birla sunlife insurance

Birla Sun Life Insurance

PROJECT REPORT ON

STUDY OF PRODUCT PORTFOLIO

OF

SUBMITTED BY:

A report submitted in partial fulfillment of BBA programme at

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ACKNOWLEDGEMENT

We would like to express our sincere gratitude and thanks to Mr.

Rajesh Rao, Agency Manager, Birla sun life insurance ltd,

Jaipur for giving us the guidance. We owe everything we have

gained from the project in terms of knowledge and experience to

them, as without their timely support and encouragement the

project would not have been as fruitful as it has been.

We also thank Mr. Ashwin saxena for his constant encouragement

and guidance at every stage of this project, acting as my faculty

guide. He has been kind enough to spare his valuable time and

share his corporate experiences, which helped me to approach the

project in the right way.

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We are grateful also to the entire staff of Birla sun life insurance

ltd who helped us to collect the relevant data and get the real gist

of current scenario.

We would also like to extend sincere thanks to few people who

were not part of our project but without their help things would not

have been as easy as they were.

THANK YOU ALL

Bhanwar lal kumawat (BBA 3ndYear)

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Parishkar college of Global Excellence.

CONTENTS

1. Introduction to insurance 5

2. Fundamental principles of insurance 6-8

3. Reasons for taking a life insurance policy 9-10

4. Vision, Mission, Values 11

5. Company Profile 12-16

6. Sales Procedure 17-19

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7. Company’s Products 19-34 7.1 Flexi Plans 7.2Classic Life Premier 7.3 Gold plus II Plan 7.4 Supreme Life Plan 7.5 Platinum plus Plan

9. Funds by BSLI 34-39

11. Conclusion 40

12. Recommendation 41

13. Bibliography 41

14. Annexure 42-44

“Insurance, in law and economics, is a form of risk

management primarily used to hedge against the risk of a

contingent loss. Insurance is defined as the equitable transfer

of the risk of a loss, from one entity to another, in exchange

for a premium. An insurer is a company selling the

insurance. The insurance rate is a factor used to determine

the amount, called the premium, to be charged for a certain

5

http://en.wikipedia.org/wiki/Risk

http://en.wikipedia.org/wiki/Hedge_(finance)

http://en.wikipedia.org/wiki/Risk_management


http://en.wikipedia.org/wiki/Economics

http://en.wikipedia.org/wiki/Law


amount of insurance coverage. Risk management, the practice

of appraising and controlling risk, has evolved as a discrete

field of study and practice.”

The evolution of human beings from the primordial ‘wild’

stage to the ‘cave dwelling’ stage is nothing but their saga of

search for security. Their quest for security is eternal. Life

insurance is a device invented by them to seek security

against the most important hazards against which they found

themselves quite helpless. It will not be an exaggeration to

say that progress of civilization is due to human beings’

unending pursuit for security.

Life insurance in its modern form is a western concept.

Although it started taking shape since last 300 years, it came

to India with the arrival of the Europeans .the first life

insurance company was established in India in 1818 as

oriental life insurance company mainly by Europeans to

provide for widows of Europeans. The companies that

followed mainly catered to Europeans and charge extra

premium on Indians lives. The first Indian company, insuring

Indian lives at standard rates, was Bombay mutual life

insurance company, which was formed in 1870.this was the

year also when the first Insurance Act was passed by the

British parliament. The years subsequent to the Swedishi

Movement saw the emerging of several insurance companies.

The end of the year 1955, there were 245 insurance

companies and provident societies out of which 16 were non-

Indian companies. These companies were nationalized in

1956 and brought under one umbrella – the life insurance

corporation of India, which enjoyed monopoly of life

insurance business, till almost up to the end of year 2000.By

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enacting the IRDA Act 2000,the government of India

effectively ended LIC’s monopoly and opened the doors for

private insurance companies

FUNDAMENTAL PRINCIPLES OF INSURANCE

Some useful terms in Insurance:

A) INDEMNITY

A contract of insurance contained in a fire, marine, burglary

or any other policy excepting life assurance and personal

accident and sickness insurance) is a contract of indemnity.

This means that the insured, in case of loss against which the

policy has been issued, shall be paid the actual amount of loss

not exceeding the amount of the policy, i.e. he shall be fully

indemnified. The object of every contract of insurance is to

place the insured in the same financial position, as nearly as

possible, after the loss, as if his loss had not taken place at all.

It would be against public policy to allow an insured to make

a profit out of his loss or damage.

B) UTMOST GOOD FAITH

Since insurance shifts risk from one party to another, it is

essential that there must be utmost good faith and mutual

confidence between the insured and the insurer. In a contract

of insurance the insured knows more about the subject matter

of the contract than the insurer. Consequently, he is duty

bound to disclose accurately all material facts and nothing

should be withheld or concealed. Any fact is material, which

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goes to the root of the contract of insurance and has a bearing

on the risk involved. It is only when the insurer knows the

whole truth that he is in a position to judge

(a) Whether he should accept the risk and

(b) What premium he should charge.

If that were so, the insured might be tempted to bring about

the event insured against in order to get money.

