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ResearchReport

ONULIP VS MUTUL FUND

KOTAK MAHINDRA LIFE INSURANCE

Submitted in partial fulfillment ofMBA program2008-10

Submitted by Faculty Guide

Disha Yadav Mr. R.K.Srivastava

Roll No. 0828170013

SHERWOOD COLLEGE OF ENGINEERING

RESEARCH AND TECHNOLOGY,

BARABANKI

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INDEX

page No.

Acknowledgement : 4

Declaration : 5

Executive summary : 6

Chapter.1 : 7

Company profile

1. Kotak Mahindra Life Insurance : 82. An Introduction : 83. Company History : 94. Kotak Mahindra Old Mutual Life Insurance : 195. Kotak products : 206. Performance Highlight : 257. Kotak International Business : 29

Chapter.2 : 31

Life Insurance

1. What is Insurance : 322. Brief History of Insurance : 333. Why insurance in India? : 394. About IRDA : 395. Liberalization of insurance sector : 406. Type of Insurance : 417. Objective of Life Insurance : 41

8. Mission & Vision : 44

Chapter.3 :45

Unit Linked Insurance Plan

1. An Introduction : 462. Working of ULIP : 473. Type of ULIP : 484. When ULIP work best : 54

5. Charge Structure : 54

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Chapter.4 :56

Mutual Fund

1. Concept : 57

2. Organization of Mutual Fund : 583. History of Mutual Fund : 594. Advantage of Mutual Fund : 615. Type of Mutual Fund : 626. Frequently use term : 62

Chapter.5 : 65Research Methodology

1. Research Design : 66

2. Types of Study : 673. Types of data : 674. Sampling Plan : 685. Limitation of study : 696. scope of study : 707. objectiveve of study : 71

Chapter.6 :72

INVESTMENT BEHAVIOUR IN ULIP vs. MUTUAL FUND

1. Investment behavior in ULIP vs. MF : 732. Findings : 82

Chapter.7 : 94

2. Conclusion : 953. Recommendation : 974. Questionnaire : 985. Bibliography : 101

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Acknowledgement

Special thanks to Mr. R.K.Srivastava and also thank to

Miss. Apoorva Mishra.

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Executive Summary

Than which characterized of literature business on investment in the fixed capital.

According To neoclassical theory of the capital as exploded for example by Irving

Fisher a production Plan for the firm in cohesion so as minimize utility over time.

Under certain well know as Condition. This word to minimizatation. There is no

gap between economic theories Econometric of net worth enterprise of certain for

the optimal capital accumulation. Capitalist accumulated to the provide capital

services. Which are input to the productive process? For Convince to the

relationship between inputs including the input of capital services and input in

summarized in a production function. All those theory is known for fifty least fifty

Year, It is currently understanding a great revival in an interest.

In the most countries, life and non life insurers are subject to different

regulatory regimes and different tax and accounting rules. The main reason for the

distinction between the two type of company is that life, annuity and pension

business is very long term in nature coverage for life insurance or a pension can

cover risk over many decades. By contrast, non-life insurance usually covers a

shorter period, such as one year.

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Company profile

Kotak Mahindra Life Insurance

An Introduction

Kotak Mahindra is one of India's leading financial organizations, offering a wide

Range of financial services that encompass every sphere of life. From commercial

Banking, to stock broking, to mutual funds, to life insurance, to investment

Banking, the group caters to the diverse financial needs of individuals and

Corporate.

The group has a net worth of over Rs. 6,799 corer and has a distribution network

Of branches, franchisees, representative offices and satellite offices across cities

And towns in India and offices in New York, London, San Francisco, Dubai,

Mauritius and Singapore. The Group services around 6.4 million customers

Account.

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Company History

1985-The company was incorporated on 21st November1985. Under the name

Kotak Capital Management Finance Ltd. The Company has been promoted By

Mr. Uday Kotak, Mr. S.A.A Pinto and Kotak & Company. The company

obtained the certificate of commencement of business on 11 th February.

1986-And the Existing promoters were joined by Mr. Harish Mahindra and

Mr. Anand Mahindra. The company's name was changed on 8th April 1986

To Its present name Kotak Mahindra Finance Ltd.

- The Company deals in Bill discounting, leasing and hire purchase,

corporate finance, management of fixed deposit mobilization, financing

against securities, money market operations, consumer finance, Investment

banking and clients' money management.

1990-3, 08,770 No. of equity share subscribed for by the promoters,

directors, 3, 41,230 No. of equity shares allotted as rights as on 28.3.89. 19,

50,000 shares issued as bonus (6, 50,000 shares in prop. 1:1 as on 29.7.89 and

13, 00,000 shares in prop. 1:1 as on 27.2.91).

1991-An application was made to SEBI for approval for setting up mutual

Fund trust and an asset management company. The newly set up Corporate

Advisory Services Group received several mandates for advice on Mergers

and acquisitions and re-structuring. The Company's newly established Foreign

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Exchange Risk Management Service carters to the vast potential demand for

price risk Management. The Company established itself as a major leasing and

hire-purchase Company and as a source of finance for purchasers of

automobiles.

1992-In January, the Company offered and allotted 15, 50,000.

-14% secured partly convertible debentures of Rest 90 each for a total value of

Rs.

13.95 cores in the following manner:

2, 00,000 debentures to promoters, directors, etc.

(ii) 77,500 debentures to employees (including working directors)/workers on

Preferential basis

(iii) 12, 72,500 debentures to Indian public through prospectus.

