hdfc standard life insurance
TRANSCRIPT
1
INTRODUCTION TO LIFE INSURANCE
In insurance the insured makes payment called “Premium” to an Insurer and in return
Is able to claim a payment from the insurer if the insured suffers a defined type of
loss . This relationship is usually drawn up in a formal legal contract also known as a
policy. The contract will set out in detail the exact circumstances under which a
benefit payment will be maid and the amount of the premium.
In the case of annuities such as pension similar concept apply but in some sense in
the reverse when applied to annuities the terms risk and loss are some what different
from traditional insurance as they concern the chances of living beyond life
expectancy and the need for income during the period between annuitilization and
death.
Insurance attempts to quantify risk by pooling together a large number of risks . this
makes use of the law of large numbers. As applied to insurance this mean that the
greater the number of similar risks the greater accuracy with which insurers can
estimate to over all risk .
Insurance companies also earn investment profits because they have the use of the
premium money because they have the use of the premium money from the time
they receive it until the time they need it to pay claims. This money is called the
FLOAT.
2
When the investments of floats are successful they may earn large profit even if the
insurance company pay out in claims every penny received pay out more money than
they invest the money at a greater return than their cost of float.
Insurance can also be thoughts of as a wager or bet that executes over the policy
period . The insurance company bets that you or your property will not suffer a loss
while you put money on the opposite out come .
The difference in the fees paid to the insurance company v/s the amount they can be
held liable for if an accident happens is roughly analogous to the odds one might
expect when belling on a race horse i.e. 10:1 for this reason a number of religious
group including the Amish avoid insurance and instead depends support provided by
their communities when disasters strike . In closing supportive communities where others
will actually step in to rebuild lost property this arrangement can work most societies
could not effectively support this type of system .
3
NEED OF INSURANCE
Why do a person need Life Insurnce?
Life insurance is designed to protect you and your family against financial
uncertainties that may result due to unfortunate demise or illness. You can also view
it as a comprehensive financial instrument as a part of your financial planning
offering you savings & investment facilities along with cover against financial loss. By
choosing the right policy as per your needs i.e. customized
solutions, you will be able to plan for a secure future for yourself and your loved
ones.
Choosing the right plan
Identifying the right plan basis your needs is the first crucial step towards insurance
planning.
At HDFCSLIC we help you through this decision by identifying your various needs
and offering plans that are customized for you. You may also choose a plan for
yourself by identifying the life stage you are at .
4
Analyzing Needs
What is your need?
Protection
Need for a sound income protection in case of your unfortunate demise
Investment
Need to ensure long-term real growth of your money
Saving
Save for the milestones and protect your savings too
Pension
Need to save for a comfortable life post retirement
5
LIFE STAGES
Our insurance need will change as our life does, from starting to work to enjoying
our golden years and all the stages in between. Each one of these stages may pose a
different insurance need / cover for us. In this section, hdfcslic have drawn up the
basic life stages and help customer to analyse various insurance needs accordingly
6
STAGE 1
Young and Single
An important stage where one lays down the foundation of a successful life ahead. Take
advantage of the time and power of compounding to ensure that we
build up our dreams. Start saving early.
Our needs
Save for a home and wedding
Tax Planning
Save for Golden years
STAGE 2
Just Married
Marriage brings about a significant change. New dreams and new
opportunities also bring in additional responsibilities. While both of us
look forward to a happy and secure life , it is equally important to
ensure that eventualities don’t come in the way of shaping our
dreams.
Our needs
Planning for home / securing our home loan liability
Save for vacation
Save for our first child
7
STAGE 3
Proud Parents
Once we have children, our need for life insurance is even more. we
need to protect our family from an untoward incident. Ensureour
protection umbrella takes into account the future cost of securing our
child’s dream. we will want life to go on for our loved ones, and
having enough life insurance is a way to help ensure that.
Our needs
Provide for children’s education
Safeguarding family against loan liabilities
Savings for post-retirement
STAGE 4
Planning for Retirement
While we are busy climbing the ladder of success today, it is
important for us to take time and plan for our life after retirement.
Having an early start for retirement planning can make a significant
difference to our savings. Think about our golden years even before
we have reached them.. The key is to think ahead and plan well using our time and
money.Our needs
Provide for regular income post retirement
Immediate Tax benefits
Lead a secure, independent and comfortable life style in our retirement years
8
TYPE OF INSURANCE
Any risk that can be quantified probably has a type of insurance to protect it .
These different
TYPE OF INSURANCE ARE-:
AUTO MOBILE INSURANCE also known as auto insurance and in the UK as
motor insurance is probably the most common form of insurance and may cover both
legal liability claims against the driver and loss of or damage to the vehicle itself.
PROPERTY INSURANCE provides protection against risks to property such as fire
theft or weather damage. This includes specialized forms of insurance such as fire
insurance, flood insurance, earthquake insurance, home insurance.
CASUALTY INSURANCE insures against accident not necessarily tied to any
specific piece of property.
LIABILITY INSURANCE covers legal claims against the insured .
For example A doctor may purchase insurance to cover any legal claim against him if
he were to be convicted of a mistake in treating a patient.
FINANCIAL LOSS INSURANCE protects individual and companies against various
financial risks.
For example a business might purchase cover to protect it from loss of sales if a fire
in a factory prevented it from carrying out its business for a creditor to pay money
it owes to the insured Fidelity Bonds and Surety Bonds are included in this category.
9
TITLE INSURANCE provides a guarantee on research done on public records
affecting title to real property , usually in conjunction with a search done at the time
of a real estate transaction, such as a sale, or a mortgage. LIFE INSURANCE
provides a benefit to a decedent’s family or other designated beneficiary to replace
loss of the insured’s income and provide for burial and other final expenses.
HEALTH INSURANCE covers medical bills incurred because of sickness or
accident .
ANNUTIES provide a stream of payment and are generally classified and insurance
because they are issued by insurance companies and regulated as insurance. Annuities
and pensions that pay a benefit for life are some times regarded as insurance against
the possibility that a retiree will out line is or her financial resource . In that sense
they are the opposite of life insurance.
CREDIT INSURANCE pays some are all of a loan back when certain things happen
to the borrower like unemployment disabilities or death.
POLITICAL RISK INSURANCE can be taken out by businesses with operations in
countries in which there is a risk that revolution or other political conditions will
result in a loss.
WORKING COMENSATION INSURANCE replaces all of part of a worker’s wages
and accompanying medical expences lost due to job related injury.
A single policy may cover risk in one or more of the above categories.
10
For example car insurance would typically cover both property risk ( covering the
risk of theft or damage to the car) and liability risk ( covering legal claims from say
causing an accident). A home owner’s insurance policy in the US typically includes
property insurance covering damage to the home and the owner’s belongings liability
insurance covering certain legal claims against the owner and even a small amount of
health insurance for medical expenses of guest who are injured on the owner’s
property. Potential source of risk that may give rise to claims are known as perils .
Examples of perils might be fire, theft, earth quake, and many other potential risks.
An insurance policy will set out in detail which perils are covered by the policy and
which are not.
11
TYPES OF INSURANCE COMPANIES
Insurance companies may be classified as-:
LIFE INSURANCE COMPANIES who sell life insurance annuities and pension
products.
NON LIFE OR GENERAL INSURANCE COMPANIES who sell other type of
insurance except life . In most countries life and non life insurance are subject
different regulations tax and accounting rules. The main reason for the distinction
between the two type of company is that life business is very long term in nature
coverage for life assurance or a pension can cover usually cover’s short periods such
as one year.
Companies may sell both life and non life insurance in which case they are
sometimes known as composite insurance companies.
Reinsurance companies sell insurance covered to other insurance companies. This help
insurance companies to spread their risk and protects them from very large losses. A
few very large companies with huge reserves dominate the reinsurance market.
There are also companies which are known as insurance broker like a mortgage
broker the customer to shop around for the best insurance policy amongst many
companies pays these companies.
12
Life insurance and saving
As well as paying out a sum of money on death, many life insurance contracts also
pay out a sum of money after a given time ( in which case it is known as an
endowment policy ), and may also pay out a cash value if the policy is cancelled
early. In many countries, such as the US and the UK, India tax law provides that
the interest on this cash value is not taxable under certain strict circumstances.
This leads to widespread use of life insurance as a tax-efficient method of saving as
well as protection in the event of early death. Wealthy individuals buy life insurance
policies as a means for avoiding income taxes and estate taxes.
If the tax benefit exceeds the fees charged by the insurance company for maintain
the policy, then the policy serves as a life insurance tax shelter. There is much
controversy surrounding this practice, and the financial industry is deeply divided
about whether or not these practices work as advertised
13
Criticisms of the insurance industry
Insurance insulates too much
By creating a ‘security blanket’ s for its insured. An insurance company may
inadvertently find that its insures may not be as risk-averse as they should be ( since
they assume they fail back up on their insurance policy) . To reduce their own
financial exposure , insurance companies have contractual clauses that remove their
obligation to provide coverage if the insured engages in some kind of behavior that
grossly magnifies their risk of loss or 1iaility.