C) Insurable Interest - A contract of insurance affected

without insurable interest is void. It means that the insured

must have an actual pecuniary interest and not a mere

anxiety or sentimental interest in the subject matter of the

insurance. The insured must be so situated with regard to the

thing insured that he would have benefit by its existence and

loss from its destruction. The owner of a ship run a risk of

losing his ship, the charterer of the ship runs a risk of losing

his freight and the owner of the cargo incurs the risk of losing

his goods and profit. So, all these persons have something at

stake and all of them have insurable interest. It is the

existence of insurable interest in a contract of insurance,

which distinguishes it from a mere watering agreement.

D) Causa Proxima - The rule of causa proxima means that

the cause of the loss must be proximate or immediate and not

remote. If the proximate cause of the loss is a peril insured

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against, the insured can recover. When a loss has been

brought about by two or

more causes, the question arises as to which is the causa

proxima, although the result could not have happened without

the remote cause. But if the loss is brought about by any cause

attributable to the misconduct of the insured, the insurer is not

liable.

E) Risk - In a contract of insurance the insurer undertakes to

protect the insured from a specified loss and the insurer

receive a premium for running the risk of such loss. Thus, risk

must attach to a policy.

F) Mitigation of Loss - In the event of some mishap to the

insured property, the insured must take all necessary steps to

mitigate or minimize the loss, just as any prudent person

would do in those circumstances. If he does not do so, the

insurer can avoid the payment of loss attributable to his

negligence. But it must be remembered that though the

insured is bound to do his best for his insurer, he is, not bound

to do so at the risk of his life.

G) Subrogation - The doctrine of subrogation is a corollary

to the principle of indemnity and applies only to fire and

marine insurance. According to it, when an insured has

received full indemnity in respect of his loss, all rights and

remedies which he has against

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Third person will pass on to the insurer and will be exercised

for his benefit until he (the insurer) recoups the amount he has

paid under the policy. It must be clarified here that the

Insurer’s right of subrogation arises only when he has paid for

the loss for which he is liable under the policy and this right

extends only to the rights and remedies available to the

insured in respect of the thing to which the contract of

insurance relates.

H) Contribution - Where there are two or more insurance on

one risk, the principle of contribution comes into play. The

aim of contribution is to distribute the actual amount of loss

among the different insurers who are liable for the same risk

under different policies in respect of the same subject matter.

Any one insurer may pay to the insured the full amount of the

loss covered by the policy and then become entitled to

contribution from his co-insurers in proportion to the amount

which each has undertaken to pay in case of loss of the same

subject-matter.

In other words, the right of contribution arises when

1) There are different policies, which relate to the same

subject matter

2) The policies cover the same peril which caused the

loss, and

3) All the policies are in force at the time of the loss, and

4) One of the insurers has paid to the insured more than

his share of the loss.

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Life Insurance Policy is a form of security for the person who

insures his life and his family. Life insurance policies have

helped trade and other economic activities to flourish in a

great manner. It has generated lots of job opportunities. It is

looked upon as a lucrative career option. Life insurance

companies have also entered the international business

scenario.

The following reasons substantiate why a life

insurance policy should be taken :

A) Early Deaths

The mortality rate is experiencing a declining trend in many

parts of the world. However it is also important to note that

the age at which People die is also ever decreasing. Some

reasons for this include unhealthy living style, stress,

pollution, and some natural calamities. This necessitates

people to make adequate measures to yield income for their

family and dependents. This could be a serious concern if the

insured happens to be the sole breadwinner. Some individuals

see this as an option to plan their retirement.

B) Advancements in Health Care

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The mortality rate has declined rapidly even though the fact

remains that the number of people who die at an early age is

on the increase. This is mainly due to the advancement in

healthcare and the awareness on medical facilities. This

results in an increased spending at an old age. This increased

spending is also due to increase in the costs of living apart

from paying expensive medical bills. Unless they invest in

Life insurance or other forms of insurance like health

insurance it becomes next only too impossible to meet the

financial demands especially during the old days.

C) Increase in the Cost of Living and Spending

Power

The purchasing power of the consumers and the standard of

living has experienced a steep rise over the years. The

increase in National Income and gross domestic product are

Partly responsible for this. Individuals incur many unexpected

expenses due to the growing needs. Insurance comes in handy

to meet such an unexpected expense. It also

Makes sure that an individual is able to meticulously plan his

finances.

Insurance option is more or less an interest free loan. An

individual can cancel his insurance policy and obtain a huge

amount if it is imperative in meeting an urgent expenses and

he does not have alternative sources for finance. Life

insurance companies therefore do the needful to consumers.

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D) Tax Concessions

Income tax concessions are available to individuals and

corporate houses that adopt insurance policies. Many have

been making investments in Insurance with the sole aim of

enjoying tax benefits. This naturally increases spending

power. Since the investments increases the economic

activities in the country automatically increases.

VISION

To be a world class provider of financial security to individuals and corporates and to be amongst the

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top three private sectors life insurance companies in India.