Additional 30,000 debentures to promoters, directors, etc., 9,500

debentures to employees and 1, 93,000 debentures to Indian public

Were Allotted to retain over subscription.

-As per the terms of debenture issue, a portion of Rs. 45 of each debenture of

Rs. 90 was to be converted into 1 equity share of Rs. 10 each at a premium of

Rs. 35 per share as on the date of allotment of The Debentures. Accordingly

17, 82,500 No. of equity shares allotted as on 25th February, 1992, being the

date of allotment of the debentures.

The non-convertible portion of Rs. 45 of each debenture would be redeemed at

par in three equal installments of Rs. 15, Rs. 15 and Rs. 15 at the end of the

7th, 8th and 9th year respectively from the date of Allotment of the

debentures.

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In April, the Company has raised Rs. 18 cores by issue of Commercial

Paper which has been awarded P1 + rating by Credit Rating and

Information Services of India limited (CRISIL) indicating highest

Standards of safety.

1993-During February, the Company issued 69, 82,500 Rights equity shares

of Rs. 10 each at a premium of Rs. 15 per share in proportion 1:1 (all were

Taken-up). Additional 13,950 shares were allotted to those who had applied

for additional shares.

- The Company issued through a Prospectus 44, 00,000 No. of equity shares of

Rs. 10 each for cash at a premium of Rs. 140 per share of which the following

were reserved for allotment.

30,000 shares to promoters, directors, their relatives etc.

25,000 shares to Foreign/Indian Financial Institutions (all were taken up). Of

the remaining 50,000 shares reserved for allotment on a preferential Basis To

employees (only 34,600shares taken up).Another 5, 55,000 shares To NRIs

were reserved on non-repatriation basis (all were taken up).

Balance 36, 40,000 shares, along with 15,400 shares not taken up by

Employees was offered for public subscription.

At the 8th Annual General Meeting held on 28th September the

Company has reserved 61, 22,000 No. of equity shares of Rs. 10 each

for cash to be allotted at such issue price as may be decided by the

board to Foreign Institutional Investors and/or, Foreign and/or Indian

Pension and/or Mutual and/or other Funds and/or Institutions, Banks,

Companies, Bodies and/or individuals and/or Groups of Individuals.

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The Company's newly set up Corporate Advisory Services Group received

several mandates for advice on mergers and acquisition and Re-structuring and

some have already been executed with success.

1994- The Company entered into a Memorandum of understanding with

KB .Currency Advisors Inc. USA to market their Foreign Exchange Fund

Management programmed.

183, 65,500 Rights equity shares issued in prop. 1:1. 11,800 No. Of

Equity shares forfeited.

- The Company has received the approval of Securities and Exchange Board

of India (SEBI) for setting up a Mutual Fund...

1995 - The Company issued 4, 00,000 - 17% Secured Redeemable Non-

convertible Debenture of Rs. 2500 each including 96000 - 16% Nods reserved

for NRIs/URB (only 9510 taken-up). Unsubscribed portion of 90 Debentures

issued to the public. These are redeemable at par on 7.3.2001 with an option

for early redemption up to a maximum of 5% of the issue Amount Every year.

- The Company entered into a joint venture agreement with Ford Credit

International Inc. (FCI), a subsidiary of Ford Motor Credit Co., USA. It was

proposed to finance all non Ford Passenger cars. Kotak Mahindra Capital

Company became a subsidiary of the Company.

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1996 - The Company's operations were affected by the liquidity crunch,

scarcity of resources, sluggishness in the capital markets and the Overall

deceleration of economic growth.

- The Company has entered into a MOU with the Chubb Corporation, New

Jersey, U.S.A., one of the largest American Insurance firms, to develop a Joint

Venture dedicated to the conduct of causality and property Insurance business

in India.

- The Company has invested a sum of about Rs. 200 laths in Matrix

Information Services private Ltd. (Matrix), a company formed for providing

comprehensive value added information to business and General Users.

Matrix is a wholly owned subsidiary of the company.

- The Company has divested its entire holding of 20, 00,070 No. of Equity

shares of Rs. 10 each of Kotak Mahindra Securities Ltd. (KMSL) and 20,

00,000 ordinary shares of US $ 1 each of Kotak Mahindra International Ltd.

Amok Financial Services Ltd., Kotak Mahindra Securities Ltd.,

provides of broking services to institutional and corporate clients,

Kotak, Mahindra Asset Management Company, Kotak Mahindra

International Ltd., an offshore company and Kotak Mahindra (UK)

Ltd., are all Subsidiaries of the Company.

The Company's public issue of 400000 16-17% Secured Redeemable

Non-Convertible Debentures of Rs.2500 each for cash at par

Aggregating Rs.100 cores in January.

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1997- In recognition of the Company's prudent funds management, CRISIL

has assigned a rating of AA+ to the Company's public issue of Non-

Convertible Debentures and P1+ for all short term borrowings Up to Rs.35000

lacks.

Kotak Mahindra Finance Ltd has decided to venture into health

Insurance business.

Kotak Mahindra Finance has launched a new consumer finance

product Called Kotak Mahindra K-Value.

Hamko is a 100 per cent subsidiary of KMFL and investment in it was

structured to avoid limitations of Section 372 under the Companies

Act.

- The company has diversified into various activities for which it has set up

subsidiaries including broking, capital market activities, Auto Finance, etc.

1998- Kotak Mahindra Asset Management Company Limited (KMAMCL)

launchedIts Mutual fund schemes in December.