For example. Liability insurance providers do not provide coverage for liability
arising fromintentional torts committed by the insured. Even if a provider was
irrational enough to try to provide such coverage, it is against the public policy of
most countries to allow such insurance to exist, and thus it is usually illegal.
14
Lack of knowledge of policy holder
Insurance policies can be complex and some policy holders may not understand all
the fees included in a policy. As a result, people could buy policies at unfavorable
terms. In response to these issues, governments often make detailed regulations that
set down minimum standards for policies and govern how they may be advertised and
sold.
Health insurance
Health insurance is one of the most controversial forms of insurance because of the
conflict between the need for the insurance company to remain solvent versus the
need of its customers to remain healthy, which many view as a basic human right .
This conflict exists in a liberal health care system because of the unpredictability of
how patients respond to medical treatment.
Suppose a large number of customers of a particular insurance company were to
contract a rare disease costing 100 million dollars to fight for each patient. The
insurance company would be faced with the choice of either charging all its future
customers astronomical premiums ( thus losing customers and going out of business ),
paying all claims without complaint ( thus going out of business ) or fighting the
customers in an attempt to deny the costly treatment ( thus outraging patients and
their families, and becoming a target for lawsuits and legislation ) . Many countries
have made the choice to avoid this important conflict by nationalizing the health
industry so that doctors, nurses . and other medical workers become state employees,
all or partly funded by taxes; or setting up a national health insurance plan that all
15
citizens pay into with tax payments, and which pays private doctors for health care.
These national health care systems also have their problems. Many countries have
citizen groups which protest bureaucracy and costcutting measures that sometimes
unduly delay medical treatment.
Insurance – Life
Your family counts on you every day for financial support: food, shelter .
transportation, education, and much More . Insurance provides you with that unique
sense of security that no other form of investment provides. It gives you a sense of
financial support especially during that time of crisis irrespective of the fluctuations in
the stock market . Insurance provides for your career goals right from your childhood
years.
Life insurance is all about making sure your family has adequate financial resources
to make those plans and dreams come true. It provides financial protection to help
your family or business to manage after your death.
Few of the Life insurance policies are:
Whole life policies : Cover the insured for life. The insured does not receive money
while he is alive: the nominee receives the sum assured plus bonus upon death of the
insured.
Endowment policies : Cover the insured for a specific period. The insured receives
money on survival of the term and is not covered thereafter.
Money back policies :- The nominee receives money immediately on death of the
insured. On survival the insured receives money at regular intervals during the term.
These policies cost more than endowment with profit policies.
16
Annuities / Children’s policies :- The nominee receives a guaranteed amount of
money at a pre-determined time and not immediately on death of the insured. On
survival the insured receives money at the same predetermined time. These policies
are best suited for planning children’s future education and marriage costs.
Pension schemes : are policies that provide benefits to the insured only upon
retirement. If the insured dies during the term of the policy, his nominee would
receive the benefits either as a lump sum or as a pension every month.
Since a single policy cannot meet all the insurance objectives, one should have a
portfolio of policies covering all the needs.
Indian insurance Sector
The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and General Insurance Business ( Nationalization ) Act, 1972,
Insurance Regulatory and Development Authority (IRDA) Act. 1999 and other related
acts .
Jpment Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999,
Insurance Regulatory and Development Authority (IRDA) was established on 19th
April 2000 to protect the interests of holder of insurance policy and to regulate ,
promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved
the way for the entry of private players into the insurance market which was hither to
the exclusive privilege of public sector insurance companies! corporations. Under the
new dispensation Indian insurance companies in private sector were permitted to
operate in India with the following conditions:
. Company is formed and registered under the Companies Act , 1956;
. T he aggregate holdings of equity shares by a foreign company, either by
itself or through its subsidiary companies or its nominees, do not exceed
17
26%, paid up equity capital of such Indian insurance company;
The company’s sole purpose is to carry on life insurance business or general
insurance business or reinsurance business.
The minimum paid up equity capital for life or general insurance business is
Rs. 100 crores.
The minimum paid up equity capital for carrying on reinsurance business has
been prescribed as Rs. 200 crores.
The Authority has notified 27 Regulations on various issues which include
Registration of Insurers , Regulation on insurance agents, Solvency Margin, Re-
insurance , Obligation of insurers to Rural and Social sector, investment and
Accounting Procedure, Protection of policy holders’ interest etc.
Applications were invited by the Authority with effect from 15th August, 2000
for issue of the Certificate of Registration to both life and non-life insurers.
The Authority has it s Head Quarter at Hyderabad.
18
Insurance companies
IRDA has so far granted registration to 12 private life insurance companies and 9
general insurance companies. If the existing public sector insurance companies are
included, there are currently 13 insurance companies in the life side and 13 companies
operating in general insurance business. General Insurance Corporation has been
approved as the “Indian reinsurer for underwriting only reinsurance business .
Particulars of the life insurance companies and general insurance companies &
including their web address is given below :
LIFE INSURERS Public Sector WEBSITE
Life Insurance Corporation Of India www.licindia.com
Private Players
Bajaj Allianz Life insurance co.Ltd www.allianzbajaj.co.in
HDFC Standard Life Insurance Co.Ltd www.hdfcinsurance.com
Birla Sun Life Insurance Company www.birlasunlife.com
ICICI Prudential Life Insurance Co.Ltd www.iciciprulife.com
19
ING Vysya Life Insurance company Limited www.ingvysayalife.com
Max New York Life Insurance co.Ltd www.maxnewyorklife.com
Met Life Insurance Co.Ltd www.metlife.com
Om Kotak Mahindra Life insurance Co.Ltd www.omkotakmahindra.com
SBI Life Insurance Co.Ltd www.sbilife.com
Tata AIG Life Insurance Co.Ltd www.tata-aig.com
AMP Sanmar Assurance Co.Ltd www.ampsanmar.com
Dabur CGU Life insurance Co.Pvt.Ltd www.avivaindia.com
20
CONCEPT OF INSURANCE
Insurance is aimed at compensating the financial loss suffered on the happening of an
insured event. Insurance cannot prevent the happening of the event, however it can
protect a person from the financial losses he may suffer after the happening of the
event.
The above can be understood with the help of a simple example.
Example 1:
In case a person has a car worth Rs 5,00,000 and he insures the car for Rs 5,00,000.
In the event of a loss of Rs 1,00,000 during the term of the insurance, he would be
compensated the amount lost of Rs 1,00,000.
Although the insurance is for Rs 5,00,000 the person cannot be paid more than Rs
1,00,000 as this is the loss he has suffered. In case the insurance company pays more
than the financial loss suffered by the policyholder then there is an incentive to the
policyholder to make claims and make profits. This will increase in the premium
amount and in case all the policy holders claims losses then the insurance would be
un-viable. Thus to protect the interests of all the group of policy holders the insurance
offered is only to the extent of the financial loss suffered by the policyholder.
Insurance is therefore only a compensation of a financial loss.
21
ADVANTAGES OF LIFE INSURANCE
Secured Targeted Saving — a Uniqueness
Life insurance is not a merely a investment or a saving device—much more than that
.In any other investment or saving avenue, like bank deposits, savings certificates or
mutual funds or shares and stoks etc. amount of funds available at any time will not
be more than the amount saved appreciation or interest earned till then . In life
insurance , the amount available is the one that one wished to have at end of the
savings period which may range upon 30 or even more years . Life insurance has
advantage over the other forms of saving Facility of nomination had assignment
makes the claims settlement easy on death.Life insurance involves compulsory
savings. Tax benefits – on premium paid as well as the amount receiving by way of
claim (specified policies) protected against court attachments loans can be raised
against a life Insurance policy .
22
23
Introduction
HDFC Standard Life, one of India’s leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India’s leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.
HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.
HDFC Standard Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 32 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers.
HDFC Standard Life continues to have one of the widest reaches among new insurance companies with 568 branches servicing customer needs in over 700 cities and towns. The company has a strong presence in its existing markets with a base of 2,00,000 Financial Consultants.
Our Parentage
HDFC Limited
HDFC Limited, India's premier housing finance institution has assisted more than 3.4 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 271 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a home back in India. As of December 2009, the total asset size has crossed more than Rs. 104,560 crores including the mortgage loan assets of more than Rs.90,400 crores. The corporation has a deposit base of over Rs. 23,000 crores, earning the trust of nearly one million depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies .
Standard Life
Standard Life is one of the UK's leading long term savings and investments companies headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides life assurance and pensions, investment management and healthcare insurance products to over 6 million customers worldwide. The Group has around 10,000 employees across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. At the end of December 2010 the Group had total assets under administration of £170.1bn. Standard Life's diverse business includes one of the largest life and pensions businesses in the UK with more than 4 million customers; Standard Life Investments, which currently manages assets of over £138.7bn globally and Standard Life Healthcare, a private medical insurance company which is one of the largest
24
in the UK. On 10 July 2006, after 80 years as a mutual company, Standard Life Assurance Company demutualised and Standard Life plc was listed on the London Stock Exchange. Standard Life now has approximately 1.5 million individual shareholders in over 50 countries around the world .
HDFC Standard Life believes that establishing a strong and ethical foundation is an essential prerequisite for long-term sustainable growth. To ensure this, we have concentrated our focus on expansion of branch network, organising an efficient and well trained sales force, and setting up appropriate systems and processes with optimum use of technology. As all these areas form the basic infrastructure for establishing the highest possible customer service standards.
Our core values are drilled down to all levels of employees, as these are inviolable. We continue to promote high integrity in business practices and shun short cuts and unethical practices, as we wish to be perceived as an institution with high moral standing. Since our inception in 2000, when the Indian insurance space was opened for private participation, we have consistently focused on setting benchmarks in all aspect on insurance business. Being the first private player to be registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators are:
HDFC Standard Life is a strong, financially secure business supported by two strong and secure promoters – HDFC Ltd and Standard Life. HDFC Ltd’s excellent brand strength emerges from its unrelenting focus on corporate governance, high standards of ethics and clarity of vision. Standard Life is a strong, financially secure business and a market leader in the UK Life & Pensions sector.
Our brand has managed to set a new standard in the Indian life insurance communication space. We were the first private life insurer to break the ice using the idea of self-respect instead of ‘death’ to convey our brand proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that customers recognize, like and prefer to do business. Moreover, our brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.
We follow a conservative investment management philosophy to ensure that our customer’s money is looked after well. The investment policies and actions are regularly monitored by a formal Investment Committee comprising non-executive directors and the Principal Officer & Executive Director.
As a life insurance company, we understand that customers have invested their savings with us for the long term, with specific objectives in mind. Thus, our investment focus is based on the primary objective of protecting and generating good, consistent, and stable investment returns to match the investor’s long-term objective and return expectations, irrespective of the market condition
Despite the criticality of life insurance, sales in the industry have been characterized by over reliance on tax benefits and limited advice-based selling. Our eight-step structured sales process ‘Disha’ however, helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in the industry, looks at the whole financial picture. Customers see a plan not piecemeal product selling.
HDFC Standard Life has fully implemented a risk control framework to ensure that all types of risks (not just financial) are identified and measured. These are regularly reported to the board and this ensures that the company management and board members are fully aware of any risks and the actions taken to ensure they are mitigated
Training is an integral part of our business strategy. Almost all employees have undergone training to enhance their technical skills or the softer behavioural skills to be able to deliver the service standards that our company has set for itself. Besides the mandatory training that Financial Consultants have to undergo prior to being licensed, we have developed and implemented various training modules covering various aspects including product knowledge, selling skills, objection handling skills and so on.
HDFC Standard Life do not focus in the business of ramping up the topline only, but to create maximisation of stakeholder's value. Today, we are extremely satisfied with the base that we have created for the long-term success of this company.
We are one of the few companies whose product details, pricing, clauses are clearly communicated to help customers take the right decision.
25
We have initiated and implemented many new processes, some of which were found useful by the IRDA and later made mandatory for the entire industry.The agents who successfully completed this training only, were authorized by the company to sell ULIPs. This has now been made compulsory by IRDA for all insurance companies under the new Unit Linked Guidelines.
HDFC Standard Life’s wide and diversified product portfolio help individuals meet their various needs, be it:
Protection: Need for a sound income protection in case of your unfortunate demise
Investment: Need to ensure long-term real growth of your money
Savings: Save for the milestones and protect your savings too
Pension: Need to save for a comfortable life post retirement
Health: Cover for health related exigencies
Why HDFC Standard Life?
Introduction
HDFC Standard Life believes that establishing a strong and ethical foundation is an essential prerequisite for long-term sustainable growth. To ensure this, we have concentrated our focus on expansion of branch network, organising an efficient and well trained sales force, and setting up appropriate systems and processes with optimum use of technology. As all these areas form the basic infrastructure for establishing the highest possible customer service standards.
Our core values are drilled down to all levels of employees, as these are inviolable. We continue to promote high integrity in business practices and shun short cuts and unethical practices, as we wish to be perceived as an institution with high moral standing. Since our inception in 2000, when the Indian insurance space was opened for private participation, we have consistently focused on setting benchmarks in all aspect on insurance business. Being the first private player to be registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators are:
Strong Promoter
HDFC Standard Life is a strong, financially secure business supported by two strong and secure promoters – HDFC Ltd and Standard Life. HDFC Ltd’s excellent brand strength emerges from its unrelenting focus on corporate governance, high standards of ethics and clarity of vision. Standard Life is a strong, financially secure business and a market leader in the UK Life & Pensions sector.
Preferred and Trusted Brand
26
Our brand has managed to set a new standard in the Indian life insurance communication space. We were the first private life insurer to break the ice using the idea of self-respect instead of ‘death’ to convey our brand proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that customers recognize, like and prefer to do business. Moreover, our brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.
Investment Philosophy
We follow a conservative investment management philosophy to ensure that our customer’s money is looked after well. The investment policies and actions are regularly monitored by a formal Investment Committee comprising non-executive directors and the Principal Officer & Executive Director.
As a life insurance company, we understand that customers have invested their savings with us for the long term, with specific objectives in mind. Thus, our investment focus is based on the primary objective of protecting and generating good, consistent, and stable investment returns to match the investor’s long-term objective and return expectations, irrespective of the market condition.
Need-Based Selling Approach
Despite the criticality of life insurance, sales in the industry have been characterized by over reliance on tax benefits and limited advice-based selling. Our eight-step structured sales process ‘Disha’ however, helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in the industry, looks at the whole financial picture. Customers see a plan not piecemeal product selling.
Risk Control Framework
HDFC Standard Life has fully implemented a risk control framework to ensure that all types of risks (not just financial) are identified and measured. These are regularly reported to the board and this ensures that the company management and board members are fully aware of any risks and the actions taken to ensure they are mitigated
Focus on Training
Training is an integral part of our business strategy. Almost all employees have undergone training to enhance their technical skills or the softer behavioural skills to be able to deliver the service standards that our company has set for itself. Besides the mandatory training that Financial Consultants have to undergo prior to being licensed, we have developed and implemented various training modules covering various aspects including product knowledge, selling skills, objection handling skills and so on.
Focus on Long-Term Value
HDFC Standard Life do not focus in the business of ramping up the topline only, but to create maximisation of stakeholder's value. Today, we are extremely satisfied with the base that we have created for the long-term success of this company.
27
Transparent Dealing
We are one of the few companies whose product details, pricing, clauses are clearly communicated to
help customers take the right decision.
Compliance Strict with Regulations
We have initiated and implemented many new processes, some of which were found useful by the IRDA and later made mandatory for the entire industry.The agents who successfully completed this training only, were authorized by the company to sell ULIPs. This has now been made compulsory by IRDA for all insurance companies under the new Unit Linked Guidelines.
Diversified Product Portfolio
HDFC Standard Life’s wide and diversified product portfolio help individuals meet their various needs, be it:
Protection: Need for a sound income protection in case of your unfortunate demise
Investment: Need to ensure long-term real growth of your money
Savings: Save for the milestones and protect your savings too
Pension: Need to save for a comfortable life post retirement
Health: Cover for health related exigencies
28
Board Members Brief profile of the Board of Directors
Brief Profile of The Board of Directors
Mr. Deepak S. Parekh is the Chairman of the Company. He is also the Chairman and Director of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Chairman in 1993. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales).
Mr. Keki M. Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Vice Chairman and Chief Executive Officer of HDFC Limited. He joined HDFC Limited in 1981 and became an Executive Director in 1993. He was appointed as its Managing Director in 2000. Mr. Mistry is a Fellow of the Institute of Chartered Accountants of India and a member of the Michigan Association of Certified Public Accountants.
Ms. Renu S. Karnad is the Managing Director of HDFC Limited. She is a graduate in Law and holds a Master's degree in Economics from Delhi University. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000 and Deputy Managing Director in 2007. She is responsible for overseeing all aspects of lending operations of HDFC Limited.
29
Mr. David Nish joined Standard Life on 1 November 2006 as Group Finance Director and remained in that position until December 2009. He is appointed as the Executive Europe on 1st January 2010. He was awarded the Scottish Business Awards Finance Director of the Year and from 2004 to 2005. He is a member of the Institute of Chartered Accountants of Scotland. He joined the Board of Directors in February 2010.