MISSION

To be the first preference of our customers by providing innovative,

need based life insurance and retirement solutions to individuals as well as corporates. These solutions

will be made available by well-trained professionals through a multi

channel distribution network and Superior technology.

Our endeavor will be to provide constant value addition to customers throughout their relationship with us,

within the regulatory framework. We will provide career development opportunities to our employees and The highest possible returns to our

shareholders.

VALUES

Integrity: Honesty in every action.

Commitment: Deliver on the promise

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Passion: Energized action

Seamlessness: Boundary less in letter & spirit

Speed: One step ahead always

COMPANY PROFILE

Birla Sun Life – A Coming Together Of Values

Birla Sun Life is a joint venture between The Aditya Birla

Group, one of the largest business house in India and Sun

Life Financial Inc., a leading International Financial Services

Organization. The local knowledge of the Aditya Birla Group

combined with the expertise of Sun Life Financial Inc. offers

a formidable protection for our future.

The Aditya Birla Group is led by its chairman- Mr. Kumar

Manglam Birla. The Group has over 88000 employees across

all its units worldwide. Some of the key organizations with

the group are Hindalco, Grasim, Aditya Birla Nuvo, etc.

The group is India's leading business house with a number of

key organizations. These are as follows:

1. Grasim

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2. UltraTech Cement Ltd

3. Hindalco

4. Indian Aluminium Company Ltd

5. Aditya Birla Nuvo

6. Idea Cellular Ltd.

7. Birla Sun Life Insurance Co.Ltd

8. Birla Sun Life Asset Mgmt. Co.Ltd

9. Birla Sun Life Distribution Co. Ltd

10. PSI Data Systems

11. Indo Gulf Fertilizers Ltd.

12. Birla Global Finance Ltd

Sun Life Financial Inc. and its partners today have operations

in key markets worldwide, including Canada, the United

States, the United Kingdom, Hong Kong, the Philippines,

Japan, Indonesia, India, China and Bermuda. Sun Life

Financial Inc. is a leading player in the life insurance market

in Canada.

Share Holding Pattern:

In Birla-Sun Life, the two companies are having shareholding

pattern as follows:

74 %--> Aditya Birla Group

26 %--> Sun Life Financial Inc.

The group has 3 businesses:

1. Mutual Funds

2. Wealth Management

3. Life Insurance

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Birla Sun Life Insurance co ltd. is the Life-Insurance arm

of Birla-Sun Life

Birla Sun Life Insurance in its 7 successful years of

operations has contributed significantly to the growth and

development of 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 Bancassurance 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 covered more than a million lives since

inception and its customer base is 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 a

capital base of more than Rs.672 crores.

Many ONEs with Birla Sun Life Insurance:

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BSLI is a company that has a very unique contribution in the

history of Insurance sector. The company not only has

varying plans and funds, rather also is a pioneer in many

aspects. These pioneering features of BSLI are as follows:

1. Free Look Period: BSLI offers its policyholders with

a free look period of 15 days. Client gets freedom to

have an in-depth look over all the terms and

conditions regarding his/her life-insurance policy. If

he finds policy not worth opting for, he can also return

the policy, but at BSLI, co. people ensures this not to

happen.

2. Bancassurance: BSLI pioneered Bancassurance in

India. Bancassurance means to include Banks as one

of the distribution channels with the company. BSLI is

the first company, which realized that banks, with

their huge customer base and strong customer loyalty,

are a readymade platform to acquire new business on a

more cost effective and sustainable basis.

3. Unit Linked Life Insurance Plans: BSLI was the

first in India to introduce Unit Linked Plans. A ULIP

is an auspicious coming together of security from life

4. insurance and earnings from investment. Which

means, apart from securing the future they offer

efficient returns. These plans provide the customer

with a certain number of units, in the same way as a

mutual-fund holder gets units. ULIPs offer market-

linked returns to policyholders.

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5. Sales Illustrations: BSLI is the first company to

introduce Sales Illustrations in the Insurance Industry.

Sales people of BSLI give demonstrations of fund

6. Performance on two points of projections i.e. on 6%

and 10%. Now IRDA has also made it mandatory to

have sales illustrations.

BSLI’s has launched Century SIP, a unique systematic

investment plan offering an opportunity to create wealth with

as little as Rs 1000 per month plus a life insurance cover of up

to 100 times the monthly installment.

This plan comes along with free term insurance for an

individual up to 55 years of age.

The life insurance cover comes at no extra cost to the

investor. The cover is hassle free. The investor need not go

thru any medial test to avail of the life cover. All an investor

needs to do is enroll for CSIP & sign a “Declaration of Good

Health”. In case of unfortunate demise of investor the

insurance claim will be directly paid to the nominee by the

insurance company (Birla Sun Life Insurance Company).

Announcing the launch of Century SIP, Anil Kumar, CEO,

and Birla Sun Life MF said,

“This offering touches all aspects of an investor’s financial

planning needs. We wish to encourage the investment habit

among investors by providing them life insurance cover.”

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Insurance cover to the investor would continue even after the

SIP’s minimum maturity tenor of 3 years. Any individual

between 18 to 46 years of age may invest in this plan.