- The Company it would launch its mutual fund with two schemes -- Kilt Unit

Scheme and K30 Unit Scheme.

Kotak Mahindra Finance is a joint venture with Goldman Sachs.

- The `FAA' (pronounced `F double A') rating assigned to the fixed

deposit programmed of Ford Credit Kotak Mahindra (FCKM) has been

reaffirmed.

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With the allotment to the Company of 50,000 equity shares of Rs. 10

Each by Kotak Mahindra Trustee Company Limited (KMTCL) on 12th

May.

2000- Kotak Mahindra Finance Ltd (KMFL) and Chubb Corporation of the

US have decided to call off their joint venture for entering the general

Insurance Business in India.

- The Company has decided to set up a venture capital fund with an Initial

corpus of Rs. 100 corer.

KMFL has set up a new asset reconstruction division to offer Recovery

Management services to players in the financial services industry.

- The Company Issue of 91,82,500 No. of Equity Shares of Rs. 10/- Each For

cash at a premium of Rs. 90/- per share aggregating Rs. 91,82,50,000 to the

Equity Shareholders of the Company on Rights basis in the ratio of one equity

share for every our equity shares held on 15th February.

Mr. K.K. Sheath has resigned effective from May 8.

Kotak Securities an affiliate of Kotak Mahindra Finance Ltd., has

Launched electronic broking services for retail investors.

Kotak Mahindra Finance is in talks with foreign insurers for a Joint

Venture in the life insurance business.

- The Company has proposed to start-up capital of Rs 150 corer in its life

insurance joint venture with Old Mutual, the UK based financial Services

group. - The Company proposes to make the necessary applications to the RBI

and the Insurance Regulatory and Development Authority for entering The

Life insurance business.

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OM Kotak Mahindra Life Insurance Company, the recently formed

joint venture company of Kotak Mahindra Finance and Old Mutual

Plc has filed its application for approve of life insurance license on 1st

September.

Kotak Mahindra Finance Ltd has been assigned In A rating (indicating

highest credit quality) for its Rs.510 million medium terms Borrowing

programmed.

Fitch India has assigned a rating of In AAA to the Rs. 51-crore

medium term borrowing program of Kotak Mahindra Finance Ltd for

High Credit quality and negligible risk factor.

- The Company recommended a swap ratio of 25 shares of KMFL for

every share of Pannier Trading which has a 75 per cent equity stake in

Kotak Securities.

The Bharat Petroleum Corporation Ltd (BPCL) has decided to part

ways with Kotak Mahindra, one of the leading domestic financial

services Company, in its convenient store venture In & Out.

2002-KMFL's business has seen a fast growth with the total disbursement of

commercial vehicle loan of the company in the last fiscal was Tuned to Rs.

250cr.

-RBI has given in-principle approval to Kotak Mahindra Finance Ltd to

convert itself into a bank, thereby becoming the first ever non-banking

Finance company converted into a bank.

-Mr. Uday Kotak says, there won't be any fresh capital infusion in the Bank in

the near future.

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-KMFL informed BSE the FITCH ratings assigned:

Fixed Deposit Programmed - In AAA

Non-Convertible Debenture - In AAA

-Mr. Ajay Sandi has been appointed as the Additional Director of Kotak

Mahindra Finance Ltd.

-Kotak Mahindra Finance Company has short listed I-flex solutions 'Flexi

cube' and 'Infuses', 'Finance' for its core banking solutions.

-KMFL has raised 76.22cr by selling securitized commercial vehicle Loans to

investors.

-CRISIL has assigned AAA (SO)' rating for Rs.83cr securitization

Programmed of Kotak Mahindra Finance Ltd.

-Mr. Uday Kotak. Has been appointed as the Executive Vice Chairman and

Managing Director of the company.

-Kotak. Mahindra Finance Ltd has mobilized Rs.104.89cr, asset-backed

Securitization Of commercial vehicle receivables.

-Business Standard and Business Standard digital have ceased to be the

subsidiaries Of Kotak Mahindra Finance Ltd.

-Mr. Jay ram and Mr. Deepak Gupta are appointed as whole time Directors on

the Board of Kotak Mahindra Finance Ltd.

2003 -Madison Communications has won the Rs.30cr Kotak Mahindra

media AOR account.

-The proposal of changing the name from 'Kotak Mahindra Finance Ltd 'to

'Kotak Mahindra Bank Ltd' and the proposal to change the Authorized capital

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from 100,00,00,000 divided into 10,00,00,000 equity shares of Rs.10 each has

been Approved by the Company shareholders.

-RBI has granted license to Kotak Mahindra Finance Ltd to embark on Its

Banking business.

-O & M has got the creative account of Kodak Mahindra Bank, and has said to

be working professionally.

-Kotak Mahindra Bank has received a lot of interest from portfolio Investors,

private Equity investors and potential strategic investors.

-Kotak Mahindra Bank has entered into an ATM sharing agreement with UTI

Bank, Which would allow KMB's customer free access to around 800 ATM's.

-Kotak Mahindra Bank has started its operations in New Delhi by inaugurating

a Branch Co naught place office.

-Dr.Shankar Acharya has been appointed as the Additional Director to The

Board of the bank.

-The Board of Kotak Mahindra Bank Ltd accepts the resignation of

Mr.S.A.A. Pinto and Mr. Punt as the Directors of the Bank.

-Kotak Mahindra Investment Co Ltd. PCC a subsidiary of Kotak. Mahindra

Capital Company Has constituted itself from a private company to a public

limited co. and has changed its name to 'Global Investment opportunities Fund

Ltd'.