Mr. Nathan Parnaby is appointed as the Chief Executive, Europe & Asia of Standard Life in the year 2010. Nathan joined Standard Life in 1982 as Investment Manager, responsible for all UK net funds. He was appointed a Director of the Standard Life Investments’ board. He is a Mathematics graduate from Oxford University and the Member of the Securities Institute. He joined the Board of Directors in December 2009.
Mr. Norman K. Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co. holding the positions of UK Economist, Chief Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director International Equities. He was also responsible for Economic and Investment Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005.
30
Mr. Gautam R. Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International, an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investments to and from India.
Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002 was a Partner & Vice-President at Bain & Company, Inc., Boston, where he led the worldwide Utility Practice. He was also Director, Corporate Business Development at General Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences.
Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. Mr. Ravi Narain was a member of the core team to set-up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI).
Mr. A. K.T. Chari has joined HDFC Standard Life as a Director on March 10, 2010. Mr. Chari has completed his Electrical Engineering from Madras University in 1962. He is associated with Infrastructure Development Finance Company Ltd. (IDFC) for last 11 years. Currently he is handling project finance for infrastructure projects at IDFC. Prior to this he was associated with Infrastructure Development Bank of India (IDBI) from 1975 to 1999.
31
Mr. Gerald E. Grimstone was appointed Chairman of Standard Life in May 2007, having been Deputy Chairman since March 2006. He became a director of the Standard Life Assurance Company in July 2003. He is also Chairman of Candover Investments plc and was appointed as one of the UK’s Business Ambassadors by the Prime Minister in January 2009. Gerry held senior positions within the Department of Health and Social Security and HM Treasury until 1986. He then spent 13 years with Schroders in London, Hong Kong and New York, and was Vice Chairman of Schroders’ worldwide investment banking activities from 1998 to 1999. He is the Alternate Director to Mr. David Nish.
Mr. Michael G Connarty is responsible for Standard Life's investments in life assurance Joint Ventures in India and China. He holds a degree in Law and MBA. He has worked with Standard Life for 33 years in managerial positions covering a number of fields such as Pensions law, International Marketing, Operational Management, Strategy, Risk, Compliance, Company Secretarial and Banking. He has acted as Project Manager for the start-up project of the Company in 2000. He is the Alternate Director to Mr. Norman K. Skeoch.
Mr. Amitabh Chaudhry is the MD and CEO of HDFC Standard Life. Before joining HDFC Standard Life, he was the MD and CEO of Infosys BPO and was also heading an Independent Validation Services unit in Infosys Technologies. He started his career with Bank of America delivering diverse roles ranging from Head of Technology Investment Banking for Asia, Regional Finance Head for Wholesale Banking and Global Markets and Chief Finance Officer of Bank of America (India). He moved to Credit Lyonnais Securities in 2001 in Singapore where he headed their investment banking franchise for South East Asia and structured finance practice for Asia before joining Infosys BPO in 2005. Mr. Chaudhry completed his Engineering in 1985 from Birla Institute of Technology and Science, Pilani and MBA in 1987 from IIM, Ahmedabad.
32
33
Vision Of HDFCSLIC
'The most successful and admired life insurance company, which means that we are
the most trusted company, the easiest to deal with, offer the best value for money,
and set the standards in the industry'.
' The most obvious choice for all '.
Values of HDFCSLIC
Values that we observe while they work:
Integrity
Innovation
Customer centric
People Care “One for all and all for one”
Team work
Joy and Simplicity
]
Accolades and Recognition
Rated by 'Businessworld' as 'India's Most Respected Private Life Insurance Company'
in 2004 Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India’s
number 1 personal finance magazine.
34
GROWTH OF HDFCSLIC
HDFC Standard Life records impressive growth Premium Income grows by
112%HDFC Standard Life has recorded a strong year on year growth of 112% for the
period April-March 2005- 06, in comparison with the same period 2004-05, with new
business first year premium of Rs.1029 crores. The growth achieved by the company was
considerably higher than the private sector industry average of 84% for 2005-06. In terms of
effective premium income (EPI), which gives a 10% value to a Single Premium policy, and is
an internationally accepted indicator of an insurance company’s performance, the EPI grew
by 103% from Rs.436 Cr. to Rs. 887Cr.
HDFC Standard Life’s growth in new business is a result of number of lives insured as well
as, an increase in the average premium. For the individual business, volume measured by the
number of lives insured, witnessed a 32% growth. The average premium also increased by
62% from Rs.17,000 in 2004-05 to Rs. 27,500 in 2005-06. Commenting on the huge potential
that exists in the Indian market today, Mr. Deepak Satwalekar, Managing Director & CEO of
HDFC Standard Life emphasized,
“The GDP has been growing over 8% per annum and 47% of all savings are now in financial
saving forms; 16% of savings is in the form of insurance premiums and another
16% is in Provident Fund and Pensions i.e., 32% of India’s financial savings of the household
sector are available to be tapped.
Therefore, growth for the private life insurance industry is inevitable and HDFC Standard
Life is confident of maintaining a steady growth pace.”
Highlighting HDFC Standard Life’s differentiators, Mr. Deepak Satwalekar said, “Our
Company has the most competitive fund management charge, which is the lowest in equity
based products. Our fund management charge is as low as 0.8% per annum, the key to
enhancing long-term returns. Our other differentiator is that we believe in offering life
insurance solutions to customers based clearly on their needs, and ‘Disha’ is the way it is
done.”
35
DISHA
‘Disha’ is a Professional Sales Skills Training Program. The delegates in this program
are introduced to a ‘Need-based’ selling approach, which can cater to all our clients
opting for life insurance solutions . ‘Disha’ is aimed at providing a good service to
the client and building long-term relationships
Contribution to the individual business premium income by the different channels of
distribution also changed significantly, compared to last year. The Corporate Agency
and Banc assurance channel has grown tremendously and currently accounts for 43%
of the company’s business. Speaking on this, Mr. Satwalekar said, “The strategy to
concentrate on activating a limited number of bancasurance partners rather than going
in for signing up a large number of banks in the early years, also paid off. Our key
to achieving bancassurance success is our belief in a partnership approach, customized
product offerings, highly ethical dealings and providing good value to our partners and
their customers.”
HDFC Standard Life’s offerings of Employee Benefit Solutions, to the corporate
sector, through Group Business, have met with increased success with year on year
growth of 174%. Commenting on the strong growth of HDFC SL’s Group Business,
Mr. Satwalekar said, “Our excellent fund performance on retirement products and
increase in our client base with 150 clients cutting across a spectrum of industries
spanning from multinationals to PSUs to the older business houses, have been the
highlights of the year.”
Ongoing training for conventional products and specialized training for unit linked
products for more than 33,000 of our financial consultants has also helped its
customers choose the products best suited for their need for protection, savings,
investments and pensions. HDFC Standard Life is the only company requiring its
sales force to undergo specific training in ULIP before they are permitted to sell the
same. There has been a huge jump in the number of its Financial Consultants who
have qualified to become members of the prestigious Million Dollar Round Table
36
HDFC Standard Life continues to have one of the widest reaches amongst new
insurance companies. The Company’s geographical presence has also increased and
covers 169 offices across the country.
MARKET SHARE OF DIFERRENT INSURANCE SECTOR
LIC - 82.3%
ICICIPRUDENTIAL - 5.63%
BIRLA SUNLIFE - 2.56%
BAJAJ ALLIANZ - 2.03%
SBI LIFE - 1.8%
HDFC SLIC - 1.36%
TATA AIG - 1.29%
MAX NEWYARK - 0.9%
AVIVA - 0.79%
KOTAK - 0.51%
ING VYASA - 0.37%
AMP SANMAR - 0.26%
MATALIZE - 0.21%
37
ORGNIZATIONAL STRUCTURE OF HDFCSLIC Chief Executive officer
Business Head
Zonal Manager
Regional Manager
Territory Manager
`
Branch Manager
SDM/BDM/ASM
Financial Consultant
Customer
38
Group Companies
39
Some of bancassurance partners
40
Associate Companies
HDFC Limited
HDFC Bank
HDFC Mutual Fund
HDFC Sales
HDFC ERGO General Insurance
41
Other Companies
HDFC Trustee Company Ltd.
GRUH Finance Ltd.
HDFC Developers Ltd.
HDFC Property Ventures Ltd.
HDFC Ventures Trustee Company Ltd.
HDFC Investments Ltd.
HDFC Holdings Ltd.
Credit Information Bureau (India) Ltd
HDFC Securities
Bancassurance Partners
HDFC Bank
Saraswat Bank
Indian Bank
42
HDFCSL Milestone
2008
2007
2006
Archive
Received the PCQuest Best IT Implementation Award 2008 for Consultant Corner, the applications for its financial consultants, providing centralized control over a vast geographical spread for key business units such as inventory, training, licensing, etc.
