the following

Commuted Value (Equivalent to 1/3rd of the corpus), which is tax – free. The corpus that remains after providing for the commuted value is taken

as the purchased price to provide for pension.

On Death :The Pension is payable on the life of the beneficiary. Corpus is utilized towards the payment of pension of the type the beneficiary may opt and the benefit so received is tax free. A lump sum payable by way of death besides the pension, if the employer has taken Group Insurance Scheme in conjunction with the Group Superannuation Scheme.

On Withdrawal : He may opt for a pension from the normal retirement date as provided in the old employer’s scheme. He may opt for payment of commuted value and pension, immediately in which case the benefits would be taxable.

Policy Parameters :

Group Size

10-49 50-99 100 or more

Maximum Sum Assured 1,75,000 3,50,000 4,50,000

Maximum Membership 10 10 10

COMPARISON BETWEEN BSLI & LIC

UNIT-LINKED SOLUTIONS AS AN INVESTMENT BOON TO BOTH INSURER & INSURED

Sr. No.

Factors Eligibility Minimum Membership

Beneficiary Max. Limit sum

AssuredPlans

1. Group Protection Soln. (BSLI)

18 to 60 To employer & Employee

till cover

NA

1. Group Insurance scheme in lieu of EDLI (LIC)

18 to 59 To employer & Employee

till cover

Flat 62,000

2. Group gratuity plan (BSLI)

Above 18 Years

To employee after

retirement

NA

2. Group Savings linked Insurance scheme (LIC)

Above 18 Years

To employee during & after employment

140000*225000*280000*315000*

3. Group Superannuation Plan (BSLI)

Above 18 Years

To employee after

retirement

NA

3. Group Superannuation Scheme.

Above 18 Years

10-4950-99

100 & More

NA 175000350000450000

*For Middle Management employees. NA – Not Available.

CONCLUSION :

FROM THIS DATA & TABLE WE CAN SEE THAT THE PLANS HAVING UNIT-LINKED GROUP INSURANCE PLANS ARE MORE BENEFICAL THEN OLD INVESTMENT BASED ON LIC.

THIS SHOWS THAT UNIT LINKED GROUP PLANS ARE MORE BENEFICIAL TO BOTH EMPLOYER AND EMPLOYEE. THE OF EMPLOYERS THAT SHOULD SELECT ACCORDING TO EHEIR NEEDS THE POLICY / PLANS IN THEIR ORGANISATION.

PLANS OF CO. SIZE

BSLI LIC

SMALL SIZE √ --

MEDIUM SIZE √ --

LARGE SIZE -- √

FROM THE TABLE WE CAN CONCULDE THAT BSLI HAS GREATER MARKET IN AS MORE OF SMALL AND MEDIUM SIZE INDUSTRIES ARE PREVAILING IN INDIAN MARKET AND TAX CAN BE PLANNED IN A BETTER WAY OF COMPANIES AND GOOD EMPLOYES CAN BE RETAINED INTO THE ORGANISATION FOR THE BETTERMENT OF THE INDUSTRY AND ECONOMY AS A WHOLE.

BLLI’S PIONEERING LANDAMARKS 2004 : Board reconstituted with Mr. Kumar Mangalam Birla taking

2003 : The Group is ranked 20th in a study on the “Best Employers in India”, Conducted by Hewitt Associates and Business Today.

2002 : The Group receives The Economic Times “Corporate Citizen” of the year award.

2000 : The Insurance Regulatory Development Authority (IRDA) grants registration in principle to Birla Sun Life Insurance Company. Indian Rayon acquires major world rights for international apparel brands Louis Philippe, Allen Solly and Peter England.

1999 A joint venture with financial services major Sun Life of Canada is linked, as part of the overall restructuring of the Group’s financial services business.

OVERALL SUGGESTION

BSLI’S IS FOUND TO BE A ONE OF THE VERY POPULAR LEADING INDUSTRY SERVING IN INSURANCE BY JOINT VENTURE OF BIRLA GROUP OF INDUSTRIES AND SUN LIFE FINANCIALS LTD. IT HAS BEEN RANKED 2ND BY THE NOTED MAGAZINES IN BUSINESS WORLDS; FOR BSLI THERE IS SOME OF SUGGESTIONS LIKE.

THE COMPANY SHOULD TAKE ADVANTAGE OF ALL THE FAVOURABLE FACTORS, WHICH HELP IN DEVELOPING AND EXPANDING THE ACTIVITIES AND THERE BY INCREASING THE MARKET SHARE, WHICH ULTIMATELY RESULTS INTO INCREASING TURNOVER AND PROFIT.

COMPANY SHOULD MAKE MORE FLEXIBLE PLANS

COMPANY SHOULD USE NEW TECHNIQUES TO ANALYSE BETWEEN COMPETITOR &

COMPANY SHOULD FIND MORE EFFECTIVE WAYS TO GROW IN BOOMING MARKET.

OVERALL CONCLUSION

AT SUMMING UP THE OF THE REPORT, I WOULD LIKE TO HIGHLIGHT HERE THAT BIRLA SUNLIFE INSURANCE CO. LTD. HAS BRIGHT AND PROSPOROUS FUTURE. AFTER TAKING THE TRAINING IN THIS UNIT I FIND THAT FOLLOWING POINTS :

BSLI MAKES EXCELLENT EFFORTS FOR ACHIVING THE TARGET MARKET SHARE

BSLI ALWAYS INVITES SUGGESTIONS FROM ITS EMPLOYEE TO GIVE A FULL OPPORTUNITY TO DEVELOP THEIR CARRIER AND HUMAN RESOURCE OPPORTUNITY

BIRLA SUNLIFE INSURANCE CO. LTD. HAS A VERY GOOD PUBLIC RELATION AND MAINTAINS A VERY HIGH REPUTATION IN INSURANCE SECTOR 7

BSLI HAS A VERY WIDE INTERNATIONAL MARKET.

BIBLIOGRAPHY

PAMPLETS OF BSLI PRODUCTS

STAFF GUIDANCE AT BHAVNAGAR BRANCH

WEBSITE OF BIRLA SUNLIFE INSURANCE

WEBSITE OF LIC

REPORTS BY AGENCIES