-Kotak Mahindra bank has unveiled several home finance products options

which includes Home loan, Home equity Loan, Home loan transfer and Home

improvement loans.

--Kotak Mahindra Bank launches online remittance services called, FUNDS to

HOME For Non-resident Indians.

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-In response to the report cut by the RBI, the Kotak Mahindra Bank Has

reduced its Lending rates in home loans.

-Kotak Mahindra Bank Limited has informed that the equity shares of the

Bank have been demisted from the Delhi Stock Exchange Association Ltd

weve December 10, 2003.

2004 -Kotak Mahindra Bank Limited has informed that the Bank's equity

shares will be demisted from the stock exchange, Ahmadabad with Effect

from January 20, 2004.

-Kotak Mahindra Bank sets up branch in Surat.

-Kotak Mahindra Mutual Fund has launched Kotak Opportunities, an open-

ended equity growth scheme.

-Kotak Mahindra Bank inks pact with Reuters

2006- Kotak Mahindra joins hand HDFC Bank to share ATMs.

Kotak Mahindra Old Mutual Life

Insurance Limited

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between

Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc, a South African

savings and wealth management company established in 1845.

The Kotak Life Insurance product portfolio has a wide variety of insurance

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products. These include individual, group, and rural plans. It covers all

traditional insurance plans such as whole life, endowment, term, and money-

back plans. The insurer also has a comprehensive array of unit-linked plans

aimed at retirement planning.

KOTAK PRODUCT

Kotak Mahindra Life Insurance Ltd offers many type of insurance plans for

people. Kotak Mahindra believes in offering its customers a lifetime of value.

Kotak Life Insurance has a commitment to improve the quality of life of its

customers and employees. Here is provided full list of Kodak Life

InsurancePlans .

About Kotak Insurance:

The Kotak Life Insurance Ltd is one of Indias leading banking and financial

services organizations with offerings across personal financial services,

commercial banking, corporate and investment banking and markets, stock

broking, asset management and life insurance. Kotak Mahindra Old Mutual

Life Insurance is a 76:24 joint venture between Kotak Mahindra Group and

Old Mutual plc. Kotak Mahindra Life insurance is one of the fastest growing

insurance companies in India. Kotak Life Insurance employs around 5,565 people

in its various businesses and has 197 branches across 141 cities.

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Kotak Life Insurance Plans:

Kotak Mahindra Life Insurances main aim is to help customers take important

financial decisions at every stage in life. They are offering to the customers a wide

range of original life insurance product plans. They believe in offering life time

value for customers. Kotak Life Insurance Plans are also available on the official

site at kotaklifeinsurance.com. Below are given links to Kotak Life Insurance

plans,

Protection Plans:

Kotak Loan Protection Plan (Link)

Kotak Term/Preferred Term Plan (Link)

Kotak Eternal Life Plan (Link)

Retirement Plans:

Kotak Secure Retirement Plan (Link)

Kotak Retirement Income (Unit Linked) (Link)

Kotak Long Life Secure Plus (Link)

Kotak Long Life Wealth Plus (Link)

Kotak Retirement Income Plan (Link)

Savings & Investment Plans:

Kotak Platinum Advantage Plus (Link)

Kotak Smart Advantage Plan (Link)

Kotak Safe Investment Plan (Link)

Kotak Flexi Plan (Link)

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Kotak Platinum Advantage Plan (Link)

Kotak Easy Growth Plan (Link)

Kotak Capital Multiplier Plan (Link)

Kotak Money Back Plan (Link)

Kotak Endowment Plan (Link)

Kotak Premium Return Plan (Link)

Kotak Surakshit Jeevan Plan (Link)

Child Plans:

Kotak Headstart Child Plans (Link)

Kotak Child Advantage Plan (Link)

Group Plans:

Kotak Group Shield (Link)

RETIREMENTS PLAN

Kotak Personal Pension Plan

Today, you are busy climbing the ladder of success and realizing your dreams.

Today, time is with you. Just take a moment and think. Will you be able to

continue at the same pace? Will your income be the same forever? Will you be

able to live life on your own terms even after you retire? The HDFC Personal

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Pension Plan is a With Profits insurance policy that is designed to provide a

post-retirement income for life with the freedom to choose your retirement date.

Advantages

1. This plan is designed to provide you a post retirement income for life

You can choose your premium, the Sum Assured and your retirement date.

At the end of the policy term, you will receive the Sum Assured plus any

attaching bonuses, which will provide you a post retirement income in

your golden years

2. On your chosen retirement (Vesting) date, you will get the lump sum

comprising the Sum Assured plus any attaching bonus.

3. You can take up to 1/3rd of your Sum Assured as a tax free cash lump sum

4. The rest must be converted to annuity

5. You can buy the annuity from us or any other insurer For Regular

Premium Policy; you can choose to pay your premium as either Annually,

Half-Yearly or Quarterly depending on your convenience. You also have a

range of convenient auto premium payment options

6. Tax benefits under sections 80CCC of the Income Tax Act, 1961 subject

to the provisions contained.

Kotak Savings Plan

As a judicious family man, your priority is to secure the well-being of those who

depend on you. Not just for today, but also for the long term. With our Kotak Unit

Linked Endowment Plus you can start building your savings today and ensure that

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your family remains financially independent, even when you are not around. This

Unit Linked plan provides valuable protection to your family in case you are not

around and gives you with an outstanding investment opportunity to maximize

your savings by providing you a choice of thoroughly researched and selected

investments. This plan also gives regular Loyalty Units to boost your fund value

each

Advantages

1. This plan provides valuable protection to your family in case you are not

around. In case of your unfortunate demise during the policy term, we will

pay the greater of your Sum Assured (less any withdrawals you have made

in the two years before your claim) and your total fund value to your

family.