Received the 2008 CIO Bold 100 Award for its mobile workforce portal and the Special 2008 CIO Security Award for a secure computing environment, including identity management respectively.
Mr. Deepak M Satwalekar Awarded QIMPRO Gold Standard Award.
expanded its reach in the Bancassurance channel by arrangements with co-operative banks in the rural areas.
Continued to increase its focus on quality service, by putting in place a robust mechanism to capture ‘Voice of the Customer’ through service audits across its offices. This was complemented by use of technology that enabled capture of all interactions with customers across all touch points
Sar Utha Ke Jiyo was honoured as ‘Among India’s 60 Glorious Advertising Moments. The advertisements of the company were ranked 6th amongst ‘The 10 most effective Advertisements’ in September 2007.
Received the PCQuest Best IT Implementation Award 2007 for Wonders, its path-breaking implementation of an enterprise-wide workflow system. In addition the company also bagged the EMC storage award for being the most innovative users of storage and storage management.
Pension Plan Tops Mint’s Survey of Best TV Ads.
HDFC Standard Life’s advertising created high awareness for the brand and bagged 2 silver and 1 bronze awards at the ADFEST 2007 National Awards organised by the Advertising Agencies Association of India (AAAI). The 3 awards are the highest won by any single brand in the financial services business (including banking, mutual fund, insurance and other financial services).
Ranked 29th most trusted Indian Brands amongst the Top 50 Service Brands of 2006 according to a study conducted by the Brand Equity – Economic Times, the leading business publication of India.
HDFCSL Milestone
2008
2007
2006
Archive
43
The year witnessed the launch of ‘My Account’, a web-based facility with various policy servicing options such as switch, premium redirection to be executed by clients, without recourse to visiting a branch
As against a regulatory requirement of writing 18% of all policies in rural areas, the company issued over 1, 21,000 policies accounting for more than 23% of all policies issued during the year.
The company had been awarded the “Intelligent Enterprise” Award by the Express Computer Magazine – Part of the Indian Express Group, for investing in workflow and imaging technology which helped in increasing volumes without affecting service standards.
Was selected as the '4Ps Power Brand 2006', for being one of India's Top 25 'Most Innovative Companies' in an exclusive survey conducted by ICMR (Indian Council of Market Research) and 4Ps - Business and Marketing (a Business and Marketing magazine published by Planman Media).
Biggest NGO covered on 28th March 2006 with 14000 lives.
Corporate Governance
Introduction
The Corporate Governance Policy provides the framework under which the Board of Directors operates. It includes its corporate structure, culture, policies and the manner in which it deals with various stakeholders. The governance policies address the responsibilities, authority and administration of the Board of Directors. The policies also include the responsibilities of the Principal Officer and define the reporting relationships. Timely and accurate disclosure of information regarding the financial situation, performance, board constitution, ownership of the company etc. is an important part of corporate governance. Corporate governance arrangements are those through which an organisation directs and controls itself and the people associated with it.
44
45
Life Insurance & Pension
Solutions
46
Life Insurance & Pension
Solutions
47
Protection Plans
48
Protection Plans
49
Children’s Plans
50
Children’s Plans
51
Savings Plans
52
Savings Plans
53
Pension Plans
54
Pension Plans
55
Health Plans
56
Health Plans
57
PRODUCTS OF HDFCSLIC
The products of HDFCSLIC are mainly divided in to four parts -:
Individual product
Group product
Rural product
Social product
Individual Products
We at HDFC Standard Life realize that not everyone has the same kind of needs.
Keeping this in mind, we have a varied range of Products that you can choose from
to suit all your needs. These will help secure your future as well as the future of
your family.
Protection Plans
You can protect your family against the loss of your income or the burden of a loan
in the event of your unfortunate demise, disability or sickness. These plans offer
valuable peace of mind at a small price.
Our Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan.
Investment Plans
58
Our Single Premium Whole Of Life plan is well suited to meet our long term
investment needs.
We provide you with attractive long term returns through regular bonuses.
Pension Plans
Our Pension Plans help you secure your financial independence even after retirement.
Our Pension range includes our Personal Pension Plan , Unit Linked Pension, Unit
Linked Pension Plus
Savings Plans
Our Savings Plans offer you flexible options to build savings for your future needs
such as buying a dream home or fulfilling your children’s immediate and future
needs.
Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment,
Unit Linked Endowment Plus, Money Back Plan , Children’s Plan , Unit Linked
Youngstar, Unit Linked Youngstar Plus & simpli life plan.
59
Group Products
One-stop shop for employee- benefit solutions
HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees. We offer different products for different needs of
employers ranging from term insurance plans for pure protection to voluntary plans
such as superannuation and leave encashment.We now offer the following group
products to our esteemed corporate clients :
Group Term Insurance with Riders
Group Term Insurance with Profit-Share
Group endolment Plan
For Gratuity
For Defined Benefit Superannuation
For Defined Contribution Superannuation
Group Leave Encashment Plan
Rural Products
According to our research findings, there is keenness among rural customers to invest
in savings cum protection plan with a term of five years. Especially, if the premium
60
amount is low and affordable. Keeping this in view, we have designed a special
product called
Bima Bachat Yojana.
We have also designed a product called Super Bachat Yojana wherein the rural
customer can save regularly to create a corpus for future needs.
.Bima Bachat Yojana
The key objective of this product is to provide cover to economically weaker section
and also to popularize the concept of life insurance and savings in rural areas. Bima
Bachat Yojana is a low premium life protection plan. One time premium for a five-
year term is just Rs. 100.
Benefits on death before Maturity: Rs 1,000.
Benefits on Surrender before Maturity
During year Surrender Value (Rs)
1 100
2 120
3 140
4 160
5 180
Benefits on Maturity
On survival of the life assured to maturity, a benefit of Rs 200 will be paid.
Age Limit : 18 to 50 years
61
Super Bachat Yojana
Super Bachat Yojana combines the benefits of life protection as well as super
savings. It helps you save money to meet the expected long term needs. What’s more,
it lets you participate in the surplus profits of the company !
Benefits on Maturity
Sum Assured + Reversionary Bonus + Interim and Terminal Bonus
(Bonuses will be declared normally as on 31st March )
Benefits On Death
During the first year a basic benefit of 80% of premiums paid and after the first year lesser of
basic sum assured + reversionary bonuses paid and total premiums paid to date +interest
@ 6 % per annum0
Tax Benefits
Premiums paid are eligible for tax relief under Section 80 C of the Income
Tax Act, 1961
Any sum received is exempt under Section 10 [10D] of the Income Tax
Act, 1961
Age and Term Limits
Minimum Age at Entry 18 years
Maximum Age at Entry 60 years
Maximum Age at Maturity 75 years
Minimum Term 10 years
Maximum Term 30 years
62
Minimum Premium & Policy Fee
Option Premium Fee
Annual 1800 150
Half Yearly 1000 80
Quarterly 550 45
Documents Required for Claim Payments
Fully completed Claim Form
Original Policy document
Original Death Registration Certificate
Original Certificate of Doctor certifying death
Original Certificate of cremation
There are NO exclusions under this product
Social Product
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to
members of a Development Agency for a term of one year. On the death of any
member of the group insured during the year of cover, a lump sum is paid to that
member’s beneficiaries to help meet some of the immediate financial needs following
their loss .
63
Eligibility
Members of the development agency and their spouses with:
- Minimum age at the start of the policy 18 years last birthday
- Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The group
to be covered is only eligible if it contains more than 500 member
Premium Payments
The premium to be paid will be quoted per member in the group and will be the
same for all members of the group.
The premium can only be paid by the Development Agency as a single lump sum
that includes all premiums for the group to be covered. Cover will not start until the
premium and all the member information in our specified format has been
received.The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.
64
Benefits
On the death of each member covered by the policy during the year of cover a lump
sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where
the death is as a result of an accident, an additional lump sum will be paid equal to
half the sum assured. There are no benefits paid at the end of the year of cover and
there is no surrender value available at any time.
The role of the Development Agency
Due to the nature of the groups covered, HDFC Standard Life will be passing
certain administrative tasks onto the Development Agency. By passing on these tasks
the premium charged can be lower. These tasks would include:
Submission of member data in a specified computer format
Collection of premiums from group members
Recording changes in the details of group members
Disbursement of claim payments and the mortality rebate (if any) to
group members
These tasks would be in addition to the usual duties of a policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance on how to complete the tasks
appropriately.
65
Since these additional tasks will impose a burden on the Development Agency, the
Development Agency may charge a Rs. 10 administration fee to their members.