Investment in this plan may be made through Electronic

clearing system (ECS), direct debits or post dated cheques.

7. Others: Some other ONEs with BSLI are:

1st to issue daily NAVs of funds for better

transparency.

1st to have a distinct CRISIL benchmark.

1st to disclose portfolio on a monthly basis.

Policyholders can view their policy details

online; they can be accessed from BSLI

website using your unique password.

Out of every 100 claims intimated to BSLI

98.28 stands cleared.

Also the average Turn Around Time (TAT) :

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(i) From the receipt of the last

requirement till dispatch of

cheque is 5 days and

(ii) From intimation of claim till its

decision & dispatch of cheque is

36 days.

Sales Procedure of Insurance in BSLI:

BSLI ensures that its policyholders get the best out of the

policy offered to them by their Advisors. For this, BSLI

follows a set procedure of selling Insurance to the clients. The

sales procedure can be diagrammatically presented as follows:

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This procedure can be stepped down as follows:

1. Pitching the customer: The first and foremost thing is

that, client should be ready to purchase the Insurance plan.

Insurance is not a very preferable product yet in India. And,

thus, co. has to be very vigilant. Advisors, at BSLI, maintain

relationships and make the most of their Goodwill. Insurance

is a Relationship oriented business. Keeping this in mind

BSLI also initiated Bancassurance, where Banks’ image of

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SUSPECTING

PROSPECTING

APPOINTMENT

FIRST SALES CALL

FOLLOW UPS

SALES CLOSED

OFFICE WORK


being loyal to the customers, plays a major role in pitching the

customer to buy Insurance. BSLI uses following routes for

distributing their Product to general public:

a. Direct Personal Contacts (through Advisors)

b. Bancassurance (through Banks)

c. Personal Relations (through co. employees)

d. Existing Policyholders.

2. Sales Illustration: BSLI is the first company to give

demonstration of the fund performance i.e. how a certain

policy will perform or will give returns. BSLI Advisors give

sales illustration. Fund performance is shown on 6% and 10%

projections. If client find these projected returns suitable to

his/her risk profile, he go for purchasing the policy.

3. Proposal Form : Now as client is ready to get insured,

advisor gives him the proposal form and asks for all

the documents required. Proposal form is a 4 page

document that contains all the necessary information

related to the Insured and the Owner of the policy.

Documents required along with the proposal form are:

Date-Of-Birth Proof

Address & ID Proof

Income Certificate

Medical Certificates (only if Insurer is a senior

citizen)

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4. After Sales Service : Now after the Insurance is sold,

follow-ups are required. Advisor needs to maintain

good relations with the policyholder. Insurance co. can

Generate further business, only if, existing policyholders

are satisfied with the services being provided by the

advisor of the co. Thus, BSLI keeps this in mind and

Business Development Executives continuously track the

needs of the policyholders. BSLI provides the

policyholders with monthly updates of the fund

performance and

also discloses the asset portfolio of the fund. This assists

the policyholders to manage their policy according to their

risk profile. They can, thus, change their fund allocation

as well as the asset allocation in any fund, chosen by

them.

COMPANY PRODUCTS /

PLANS

All the plans associated with BSLI are Unit Linked Plans.

Flexi Plans

Flexi Plans have three variants. These variants are:

1. Flexi Save Plus (Endowment Plan)

2. Flexi Cash Flow (Money Back Plan)

3. Flexi Lifeline (Whole of Life Plan)

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Features:

This is a Unit Linked Plan with guaranteed returns.

Provides flexibility with Top-Up Facility.

For Quarterly modal premium less than Rs.5000,

payment can be made through ECS.

Policyholder can attach riders to the plan according to

his/her needs.

Liquidity in the form of Partial withdrawals.

Three Investment Fund options are available with the

policy and policyholder is free to switch between

funds anytime during the tenure of the policy.

The Sum Assured may be increased once in every 5

policy years, starting from the 6th policy year.

Premium can be paid annually, semi-annually,

quarterly and monthly

Premium Invested: Collected Premium is invested in three

Investment Fund Options. These funds are:

1. Protector

2. Builder

3. Enhancer

Benefits:

1. Maturity Benefits : At maturity, Policyholder gets the

higher of the guaranteed fund value (min. 3% on

premium) or the Total Fund value.

2. Survival Benefits :

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(i) At the end of every 5th Coverage Benefit Period

and the remainder on maturity, an amount equals

to the minimum of (a) or (b) mentioned below will

be reduced from the guaranteed fund value and

transferred to the holding account for the purpose

of partial withdrawals, where-

(a) Guaranteed Fund Value

(b) Sum Assured % as stated below:

30% if the Coverage Benefit Period is

10 years.


15 years.


20 years.


25 years.

If survival benefits are not withdrawn, they will

continue to be a part of the Fund Value.

(ii) If the life insured is a minor, policyholder

can withdraw the survival benefit payout

within one month from the scheduled

payout date from the fund value.