2. You can choose any one of 4 Additional Plan Benefit options depending

on your requirement:

Life Option = Death Benefit

Extra Life Option =Death Benefit + Accidental Death Benefit

3. You can choose to pay your premium as either Annually, Half-Yearly or

Monthly depending on your convenience. You also have a range of

convenient auto premium payment options

4. You can change your investment fund choices in two ways:

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5. Tax benefits are offered under section 80C and 10(10D) of the Income Tax

Act, 1961

Kotak Wealth Multiplier

Ideally, just how spending comes to you, so must saving and investing. You are

able to finance your expenses and take care of your family's needs in present

times. However, to ensure that family maintains the same standard of living in the

future, you need to make the right kind of investment today. HDFC Unit Linked

Wealth Multiplier, a unique 3-year premium payment Savings and Investment

Plan is a tailor made plan well suited to meet your long-term investment needs and

also help you maintain your familys financial independence.

Advantages

1. This plan offers an excellent investment opportunity through

choice of exclusive funds

2. 2This plan has limited premium payment term of 3 years

3. This plan also provides the facility of a single premium top - up

4. We have a Fund Management Charge (FMC) of 1.75% per

annum (of the fund's value)

5. You can change your investment fund choices in two ways:

Performance Highlight

Kotak Mahindra is one of India's leading financial organizations, offering a wide

range of financial services that encompass every sphere of life. From commercial

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banking, to stock broking, to mutual funds, to life insurance, to investment

banking, the group caters to the diverse financial needs of individuals and

corporate.

The group has a net worth of over Rs. 6,523 corers and has a distribution network

of branches, franchisees, representative offices and satellite offices across cities

and towns in India and offices in New York, London, San Francisco, Dubai,

Mauritius and Singapore. The Group services around 6.2 million customer

accounts.

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In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held by

Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak

Mahindra (FCKM) held by Kotak Group.

In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak

Capital and Kotak Securities.

Key group companies and their businesses

Kotak Mahindra Bank:

The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance Ltd

which was established in 1985, was converted into a bank- Kotak Mahindra Bank

Ltd in March 2003 becoming the first Indian company to convert into a Bank. Its

banking operations offer a central platform for customer relationships across the

group's various businesses. The bank has presence in Commercial Vehicles, Retail

Finance, Corporate Banking, Treasury and Housing Finance.

Kotak Mahindra Capital Company:

Kotak Mahindra Capital Company Limited (KMCC) is India's premier Investment

Bank. KMCC's core business areas include Equity Issuances, Mergers &

Acquisitions, Structured Finance and Advisory Services.

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Kotak Securities:

Kotak Securities Ltd. is one of India's largest brokerage and securities distribution

houses. Over the years, Kotak Securities has been one of the leading investment

broking houses catering to the needs of both institutional and non-institutional

investor categories with presence all over the country through franchisees and

coordinators. Kotak Securities Ltd. offers online (through

www.kotaksecurities.com) and offline services based on well-researched expertise

and financial products to non-institutional investors.

Kotak Mahindra Prime:

Kotak Mahindra Prime Limited (KMP) (formerly known as Kotak Mahindra

Primus Limited) has been formed with the objective of financing the retail and

wholesale trade of passenger and multi utility vehicles in India. KMP offers

customers retail finance for both new as well as used cars and wholesale finance

to dealers in the automobile trade. KMP continues to be among the leading car

finance companies in India.

Kotak Mahindra Asset Management

Company:

Kotak Mahindra Asset Management Company Kotak Mahindra Asset

Management Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the

asset manager for Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds

in excess of Rs 15,916 corer and offers schemes catering to investors with varying

risk-return profiles. It was the first fund house in the country to launch a dedicated

gilt scheme investing only in government securities.

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Kotak Mahindra Old Mutual Life Insurance

Limited:

Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between

Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps

customers to take important financial decisions at every stage in life by offering

them a wide range of innovative life insurance products, to make them financially

independent.

Kotak's International Business:

With a presence outside India since 1994, the international subsidiaries of Kotak

Mahindra Bank Ltd. operating through offices in London, New York, Dubai, San

Francisco, Singapore and Mauritius specialize in providing asset management

services to specialist overseas investors seeking to invest into India. The offerings

are differentiated India investment solutions that span all major asset classes

including listed equity, private equity and real estate. The subsidiaries also lead

manage and underwrite international issuances of securities. With its

commendable track record, large presence on the ground and a team of

dedicatedstaff in India, Kotaks international arm is suitably positioned for

managing assets in the Indian Capital markets.

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TOP COMPETITITORS OF KOTAK MAHINDRA LIFE INSRUANCE

o ICICI PRUDENTIAL LIFE INSURANCE

o LIFE INSURANCE CORPORATION (LIC)

o BAJAJ ALLIANZ INSURANCE

o BIRLA SUN LIFE INSURANCE

o SBI LIFE INSURANCE

o MAX NEW YORK LIFE INSURANCE

o RELIANCE LIFE INSURANCE

o BHARTI AXA LIFE INSURANCE

o HDFC STANDRED LIFE INSURANCE

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What is insurance?