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or indirectly, as
an inducement to any person to take out or renew or continue an insurance in
respect of any kind of risk relating to lives or property in India, any rebate of
the whole or part of the commission payable or any rebate of the premium
shown on the policy, nor shall any person taking out or renewing or continuing
a policy accept any rebate, except such rebate as may be allowed in
accordance with the published prospectus or tables of the insurer
If any person fails to comply with sub regulation ( previous point )
above, he shall be liable to payment of a fine which May extend to rupees
five hundred
INCOME TAX SECTION
GROSS ANNUAL SALARY
HOW MUCH TAX CAN YOU SAVE?
HDFC STANDARD LIFE PLANS
Sec. 80CAcross All
income Slabs.
Upto Rs. 33,660 saved
on investment of
Rs. 1,00,000.
All the life insurance plans.
Sec. 80 CCCAcross all income
slabs.
Upto Rs. 33,660 saved
on Investment of Rs.1,00,000.
All the pension plans.
Sec. 80 D* Across all income Upto Rs. 3,366 saved All the health insurance
66
slabs.on Investment of
Rs. 10,000.
riders
available with the
conventional plans.
TOTAL SAVINGS POSSIBLE **
Rs. 37,026
Rs. 33,660 under Sec. 80C and under Sec. 80 CCC , Rs.3,366 under Sec.80 D,
calculated for a male with gross annual income not exceeding Rs. 10,00,000.
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the conditions laid down therein.
* Applicable to premiums paid for Critical Illness Benefit, Accelerated Sum Assured and Waiver of Premium Benefit.** These calculations are illustrative and based on our understanding of current tax legislations.Please contact your tax consultant for exact calculation of your tax liabilities.
Tax Benefits Given To Customers
67
MEANING OF SALES PRAMOTION
In marketing, sales promotion is one of the four aspects of promotion. ( The other
three parts of the promotional mix are advertising , personal selling , and publicity /
public relations. ) Sales promotions are non-personal promotional efforts that are
designed to have an immediate impact on sales. Sales promotion is media and non-
media marketing communications employed for a pre-determined, limited time to
68
increase consumer demand, stimulate market demand or improve product availability.
Examples include:
coupons
discounts and sales
contests
point of purchase displays
rebates
free samples ( in the case of food items)
gifts and incentive items
free travel, such as free flights
Sales promotions can be directed at either the customer, sales staff, or distribution
channel members ( such as retailers ). Sales promotions targeted at the consumer are
called consumer sales promotions. Sales promotions targeted at retailers and
wholesale are called trade sales promotions. Some sale promotions, particularly ones
with unusual methods, are considered gimmick by many.
Advertising is the commercial promotion of goods, services, companies and ideas,
usually performed by an identified sponsor, and performed through a variety of media.
Marketers see advertising as part of an overall promotional strategy. Other components
of the promotional mix include publicity , public relations , personal selling , and sales
promotion.Sales , or the activity of selling , forms an integral part of commercial
activity. Mastering sales is considered by many as some sort of persuading "art" . On
the contrary, the methodological approach of selling refers to it as a systematic
69
process of repetitive and measurable milestones , by which a salesperson relates his
offering enabling the buyer to visualize how to achieve his
goal in an economic way.`Selling' has long suffered from a tarnished image. Dubious
selling practices may occasionally result in a sale if the customer is particularly
gullible . But it is arguable that, even then, only good marketing ( which encompasses
a far wider range of skills, with an almost diametrically opposed motivation ) ' will
lead the customer to buy again from the same company '. Organizations seldom profit
from single purchases made by first-time customers. Normally they rely on repeat
business to generate the profit that they need.
Selling is a practical implementation of marketing; it often forms a separate grouping
in a corporate structure, employing separate specialist operatives known as salesmen
( singular: salesman or salesperson ).
The successful questioning to understand a customer's goal , the further creation of a
valuable solution by communicating the necessary information that encourages a buyer
to achieve his goal at an economic cost is the responsibility of the sales person or
the sales engine (e .g. internet, vending machine etc ).
The primary function of professional sales is to generate and close leads, educate
prospects, fill needs and satisfy wants of consumers appropriately, and therefore turn
prospective customers into actual ones.From a marketing point of view, selling is one
of the methods of promotion used by marketers.
Other promotional techniques include advertising, sales promotion, publicity, and
public relations.
Various sales strategies exist , such as tit-for-tat which is best if ongoing dealings and
interactions are expected. This insight is behind so-called consultative sales process
which are used by Saturn to sell cars, as well as for some direct Business-to-Business
sales.
70
Several types of sales exist including direct, consultative, and complex sales. Complex
sales varies from other types in that the customer plays a more pro-active role , often
requiring proposal response to their Request for Proposal (RFP).
Direct marketing is a discipline within marketing that involves the planned recording,
analysis and tracking of individual customers' (business-to-business or consumer )
responses and transactions for the purpose of developing and prolonging mutually
profitable customer relationships. The term was coined in the 1970s by Lester
Wunderman, who pioneered direct arketing techniques with brands such as Amex and
Columbia Records.
Direct marketing is a form of marketing that attempts to send its messages directly
to consumers, using "addressable" media such as mail and email . Therefore, direct
marketing differs from regular advertising in that it does not place its messages on a
third party medium, or in the public Market, such as a billboard or a radio
commercial would. Instead, the marketing of the service or commodity is addressed
directly to the target customer.
DM uses non-addressable media as well as addressable ones. The important thing is
that it seeks a response and it is this which the recipient, usually a marketer, bases
their future actions , or contact strategy, on. In fact all DM is done through media,
it's just that many, e.g. email, telemarketing, SMS, are "addressable" . It usually is not
taken to include face-to-face contact. Direct marketing is attractive to many marketers,
because in many cases its effectiveness can be measured directly. For example, if a
marketer sends out one million solicitations by mail , and ten thousand customers can
be tracked as having responded to the promotion, the marketer can say with some
confidence that the campaign led directly to the responses. By contrast, measurement
of other media must often be indirect, since there is no direct response from a
consumer . Measurement of results , a fundamental element in successful direct
marketing, is explored in greater detail elsewhere in this article.
71
While many marketers like this form of marketing, it is sometimes criticized for
generating unwanted solicitations, which are sometimes referred to as junk mail and e-
mail spam. However spam and bulk mail drops are not true forms of Direct
Marketing as recipients are not identified as prospects by any form of selective
criteria.
72
OPPORTUNITIES TO A FINANCIAL CONSULTANT IN HDFCSLIC
73
You have the talent to display extraordinary financial acumen. You take pride in your
network of friends, colleagues and professional contacts. So, what are you waiting for?
Join forces with HDFC Standard Life insurance as a Financial Consultant.
Become a Financial Consultant, unlock your true potential and command unparalleled
respect.
EASY WAY TO START ON YOUR OWN
• Zero investment
• Flexible work timings, part- or full - time
• Sunrise industry
STRONG PARTNERSHIP
• A powerful brand - HDFC Standard Life
( Part of the HDFC Group - renowned financial experts )
• Professional training programmes & continued guidance
• Unmatched support
HIGH POTENTIAL INCOME
74
• Attractive commission structure & rewards
• Decide your own pay cheque
• Long-term earning potential
• Your reward
THE GOLDEN KEY TO SUCCESS
Worried, if you’ve chosen the right career path ? Have you asked yourself questions
like , Will you be able to have a successful career ahead ? Will you be able to
achieve your dreams, the ones you have always dreamt of , for yourself and your
family ? Will your existing job help you unlock your true potential and help you to
discover what you are capable of ?
We offer you a unique opportunity to put your career path on the fast track. Climb
the ladder of success with ease . Become a financial consultant with HDFC Standard
Life.
Financial Consulting , the right way to jump-start your career
As a Financial Consultant, your role will be to identify prospective customers. You
will make presentations, as to how you can help analyze their financial needs, provide
customized financial solutions to cater to their respective needs and conduct reviews
on a regular basis to keep your customers on track.
EASY WAY TO START ON YOUR OWN
75
• Zero Investment
There is no start-up capital . Be your own boss; with a flexible working environment,
unlimited earning potential and the opportunity to be part of a world class sales team.
The advantage is all yours!
• Flexible work timings
You can work whenever you like and from wherever you like. You can work full-
time or part –time, depending on your convenience. It’s like no other job. However,
the time you invest will determine your success.
• Sunrise industry
Life Insurance in India has a huge potential for growth. Statistics reveal that only
25% of the insurable population in India is insured. And those insured are in need of
still higher insurance cover . The over 100% growth displayed by private life insurers
indicate this huge untapped potential.
STRONG PARTNERSHIP
76
• A powerful brand - HDFC Standard Life Insurance
We were the first private life insurance company to be granted a license by
IRDA.
• We have been rated by Businessworld magazine as India’s Most
Respected Private Life Insurance Company in 2004.
• We have grown over 130% in the last year and today have more than 8
lakh policyholders.
• We have one of the widest branch networks with offices in over 100 cities
and servicing over 440 towns.