3. Death Benefits :

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Age at time of

DeathDeath Benefits

30 days to 1 year Fund Value Only

Age 1 Year to 60

Year

Higher of Sum Assured less all partial withdrawals made in 24

months preceeding the death of life insured or the fund value or

the guaranteed fund value.

On or After

attainment of 60

Years

Higher of Sum Assured less all partial withdrawals made since

the life insured attained the age 58 or the fund value or the

guaranteed fund value.

Charges:

1. Mortality Charges : These charges are deducted by

canceling units on a monthly basis at the prevailing

NAV. The annual mortality charges per 1000 sum

assured for sample ages are as follows:

Age 20 30 40 50 60

Male 1.016 1.171 2.150 5.532 13.732

Female 0.896 1.163 1.657 4.030 10.660

2. Partial Withdrawal Charges : 2 withdrawals in a policy

year are free of charge. Rs100 for every additional

partial withdrawal are charged.

Classic Life Premier

This is the plan that not only helps to save for the future but

also helps to get rich benefits from the investments, especially

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at a time when the need for family protection reduces

significantly.

Features:

The plan is a unit linked, non-participating plan.

This plan has the option of seven-investment fund

with the flexibility to allocate the premiums in varying

proportions into the different Fund Option.

Top up facility is there. The minimum amount of top

ups is 10000.

The plan offers further benefits in the form of

additional units, which will be added to the Fund value

at the end of the 10th policy year.

There is high liquidity in the form of Partial

Withdrawals and Surrender Benefits.

Death Benefits, which will be higher of the Fund value

or Sum Assured, reduced by the applicable partial

withdrawals.

Eligibility:

Entry Age:

Minimum: 30 days for 20 & 30 term

8 years for 10 terms

30 years for whole life

Maximum: For 10 years term- 60 years

For 20 years term- 50 years

For 30 years term- 40 years

For Whole Life- 60 years

Duration:

Minimum: 10 years

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Maximum: 70 years (assuming whole life to be

100 years)

Maturity Age: 70 years for the term- 10,20,30 years

100 years for whole life

Premium Payment Term: For 10 years term- 3, 5yrs or

regular coverage paying

period.

For 20 yrs, 30yrs term and

Whole Life- 5yrs, 10 yrs or

regular coverage paying

period.

Premium Investment: Premium collected is invested in

Seven Investment Fund Options:

1. Assure

2. Protector

3. Builder

4. Enhancer

5. Creator

6. Magnifier

7. Maximiser

Benefits:

1. Guaranteed Addition : It is in the form of additional

units, which is added to the fund value on the 10 th

policy anniversary and on every 5th policy anniversary

thereafter, while policy is in effect.

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2. Partial Withdrawal Options : Partial Withdrawals can

be made after 3 policy years or when the life insured

attains maturity, whichever is later. The minimum

partial withdrawal amount is Rs.10000

3. Surrender Benefits : Policy offers the flexibility of

surrendering the policy, if the need arises. There is no

surrender charge after 6 completed policy years.

However, if the policy is surrendered within 3 years from

inception, the surrender value is paid after the completion

of the third policy anniversary.

4. Death Benefits :

Below 5 years: If the death of the life insured

take place before 5 years, only the fund value

shall be payable to the policy owner.

Between 5 to 60 years: Higher of the fund

value or the sum assured less all applicable

partial withdrawals made in the last 24 months

preceding the death of the life insured.

60 years and Above: Higher of the fund value

or the sum assured less all applicable partial

withdrawals made since the life insured

attained the age of 58.

5. Maturity Benefits : On maturity of the policy, the fund

value is payable. Under the whole life option, on

maturity of the policy, when the life insured attains the

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age of 100, then fund value is payable and the policy

will be terminated.

6. Tax Benefits : Tax benefits on premium payment are

governed by section 80C of the Income Tax Act 1961.

Tax Exemptions on the amount received on maturity

in the unfortunate event of death and the withdrawals

are governed by section 10(10D).

7. Addition of Riders : Policy holder can customize the

plan by adding any of the following 6 riders:

1. Accidental Death & Dismemberment Rider

2. Term Rider

3. Critical Illness Rider

4. Critical Illness Plus Rider

5. Critical Illness Women Rider

6. Waiver of Premium Rider

Charges:

1. Premium Allocation Charges : These charges during

the premium paying term are as under:

Policy Year 1 2 or 3 Thereafter

Charge 13% 4% 2%

This charge on Top-up and underwriting extra is 2%.

2. Mortality Charge : This charge will be deducted by

cancellation of units on a monthly basis at the

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prevailing NAV. The Annual Mortality charge per

1000 of the Sum at risk for sample ages are as follows:

Age 25 35 45 55 65

Female 1.023 1.162 2.385 6.441 15.92

Male 1.083 1.363 3.110 8.571 21.06

3. Fund Management Charge : This is charged by

adjustment of the daily NAVs. The charge is:

1% p.a. for Assure, Protector, Builder and

Enhancer Fund.

1.25% p.a. for Creator, Magnifier and

Maximiser Fund.