Insurance is a back bone of a countrys risk management system. Risk is an

inherent part of our lives. The insurance providers offer a variety of products to

business and individuals in order to provide protection from risk and to insure

financial security. They are also an important component in the financial

intermediation chain for infrastructure and a long term projects. Through there

participation in financial markets, they also provide support in stabilizing the

markets evening out any fluctuations.

Life insurance companies which sells life insurance, annuities and

pension products

Non life or General insurance companies, which sell other type of

insurance.

Insurance in its basic form is defined as A contract between two parties whereby

one party called insurer undertakes in exchange for a fixed sum called premiums,

to pay the other party called insured a fixed amount of money on the happening of

a certain event."

In the most countries, life and non life insurers are subject to different regulatory

regimes and different tax and accounting rules. The main reason for the distinction

between the two types of company is that life, annuity and pension business is

very long term in nature coverage for life insurance or a pension can cover risk

over many decades. By contrast, non-life insurance usually covers a shorter

period, such as one year.

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In simple terms it is a contract between the person who buys Insurance and an

Insurance company who sold the Policy. By entering into contract the Insurance

Company agrees to pay the Policy holder or his family members a predetermined

sum of money in case of any unfortunate event for a predetermined fixed sum

payable which is in normal term called Insurance Premiums.

Insurance is basically a protection against a financial loss which can arise on the

happening of an unexpected event. Insurance companies collect premiums to

provide for this protection. By paying a very small sum of money a person can

safeguard himself and his family financially from an unfortunate event.

There are different kinds of Insurance Products available such as Life Insurance,

Vehicle Insurance, Home Insurance, Travel Insurance, Health or Medical

Insurance etc.

For Example if a person buys a Life Insurance Policy by paying a premium to the

Insurance company, the family members of insured person receive a fixed

compensation in case of any unfortunate event like death.

Brief History of Insurance

The story of insurance is probably as old as the story of mankind. The same

instinct that prompts modern businessmen today to secure themselves against loss

and disaster existed in primitive men also. They too sought to avert the evil

consequences of fire and flood and loss of life and were willing to make some sort

of sacrifice in order to achieve security. Though the concept of insurance is

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largely a development of the recent past, particularly after the industrial era past

few centuries yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818.

Oriental Life Insurance Company started by Europeans in Calcutta was the first

life insurance company on Indian Soil. All the insurance companies established

during that period were brought up with the purpose of looking after the needs of

European community and Indian natives were not being insured by these

companies. However, later with the efforts of eminent people like Babe Muttylal

Seal, the foreign life insurance companies started insuring Indian lives. But Indian

lives were being treated as sub-standard lives and heavy extra premiums were

being charged on them. Bombay Mutual Life Assurance Society heralded the birth

of first Indian life insurance company in the year 1870, and covered Indian lives at

normal rates. Starting as Indian enterprise with highly patriotic motives, insurance

companies came into existence to carry the message of insurance and social

security through insurance to various sectors of society. Bharat Insurance

Company (1896) was also one of such companies inspired by nationalism. The

Swadeshi movement of 1905-1907 gave rise to more insurance companies. The

United India in Madras, National Indian and National Insurance in Calcutta and

the Co-operative Assurance at Lahore were established in 1906. In 1907,

Hindustan Co-operative Insurance Company took its birth in one of the rooms of

the Jorasanko, house of the great poet Rabindra nath Tagore, in Calcutta. The

Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life)

were some of the companies established during the same period. Prior to 1912

India had no legislation to regulate insurance business. In the year 1912, the Life

Insurance Companies Act, and the Provident Fund Act were passed. The Life

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Insurance Companies Act, 1912 made it necessary that the premium rate tables

and periodical valuations of companies should be certified by an actuary. But the

Act discriminated between foreign and Indian Companies on many accounts,

putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 corer, it

rose to 176 companies with total business-in-force as Rs.298 corer in 1938.

During the mushrooming of insurance companies many financially unsound

concerns were also floated which failed miserably. The Insurance Act 1938 was

the first legislation governing not only life insurance but also non-life insurance to

provide strict state control over insurance business. The demand for

nationalization of life insurance industry was made repeatedly in the past but it

gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938

was introduced in the Legislative Assembly. However, it was much later on the

19th of January, 1956, that life insurance in India was nationalized. About 154

Indian insurance companies, 16 non-Indian companies and 75 provident were

operating in India at the time of nationalization. Nationalization was accomplished

in two stages; initially the management of the companies was taken over by means

of an Ordinance, and later, the ownership too by means of a comprehensive bill.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of

June 1956, and the Life Insurance Corporation of India was created on 1st

September, 1956, with the objective of spreading life insurance much more widely

and in particular to the rural areas with a view to reach all insurable persons in the

country, providing them adequate financial cover at a reasonable cost.

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LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from

its corporate office in the year 1956. Since life insurance contracts are long term

contracts and during the currency of the policy it requires a variety of services

need was felt in the later years to expand the operations and place a branch office

at each district headquarter. Re-organization of LIC took place and large numbers

of new branch offices were opened. As a result of re-organization servicing

functions were transferred to the branches, and branches were made accounting

units. It worked wonders with the performance of the corporation. It may be seen

that from about 200.00 cores of New Business in 1957 the corporation crossed

1000.00 cores only in the year 1969-70, and it took another 10 years for LIC to

cross 2000.00 corer mark of new business. But with re-organization happening in

the early eighties, by 1985-86 LIC had already crossed 7000.00 corers Sum

assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional

offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers

100 divisional offices and connects all the branches through a Metro Area

Network. LIC has tied up with some Banks and Service providers to offer on-line

premium collection facility in selected cities. LICs ECS and ATM premium

payment facility is an addition to customer convenience. Apart from on-line

Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmadabad,

Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pane and many other cities.