• HDFC Standard Life Insurance has one of the highest brand recall of
around 80%. ( Source: AC Neilson ORG MARG, April 2005 ). A high brand
recall translates to higher chances of customers buying insurance from us.
• Professional training programs & continued guidance
77
At HDFC Standard Life, training is an inherent element of our support system ( at
no cost ) for our new Financial Consultants. Some of our training and support
initiatives are as follows:
• IRDA Training: Online training of 50 hours prepares you for your career as a
Financial Consultant and enables you to pass the IRDA examination. After the IRDA
license , you take your first step towards a successful career as a Financial Consultant.
• Basic Training & Induction: Independent of your work experience, this training will
perfect your knowledge about the insurance industry along with comprehensive
knowledge about HDFC Standard Life products.
• Disha Training: This is a professional sales skill program devised by us to hone
your selling skills. This program enables you to understand customer needs and
provide need-based insurance solutions. A huge step from an amateur to a true finance
professional.
• Advanced Training: Once you have settled down as a Financial Consultant
professional, we will continously upgrade your capability and knowledge through
sophisticated training programs, fit for this dynamic world of financial products and
markets.
• Unmatched support
• Marketing activity support to make your task easier.
• Advertising & communication support throughout the year .
• Customerfriendly brochures and sales aids to help you in selling insurance
solutions to customers.
• 24-hour information support, to help you track your performance and income.
HIGH POTENTIAL INCOME
78
Decide your own pay cheque
Your income earning potential is directly proportional to the effort put in by you .
it’s a simple formula- the more people you meet, the more you sell, and the more
you earn. The table below illustrate how a minimum number of policies sold in a
month has the ability to give you high-income returns at the end of the year.
YEAR -1 YEAR 2 ONWARDS
PERIOD(weeks) Policies sold Premium per policy Commission@ 40%
Renewal income P/Y @ 5%
Week 1 1 35000 14000
1750
Week 2 1 35000 14000
1750
Week 3 1 35000 14000
1750
Week 4 1 35000 14000
1750
Per Month 4 140000 56000
7000
Per Year 48 1680000 672000
84000
79
Our commission Structure ( as per IRDA guide line ) has the ability to give you the
maximum benefits for every policy you sell.It’s as easy as writing your own pay
cheque ! • Long term earning potential
The policies sold by you will give you a renewed income every year. The table
below illustrate how the policies sold by you give you a renewed income year on
year .
Period year 1 year 2 year 3 Year 4 year 5
Commission
income 420000 420000 420000 420000 420000
Renewal income 84000 168000 252000 336000
Total Income 420000 504000 588000 672000 756000
0
500000
1000000
1500000
2000000
Total Income
Renewalincome
Commissionincome
So every year your income keeps increasing steadily ( as shown in above graph ) even
if you sell the same number of policies every year .
80
• Regular income
The commission you earn is paid by the company every 15 days. This ensures that
you get a regular income when you associate with us
• Your reward
We have several reward programs to inspire good performance and create a positive
spirit amongst our Financial Consultants. These reward programs include foreign trips,
seminars, prizes and special club memberships to the Silver Club, Gold Club &
Platinum Club.
We also spons or our top performing Financial Consultants for international training
programs and seminars. This year , we are sponsoring 124 Financial Consultants for
such events.
81
RECRUITMENT PROCESS OF FINANCIAL CONSULTANT
82
Enrolment and Licensing process
Interview to assess your suitability
On selection - 50 Hours of training (Worth Rs 10,000)
On successful completion of training and exam - License to sell life Insurance for a period of 3 years will
Now you are ready to sell!!!
RECRUITMENT - SUCCESS FORMULA
25 CONTRECTS
10 INTERVIEWS
2 SELECTED
83
84
RESEARCH METHODOLOGY
RESEARCH DESIGN
The purpose of the methodology is the design the research procedure this includes the
over all design. The sampling procedure, the data collection method and analysis
procedure. Marketing research is the systematic gathering recording and analyzing of
data about problem relating to the marketing of goods and services . The essential
purpose of marketing research is to provide information which will facilitate the
identification of an opportunity of problem situation and to assist manager in arriving at
best possible decision when such situation are encountered. Basically there are two types
of researches, which according to their applicability, strength, weaknesses, and
requirement used before selecting proper type of research, their general type of
researches are exploratory and conclusive. There researches are as follows :-
Exploratory Research Design
It is also known as qualitative research, it seeks to discover new relationship it aims
a defining the main problem and including the identification of the relevant variables
and the possible alternative solutions it can further be divided into three parts.
Conclusive Research Report :-
It is also known as quantities research, it is designed to help executives of action that
is to make decision. When a marketing executives makes a decision. Are course of action
is being selected from among a number of available. The alternative may be as few as
two virtually infinite. They may be well defined or only vaguely glimpsed. Conclusive
research provides information, which help the executives make a research may come
close to specifying the precise alternatives to chose, in their cases especially with
descriptive studies the research will only particularly clarify the situation and much will
be left to the executives judgment.
85
1. Data Collection Method
The most important and necessary thing is collection accurate data to achieve useful
reseals. Questioning and ovsestioning and observations are two basic methods of
collecting data marketing research. . Questioning as the name suggest is distinguished
by the fact that data are collected by asking question to people who are thought to
have the desired informations. It may be asked in person are in writing . Under
observations researchers asked no objects actions in which they are interested may be
manually or mechanically.
Advantages Of Questioning Method:-
(a) Versatility
Every marketing problem involves people therefore ideas relating to the problem and
its solution can be obtained by asking these people about the problem. Knowledge
opinions motivation and intention are usually not open to observations, except where
records when been maintained.
(b) Speed And Cost :-
Questioning is economical and factor than conducting interviews have more controls
over the data gathering activities observes very less time wasted questioning.
2. Disadvantages Of Communication Under
Questionnaire Studies :-
Unwilling of respondent to provide information .
Inability of respondent to provide information
Influence of questioning process
86
3. Method Of Communication Under Questionnaire Studies :-
Their different methods of communication are available :-
(a) Personal Interviews
Under this the interviews obtains information’s from respondent in face to face
meeting.
( b ) Telephonic Interview
It is similar to that of personal interviews, but the communication bit been interviewer and
respondents is via telephone instead of face to face meeting or direct personal contact.
(c) E-Mail
Under this method the questionnaire are e-mailed to the respondent who also return
them by e-mail some time. Unstructured questions and difficult the customer are not
very well aware are more effectively handless by personal interviews.
(d ) Personal interviews
It is most versatile and flexible of the three communication methods. Unstructured questions
and long and difficult questionnaire or the questions about which the customer are not
very well aware are effectively handled by of personal interviews. During the interview
itself he presence of interviewer permits flexibility in procedure. The questioning can be
adapted to saturation further explanation or clarification can be given to the respondent for
sorting another greatest advantage of using personal interview in that projects an be stopped
or altered at any point during the study which is not possible with mail study.
87
4. Information’s Obtained
Both quality and quantity of information obtained are important most commercial research
organization operate on the assumption that questions can be handled best, by personal
interviews, next best by mail least by telephone.
5. Influence Of Interviews
The presence of the interviewer undoubtly has some effect on accuracy of the data obtained
the effect may be good or bad or both the interaction between interviewer and respondent
may bias the respondent replies and the personal interest and attitude of the interviewer will
cause them to interpretative the responses differently.
6. Control Of Sample
The largest difference among the three method of communication is in the about control
they permit over the sample from which information are collected. A method is weak If it
doesn’t permit objective designation of there individual from whom data are obtained .
Every type of customer is to be located and interviewed
88
89
ANALYSIS ON RECRUITMENT OF FINANCIAL CONSULTANT
Q. Age :-
20- 25 = 20%
25-30 = 40%
30-35 = 30%
Above 35 = 10%
20%
40%
30%
10%
20-25
25-30
30-35
35&above
Analysis
At the time of recruitment when I consider the age factor age group between 25 to
30 is more conscious to work as a financial consultant because they want to earn
more money or we can say that they want to earn more in comparison to they
earning presently.
90
Q. Gender
Male = 67%
Female = 33%
67%
33%
male
female
ANALYSIS
The above graph shows that the male are more conscious in comparison to female to
work and earn more as a financial consultant .
91
Q. Occupation :-
(a) Business = 18%
(b) Profession = 26%
(c) Service = 12%
(d) House wife = 13%
(e) Unemployed = 31%
18%
26%
12%13%
31%business
profession
services
housewife
unemployed
ANALYSIS
92
The above diagram shows that the unemployed people are highly interested to
work as a financial consultant to earn something in comparision to the other
persons of different occupations.
Q. Qualification :-
(a) Under Graduate = 26%
(b) Graduate = 43%
(c) Post Graduate = 31%
26%
43%
31%under graduate
graduate
post graduate
ANALYSIS
When we see the interest of people to work as a financial consultant on
qualification basis post graduate people are more interested in comparision to
undergraduate and graduate people.