4. Policy administration Charge : The charge is deducted

by canceling units on a monthly basis at the prevailing

NAV. The annual charge differs according to the Life

Insurance Coverage Sum Assured and Life Insurance

Coverage Paying Period. The maximum charge is 6.10

and the minimum charge is 0.00

5. Surrender Charge : These charges are levied as the

percentage of the annual life insurance coverage

Premium payable. Charges are as follows:

Policy Year 1 2 3 4 5 6 7+

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Surrender

Charge30% 20% 15% 10% 8% 6% NIL

6. Rider Premium Charge : If the riders are attached, this

charge will be realized by cancellation of units on a

monthly basis based on the equivalent monthly rider

coverage premium payable, when rider coverage

payment period equals the rider coverage benefit

period.

Gold Plus II Plan

The plan gives much more than a good insurance cover, an

opportunity to grow investment for the medium term. It is

worth more than Gold.

Features:

It is a Unit Linked, Non-Participating, Insurance plan.

Duration of plan is 8 years.

Premium paying term of 3 years with the flexibility to

reduce premium up to Rs. 10000 from the second

policy year.

Plan also has Top-up facility.

Liquidity in the form of Partial Withdrawals and

Surrender Benefits.

Plan has 7 fund options.

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Free unlimited fund switching and premium

redirection

Eligibility:

Entry Age: 18 to 70 years.

Minimum Premium: Rs.50000

Minimum sum Assured: 5 x Annual Premium

Premium Investment: Premium collected is allocated in

varying proportions in seven investment fund options.

Policyholder can switch between the fund options anytime

during the tenure of the policy. The seven Investment Funds

available are:

1. Assure

2. Protector

3. Builder

4. Enhancer

5. Creator

6. Magnifier

7. Maximiser

Benefits:

1. Maturity Benefits :

On maturity fund value will be paid to the

policyholder.

2. Death Benefits :

In the Unfortunate event of the Death of the Life

Insured prior to the maturity date of the policy, the

nominee gets the greater of

(a) Fund Value

34


(b) Sum Assured reduced for partial withdrawal as

follows:

Before the life insured attains the age

of 60, the sum assured payable on

death is reduced by partial

withdrawals made in the preceeding

years.

Once the Life Insured attains the age

of 60, the Sum Assured payable on

death is reduced by all partial

withdrawals made from age 58

onwards.

3. Tax Benefits :

Policyholder is eligible for tax benefits U/S 80C and

U/S 10(10D) of the Income Tax Act 1961.

U/S 80C- Premium up to Rs.100000 is allowed

as deduction from taxable income each year.

U/S 10(10D) - The Benefits received under

plan are exempted from tax.

Charges:

1. Premium Allocation Charges:

It is deducted from premium when received and before

allocation of units.

Policy Years

35


Policy

Charges 1 2 3 4+

On Policy

Premium

8% 4% 4%

On top-up

Premium

2%

2% 2% 2%

36


2. Fund Management Charges :

Fund Management charge not exceeding 1.5% per

annum of the fund value will be charged by

adjustments of the daily unit price. The charge is

1% p.a.- Assure, Protector, Builder and

Enhancer

1.25% p.a. – Creator, Magnifier and

Maximiser

3. Policy Administration Charges :

These charges are recovered by canceling units on a

monthly basis proportionately from each investment

fund. The annual Rate per 1000 of Sum Assured is:

Policy

Charges

Policy Years

1 2 3 4+

Policy

Administration

Charge *

19.4 19.4 19.4 14.4

* An additional 5 per 1000 will be charged in the first

3 policy years only on any excess Sum Assured over

Rs. 50000

37


4. Mortality Charges : These charges are deducted on a

monthly basis. These charges are taken by canceling

units proportionately from each of the investment

funds at that time. The annual rate per 1000 of Sum

Assured less fund value for sample ages are:

Age 25 35 45 55 65

Female 1.023 1.162 2.385 6.441 15.92

Male 1.083 1.363 3.110 8.571 21.06

5. Surrender Charges :

These charges are applied when the policyholder

surrender their policy in the first 3 policy years. The

surrender charge as a percentage of the annual policy

premium chosen at issue is

Policy

Charges

Policy Years

1 2 3 4+

Surrender

Charges15% 12.5% 10% nil

Supreme Life Plan

Features:

The plan is a Unit Linked Insurance Plan.

It provides the nominee with an increased sum assured

and builds savings faster.

The plan offers more protection of money at

supremely low cost.

38


Provides with Supreme Accidental TPD (Total

Permanent Disability).

Policyholder gets freedom to choose premium amount

as low as Rs.25000

The plan provides with 6 Investment Fund Options.

The plan is flexible as it provides the policyholder

with Top-Up Premium facility to ensure faster growth

in the Fund Value.

Partial Withdrawals, are allowed, after 3 years to meet

liquidity needs of the policyholder

Duration:

Policy Term : 10, 15, 20, 25, 30, 35, 40 Years.

Premium Payment Term : Policyholder can choose to

pay premium at short or regular intervals.