With a vision of providing easy access to its policyholders, LIC has launched its

SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and

closer to the customer. The digitalized records of the satellite offices will facilitate

anywhere servicing and many other conveniences in the future.

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LIC continues to be the dominant life insurer even in the liberalized scenario of

Indian insurance and is moving fast on a new growth trajectory surpassing its own

past records. LIC has issued over one corer policies during the current year. It has

crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,

posting a healthy growth rate of 16.67% over the corresponding period of the

previous year.

From then to now, LIC has crossed many milestones and has set unprecedented

performance records in various aspects of life insurance business. The same

motives which inspired our forefathers to bring insurance into existence in this

country inspire us at LIC to take this message of protection to light the lamps of

security in as many homes as possible and to help the people in providing security

to their families.

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on

Indian soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance

company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to

collect statistical information about both life and non-life insurance businesses.

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1938: Earlier legislation consolidated and amended to by the Insurance Act with

the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by

the central government and nationalized. LIC formed by an Act of Parliament, viz.

LIC Act, 1956, with a capital contribution of Rs. 5 corer from the Government of

India.

The General insurance business in India, on the other hand, can trace its roots to

the Triton Insurance Company Ltd., the first general insurance company

established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact

all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized

the general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companys viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the

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Oriental Insurance Company Ltd. and the United India Insurance Company Ltd.

GIC incorporated as a company.

WHY INSURNACE IN INDIA

We live in the information age. People are becoming more aware of the

importance of insurance in their life. However, there is a paradox in the form of a

growing need to educate people to buy insurance.

Today, natural disasters on a large scale occur regularly and even terrorism is

increasing day by day. Specialized software is used in actuarial science to

accurately predict life expectancy and mortality. But natural disasters are difficult

to predict.

This has highlighted to the world that insurance is a basic and fundamental need

for the safety and security of the family. Only a larger insurance cover can

guarantee a better future.

However insurance claims for natural disasters are very low. This is because

insurance coverage was too low, and those who really needed insurance had not

taken it. There is the need to push insurance as a social responsibility for those

who really need it.

ABOUT INSURANCE REGULATORY

DEVELOPMENT AUTHORITY

The government of India opened the insurance sector to the private players on

October 24, 2000, thus unraveling a new chapter in this field. This new policy of

GOI is an outcome of Indias policy of liberalization and also the result of its

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obligation to the WTO to confirm to its principles and guidelines relating to the

reduction of barriers to trade in services.

The insurance returns committee under chairmanship of R.N. Malhotra in its

April, 1993 report suggested reforms in the insurance sector including

improvements in the functioning of LIC, GIC, liberalizing and developing a

strengthening the regulatory system. The committee submitted its report o

07.01.1994 to Union Finance Minister. The bill was passed regarding this in 1998.

Finally Regulatory and Development authority (IRDA) gained statutory in April

2000.

LIBERALIZTION OF INSURANCE SECTOR

Liberalization commitment of the country to help in disciplining future economic

policies will include the insurance reforms. When world over insurance market

has been open up, Indian market cannot remain in isolation. History has shown

that it is very difficult for a country to remain in isolation.

Globalization is the new economic reality, which is here to stay, heralding a new

area of insurance in India

With the opening of the insurance industry, India stands to gain with the following

major advantages.

1. Globalization will provide opportunities to the customers

2. Better production with more reasonable and affordable prices.

3. The customer will get better services

4. It will enhance the saving rate

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5. Long term funds for infrastructure development will be available to the

country.

Insurance Types

1. Auto Insurance

2. Dental Insurance

3. Home Insurance

4. Travel Insurance

5. Medical Insurance

6. General Insurance

7. Renters Insurance

8. Life Insurance

9. Disability Insurance

10. Term Insurance

11. Insurance Marketing

12. Farmer Insurance

OBJECTIVES OF LIC

1. Spread Life Insurance widely and in particular to the rural areas

and to the socially and economically backward classes with a view

to reaching all insurable persons in the country and providing them

adequate financial cover against death at a reasonable cost.

2. Maximize mobilization of people's savings by making insurance-

linked savings adequately attractive.

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3. Bear in mind, in the investment of funds, the primary obligation to

its policyholders, whose money it holds in trust, without losing

sight of the interest of the community as a whole; the funds to be

deployed to the best advantage of the investors as well as the

community as a whole, keeping in view national priorities and

obligations of attractive return.

4. Conduct business with utmost economy and with the full

realization that the moneys belong to the policyholders.

5. Act as trustees of the insured public in their individual and

collective capacities.

6. Meet the various life insurance needs of the community that would

arise in the changing social and economic environment.

7. Involve all people working in the Corporation to the best of their

capability in furthering the interests of the insured public by

providing efficient service with courtesy.

8. Promote amongst all agents and employees of the Corporation a

sense of participation, pride and job satisfaction through discharge

of their duties with dedication towards achievement of Corporate

Objective

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OPPORTUNITIES

Recent experience has shown that whenever an company has been thrown

open to competition, the size of the market has grown and the existing players

have retained nearly 40% of the market share. The size of insurance population

in India is indeed vast and the existing players have manage to cover about one-

fourth of it. The opportunities before the players are therefore aplenty in terms

of target audience.