93
Q. Marital status:-
(a) Married = 65%
(b) Un Married = 35%
65%
35%married
unmarried
ANALYSIS
The above graph shows that the married people are more conscious to earn more
as a financial consultant because their needs increases in comparison to the
unmarried peoples.
94
Q. Annual Household Income (Per Annum):-
(a) 1lac To 2 lac = 80%
(b) 2 lac To 5 lac = 19%
(C) above 5 lac = 1%
ANALYSIS
The above diagram shows that the income group of 1lac to 2 lac is highly
interested to work as a financial consultant in comparison to the other income
group.
95
80%
19%1%
less than 2 lac
between 2 to 5lac
5lac and above
Q. Would you like to earn additional income through a business opportunity with
HDFCStandard Life ?
(a) Yes = 74%
(b) No = 26%
74%
26%
yes
No
ANALYSIS
The above graph shows that when I talk to the people regarding an additional income
through a business opportunity with HDFC Standard Life 74% people are interested
to get this business opportunity.
96
Q. If Yes how many hours in a week can you commit for that business
opportunity?
(a) 10hrs – 20 hrs = 24%
(b) 20hrs – 30hrs = 68%
(C) 30hrs & Above = 8%
24%
68%
8%
10hrs to 20hrs
20hrs to 30hrs
30hrs and above
ANALYSIS
The above diagram shows that the interested people who wants to work as a
financial consultant are mostly likes to give 20 to 30 hours per week to do the
business .
97
Customer Awareness Analysis
Q. Profession :
Business man = 70% (self) 30% (consultant)
Doctor = 66%(self) 34% (consultant)
Govt.Employee = 11(self) 89% (consultant)
Lawyer = 79% (self) 21%(consultant)
Trader = 40%(Self ) 60% ( Consultant)
Engineer =48% ( self ) 52%(consultant)
70% 66%
11%
79%
40% 48%30% 34%
89%
21%
60% 52%
0%20%40%60%80%
100%
self
consultant
ANALYSIS
To know how the peoples takes the decision regarding purchase of the policy and to
know the role of financial consultant I talked with existing customer . when I talked
to the people of different professions I get the result that government employees
98
mostly like to take the policy after consultant with the financial consultant in
comparision to the other professional peoples .
Q. Average monthly income of the family ?
Self Consultant
10000 to 15000 = 11% 87%
15000 to 20000 = 70% 30%
20000 to 25000 = 63% 37%
25000 & Above =
11%
70%63%
87%
30%37%
0%
20%
40%
60%
80%
100%
10000 to15000
15000 to20000
20000 to25000
25000 &above
self
cosultant
ANALYSIS
The above graph shows that the income group of 15000 to 20000 shows high trust
on the financial consultant regarding the purchase of the insurance policy.
99
Q. From where did you receive information about the product and services of
HDFCSLIC?
Through the company = 24% Through relative and friends = 14%
Through advertisement and media = 6%
Through Financial consultant = 56%
24%
6%
56%
14%
Through the company
Through advertisement and media
Through Financial consultant
ANALYSIS
100
The above graph shows that 56% people to whom I talked got the information
regarding the insurance policy and different insurance products form the financial
consultant of the organization.
Q.Are you satisfied with the product which you have purchased after consulting
with financial consultant ?
YES = 98% NO = 2%
98%
2%
YES
NO
ANALYSIS
The above graph shows that mostly the people who purchased the insurance policy
after consulting the financial consultant are satisfied with the recommended product.
101
FINDINGS
1- In this analysis we find the 25-30 age group person more
conscious to work as financial consultant.
2- Man are more conscious to work as financial consultant
as compare to Female.
3- By above Data analysis we find 31% unemployed people
and 26% professionals join as occupation.
4- 43% Graduates and 31% Post graduates work as
financial consultant.
5- Marital status of financial consultant is 65% people are
married and 35% people are unmarried.
6- Most of persons household income is less then 2 lakh
and they are 80%.
102
7- By analysis we find most of people work in a week 20-30
hrs.
103
Conclusion of the analysis
This is an opinion survey which has been finalized in to two parts :-
First part relates to the non consumer of the HDFC in which people’s opinion with
other was sought to know their views to work as a financial consultant.
In the second part of the survey existing customer of HDFC were approached to
know the importance of the financial consultant in the organization.
These people are highly satisfied with the products and services of the organization
and services of the financial consultant .
Now we can say that the financial consultant plays an important role in the growth
an in the sakes promotion of an organization with reference to insurance sector
104
RECOMONDATION
The following recommendation is given after the complete and through study of the
project :-
number of branches should be increased
Processing must be simple
Premium of the policies should be reduced
Group should concentrate more on rural areas
Status of the policies should be delivered to the policy holder on time
HDFCSLIC may undertake more advertising and publicity
They should adopt aggressive marketing strategy
They wanted to give advanced training to their financial consultant
Hdfc wanted to conduct motivational programme for their employees and for
their certified financial consultant.
105
106
FUTURE OF HDFCSLIC
HDFCSLIC looks confidently in to the future to face and thrives in the intense
competitive environment at is emerging.
The company has now gained experience and has required strategies for gaining a
leadership position. With cutting edge relevant technology aggressive marketing
innovation tight control over costs and with its motivated work force the company is
all sat to emerge as a model global corporate entity in the days ahead.
107
ASSUMPTION AND LIMITATION
Assumption:-
It is assumed that chosen sample Is representative of the whole Population.
It is assumed that the customers had provided information without being
biased on the facility provided by different companies.
Limitation
The study has not been conducted on a large scale and hence the
possibility of error can not be ruled out.
Some of the customers were not very much interested in ansuring the
questions and hence took them casually.
Samples have been selected on approach basis.
108
109
BOOK :- INSURANCE: 100Hrs PRE –LICENCING TRAINING COURSE
( AS PER IRDA REVISED SYLLABUS)
MAGAZINE :- BUSINESS STANDARD,
ECONOMIC TIMES.
WEB SITE :- www.hdfcinsurance.com, ( for company information)
www.google.com ( for searching etc)
110
111
BUSINESS PARTNER RECRUITMENT FORM
First name ……………………. Last Name……………………………….
Contact no :- (R)……………. (O)……………….. (M) ………………………
Residential address: …………………………………………………………….
…………………………………………………………….
…………………………………………………………….
City: ……… Pin code: ……………………..
Q1. Age: ……
Q2. Gender: Male ( ) Female ( )
Q3. Occupation: Business ( ) Profession ( ) service ( ) House wife ( ) unemployed ( )
(Please mention below the type of business / profession you are in. In case of
service please mention your organization name and designation)
……………………………………………………………………………………………
……………………………………………………………………………………………
112
Q4. Qualification: Under graduate ( ) Graduate ( ) Post graduate ( )
Q5. Marital status: Married ( ) Un Married ( )
Q6. No of children: ……………….
Q7.Annual household income:
(a) 1lac to 2 lac ( )
(b) 2 lac to 5lac ( )
(c) Above 5 lac ( )
Q8. Would you like to earn an additional income through a business opportunity with
HDFC Standard Life ?
(a) YES ( )
(b) No ( )
If yes, how many hours in a week can you commit for this business opportunity?
(a) 10hrs – 20 hrs ( )
(b) 20hrs – 30hrs ( )
(c) 30hrs & Above ( )
113
Customer awareness questionnaire
(Confidential and only for Academic purpose)
Form no: ……… Date …./…/06
Name: ………………………………… Age ……… Sex : M ( ) F ( )
Address: ………………………………………………………………….
………………………………………………………………….
………………………………………………………………….
City : ………………. Pin Code………………..
Contact No :…………………… (M) +91………………………….
Q1. Profession :
Business man ( ) C.A ( ) Doctor ( ) Govt.Employee ( ) Lawyer ( ) House wife ( )
Trader ( ) Engineer ( ) Executive ( ) Any Other (please mention) ……………………
Q2. Average monthly income of the family ?
10000 to 15000 ( )
15000 to 20000 ( )
20000 to 25000 ( )
25000 & Above ( )
Q3. Are you availing any product of HDFCSLIC ?
YES ( ) NO ( )
Q. If Yes Which product are you availing?
114
Protection Plan ( )
Investment Plan ( )
Pension Plan ( )
Saving Plan ( )
Q5. From where did you receive information about the product and services of HDFCSLIC?
Through the company ( )
Through relative and friends ( )
Through advertisement and media ( )
Through Financial consultant ( )
Q7.Are you satisfied with the product which you have purchased after consulting with
financial consultant ?
YES ( ) NO ( )
Q6. Why did you avail the products and services of HDFCSLIC ?
………………………………………………………………………..
………………………………………………………………………..
………………………………………………………………………..
115