Premium Investment: Premium Collected is investment in

six investment fund options. These funds are:

1. Assure

2. Protector

3. Builder

4. Enhancer

5. Creator

6. Magnifier

Benefits:

1. Death Benefits :

Double Death Benefits i.e. Death Benefits= Sum

Assured + Savings

39


Increasing Death benefits i.e. Death Benefit= Sum

Assured + 25% every 5th year

2. Accidental TPD Benefit :

Policyholder immediately gets the original sum

assured up to Rs.50 lac

Co. pays the future premiums up to age 60.

3. Switches & Redirection :

Policyholder gets flexibility to switch between the

fund options. Two switches are free per annum.

Charges:

1. Mortality Charges : Charges are deducted monthly by

canceling units from the associated fund option. The

charge is 95%

2. Policy Administration Charges : These charges are

deducted monthly by canceling units from the

investment fund. The annual charge is Rs. 720 on the

first 1000 Sum Assured in all years i.e. Rs.3.60 per

1000 Sum Assured p.a. The additional charges for

years 1-5 are as follows:

Term Band 1 Band 2 Band 3

10/15 4.75 4.25 4.00

20+ 3.75 3.25 3.00

3. Premium Allocation Charges : These charges are 5%

for the 1st policy year and 2% for subsequent policy

years.

4. Fund Management Charges : These charges are 1 –

1.25% p.a. for all associated funds.

40


Platinum Plus Plan

Features:

This plan is a Unit Linked, Non-Participating,

Insurance plan.

A policy term of 10 years.

A premium paying term of 3 years.

One Innovative Investment fund, namely Platinum

Plus Fund I.

Full Liquidity after three policy years to meet any cash

needs.

Unique Guaranteed Maturity Unit Price representing

the highest unit plus price of Platinum Plus Fund I

recorded on 88 reset dates starting on March 17, 2008

and ending on June 15, 2015.

Eligibility:

Entry Age of Life Insured: 18 to 70 Years.

Minimum Annual Premium: Rs. 1,00,000

Minimum Sum Assured: 5xAnnual Premium.

Premium Collected is invested in the Equity & Debt

Market according to the preset Asset Allocation of the

Platinum Plus Fund I.

Benefits:

1. Guaranteed Maturity Unit Price

Minimum of Rs. 10 on the first Reset Date

41


At maturity, is the highest Unit Price recorded on 88

Reset Dates

2. Maturity Benefits

Number of units multiplied by higher of Guaranteed

Maturity Unit Price or prevailing Unit Price at

maturity

3. Surrender Benefits

Full liquidity after 3 policy years –100% Fund Value*

4. Death Benefits

Higher of Fund Value (as per the then

prevailing unit price) or Sum Assured (less

applicable partial withdrawals)

5. Tax Benefits

U/S 80C- Premium up to Rs.100000 is

allowed as deduction from taxable income

each year.

U/S 10(10D) - Benefits from the plan are

exempted from tax.

Charges:

1. Premium Allocation Charges : 10% of

premium in the first year and 4% of premium

in subsequent years.

2. Fund Management Charges : 1.00%-1.50% p.a.

for Assure & 1.50%-2.00% p.a. for Platinum

Plus Fund I.

42


3. Policy Administration Charges : These charges

are deducted monthly by canceling units from

the investment fund Assure first and then,

from Platinum Plus I, if required. The annual

charge is Rs. 720 on the first 1000 Sum

Assured in all years plus Rs.6 per 1000 Sum

Assured in years 1 to 3 only.

4. Mortality Charges : Charges are deducted

monthly by canceling units from the

associated investment funds. The Annual

Charges for sample ages are as follows:

Attained

Age25 35 45 55 65

Female 1.023 1.162 2.385 6.441 15.920

Male 1.083 1.363 3.110 8.571 21.060

5. Surrender Charges : This charge, as a

percentage of the annual premium at issue, is

16%, 13% and 10% for policy year 1, 2 and 3

respectively.

6. Revival Charge : The charge for policy revival

is Rs. 100-1000 per revival

43


FUNDS BY BSLI

Birla Sun Life Insurance, a leading Life Insurance company,

offers its clients with a long range of Funds. These funds are

designed to cater to a variety of needs of people who are from

different life stages. BSLI offers a broad range of 12 funds,

each having differing asset allocations.

12 funds offered are:

1. Individual Protector

2. Individual Assure

3. Individual Balancer

4. Individual Builder

5. Individual Creator

6. Individual Enhancer

7. Individual Life Maximiser

8. Individual Magnifier

9. Individual Multiplier

10. Pension Nourish

11. Pension Enrich

12. Pension Growth

A new fund named Platinum Plus Fund I is also added in

this list of funds.

Asset Allocation is decided by the Fund Managers of the

company. These fund managers continuously tracks the

movements of volatile market and combine this volatility with

44


the fund requirements of the policyholders. Accordingly he

decides allocation of assets in 5 major investment options:

Government Securities

Corporate Debt

Securitized Debt

Equity

Money Market Instruments

Proportion of allocating the fund in these options, vary

according to the needs and fund requirements of

policyholders. The most important thing to be noticed here is

that this portfolio is decided, based on the regulations of

IRDA. Performances of these funds are rated by the rating

agency-CRISIL.

All the 12 funds by BSLI are described below along with their

respective Asset Allocations.

Individual Assure

Objective: The primary objective of this fund is to provide

Capital Protection, at a high level of safety and liquidity

through judicious investments in high quality short-term debt.

Strategy: Generate better return with low level of risk

through investment into fixed interest securities having short-

term maturity profile.

Asset Allocation:

45


SECURITIES HOLDING

Corporate Debt 59.57%

Money Market Instruments 17.97%

TOTAL 100.00%

Individual Balancer

Objective: The objective of this fund is to achieve value

creation of the policyholder at an average risk level over

medium to long-term period.

Strategy: The strategy is to invest predominantly in debt

securities with an additional exposure to equity, maintaining

medium term duration profile of the portfolio.

46


Asset Allocation:

SECURITIES HOLDINGS

Government Securities 10.67%


Equity 23.44%


TOTAL 100.00%

HOLDINGS

10.67%

39.04%

23.44%

26.85%Government Securities

Corporate Debt

Equity


Pension Growth

Objective: This fund option is designed to build the capital

and to generate better returns at moderate level of risk, over a

medium or long-term period through a balance of investment

in equity and debt.

47


Strategy: Generate better return with moderate level of risk

through active management of fixed income portfolio and

focus on creating long term equity portfolio which will

enhance yield of composite portfolio with low level of risk

appetite.

Asset Allocation:

SECURITIES HOLDINGS



Equity 18.63%


TOTAL 100.00%

HOLDINGS

13.90%

45.41%18.63%

22.06%


Corporate Debt

Equity


Pension Enrich

48


Objective: Helps to grow the capital through enhanced

returns over a medium to long-term period through

investments in equity and debt instruments, thereby providing

a good balance between risk and return.

Strategy: To earn capital appreciation by maintaining

diversified equity portfolio and seek to earn regular return on

fixed income portfolio by active management resulting in

wealth creation for policyholders.

Asset Allocation:

SECURITIES HOLDINGS



Equity 32.69%


TOTAL 100.00%

49


HOLDINGS

14.35%

39.40%32.69%

13.57%


Corporate Debt

Equity


50

CONCLUSION

Our training was a very enriching experience for us, we have learnt

so many things, and we got insight into the insurance world.

Insurance sector today playing a major role in everyone’s life lot

more than ever before life currently there is a comprehensive range

of products covering each type of policy available in the market. We

have studied various insurance plans covered under BSLI, and their

features. BSLI also gives various Riders, which provides extra

benefits to the customers. And we came to know about the

pioneering features of BSLI, like sales procedure, SIP, etc.

While most insurance plans block money for certain period of time, a

BSLI plan gives the double benefit of life insurance along with easy

liquidity through lump sum cash.

Birla Sun Life Insurance (BSLI), one of the largest private life

insurers, is gearing itself to take advantage of the vast rural

opportunity that has opened up as a result of the revised definition of

rural areas by the IRDA. Over the last four years, BSLI has

painstakingly built its rural infrastructure to create a cost-effective

distribution network across the country.

Our training gave us corporate exposure, and helped in improving

our communication skills. We learnt to deal with customers, we

made them aware about various plans, and their respective features,

even helped them to select the best plan as per their requirements.

RECOMMENDATIONS

1. Competition from public sector and foreign banks remains a key challenge

for private sector banks. They need to reorient their staff and effectively

utilize technology platforms to retain customers.

2. They have to update their portfolio timely.

3. Birla Sun Life Insurance Ltd should have proper division of departments

under heads.

4. Birla Sun Life Insurance Ltd should have more pension plans.

5. Birla Sun Life Insurance Ltd should have more children plans, and more

help line plans

6. They should provide more information to the customer so that they

become more aware about insurance

BIBLIOGRAPHY

1. www.birlasunlife.com Dated 13/6/08 Time 3:30

2. www.Paisawaisa.com/LifeInsurance Dated 13/6/08 Time 4:00

http://www.Paisawaisa.com/LifeInsurance%20Dated%2013/6/08%20Time%204:00

3. Company brochure

4. Company brochure/ GOLD- PLUSII PLAN/ Ver 01/12/07

5. Company brochure/ Classic Life Premier/ Ver 8/9/07

ANNEXURE

1. Do you make investments?

A.Yes

B.No

2. How much you earn annually?

A. Below 50,000

B. 50,000-100,000

C.100, 000-1, 50,000

D. Above 150000

3. Do you know about insurance?

A. Yes

B. No

4. Do you know about BSLI?

A. Yes

B.No

5. How did you came to know about it?

A Newspapers

B. Online

C. Personal Reference

D. Other

6. What assets do you own?

A. Personal house

B.Car

C.Credit card

7. Where would you like to invest?

A. Mutual Fund

B.Stocks

C.Real estate

D.Insurance

8. What would u like to insure?

A. Vehicle

B.Life insurance

9. Which insurance plan of BSLI are you

interested in?

A.Saral Jeevan

B.Gold Plus II

C.Platinum Plus

D.Classic Life Premier

10. How do you rate our plans?

A. Average

B. Good

C. Excellent