Company has today become a mainstay of any market economy since its

offers plenty of scope of garnering large sums of money for long period of time.

a well regulated life which moves with times by offering its customers tailor

made product to satisfy their financial need is, therefore , essential if we desire

to progress towards a worry free future.

OUR VALUES

Values that we observe while we work:

Integrity

Innovation

Customer centric

People Care One for all and all for one

Team work

Joy and Simplicity

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MISSION/VISION

Mission

"Explore and enhance the quality of life of people through financial security by

providing products and services of aspired attributes with competitive returns, and

by rendering resources for economic development."

Vision

"A trans-nationally competitive financial conglomerate of significance to societies

and Pride of India."

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ULIPs: An Introduction

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Most importantly, what are ULIPs? Here, we will find all the information you

need to set your mind

Unit Linked Fund is a pool of the premiums paid by the policyholderULIPs are a

category of goal-based financial solutions that combine the safety of insurance

protection with wealth creation opportunities. In ULIPs, a part of the investment

goes towards providing you life cover. The residual portion of the ULIP is

invested in a fund which in turn invests in stocks or bonds; the value of

investments alters with the performance errs which is invested in a portfolio of

assets to achieve the fund(s) objective. The price of each unit in a fund depends on

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how the investments in the fund would perform. The fund is managed by the

insurance companies.

A Unit stands for a portion or a part of the underlying segregated unit linked

Fund. Investment returns from ULIP may not be guaranteed. In unit linked

products/policies, the investment risk in investment portfolio is borne by the

policy holder. Depending upon the performance of the unit linked fund(s)

chosen; the policy holder may achieve gains or losses on his/her investments. It

should also be noted that the past returns of a fund are not necessarily indicative

of the future performance of the fund.

Working of ULIPs

It is critical that you understand how your money gets invested once you purchase

a ULIP:

When you decide the amount of premium to be paid and the amount of life cover

you want from the ULIP, the insurer deducts some portion of the ULIP premium

upfront. This portion is known as the Premium Allocation charge, and varies from

product to product. The rest of the premium is invested in the fund or mixture of

funds chosen by you. Mortality charges and ULIP administration charges are

thereafter deducted on a periodic (mostly monthly) basis by cancellation of units,

whereas the ULIP fund management charges are adjusted from NAV on a daily

basis.

Since the fund of your choice has an underlying investment either in equity or

debt or a combination of the two your fund value will reflect the performance of

the underlying asset classes. At the time of maturity of your plan, you are entitled

to receive the fund value as at the time of maturity. The pie-chart below illustrates

the split of your ULIP premium:

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Types of ULIPs

One of the big advantages that a ULIP offers is that whatever be your specific

financial objective, chances are that there is a ULIP which is just right for you.

The figure below gives a general guide to the different goals that people have at

various age-groups and thus, various life-stages.

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Depending on your specific life-stage and the corresponding goal, there is a ULIP

which can help you plan for it.

Let us take an example of Gaurav & Hari. Both of them want to retire at the age of

60. Gaurav starts investing Rs. 10,000 every year from the age of 25 till the time

that he retires. In all, he would have invested Rs. 350,000. If his investments were

to earn 7% return every year, at the time of his retirement, Gaurav will have a

retirement corpus of Rs. 13, 82,368.

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Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to

make up for the lost time, invests Rs.15, 000 every year (which is 50% more than

Guairs annual investment). So, by the time of his retirement, he would have

invested Rs. 3, 75,000. And assuming the same annual return of 7%, he will end

up with a retirement corpus of Rs 9, 48,735.

ULIPS FOR LONG TERM WEALTH

CREATION

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ULIPs are the right insurance solutions for you if you are looking for a strong

wealth creation proposition allied to a core insurance benefit. Such plans are ideal

for people who are in their late 20s and early 30s and by investing in such a plan

get the flexibility of using it to fund any of their long-term financial goals such as

purchase of a house or funding their childrens education. The added element of

life cover serves to make these plans a wholesome financial investment option.

Wealth Creation ULIPs can be primarily classified as :

Single premium - Regular premium plan :

Depending upon you needs & premium paying capacity you can either opt

for a single premium plan where you need to pay premium only once

during the term of entire policy or regular premium plans where you can

premium at a frequency chosen by you depending upon your convenience

Guarantee plans None guarantee plans:

Today there is wealth creation ULIPS which also offer guaranteed benefit.

These plans are ideal insurance-cum-investment option for customers who

want to enjoy the potentially higher returns (over the long term) of a

market linked instrument, but without taking any market risk. On the other

hand non guarantee plans comes with an in - built range of fund options to

choose from ranging from aggressive funds (Primarily invested in

equities with the general aim of capital appreciation) to conservative funds

(invested in cash, bank deposits and money market instruments with aim

of capital preservation) so that you can decide to invest your money in line

with your market outlook, time horizon and your investment preferences

and needs.

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Life Stage based Non life Stage based

Life Stage based ULIPs factor in the fact that your priorities differ at

different life stages & hence distribute your money across equity & debt.

Here the initial allocation is decided as per your age since age is a

significant indicator of risk appetite. Such a strategy ensures that the asset

allocation at all times is in sync with your age and changing financial

needs.

ULIPs for children education plan:

One of the most important responsibilities you have as a parent is to ensure that

your child gets the best possible education that can be provided. Apart from

conventional schooling, it becomes important to expose your child to different

activities such as dance, painting and sports training for holistic development. As

a parent, you want to ensure that their development is not hampered either due to

rising costs or unforeseen circumstances.

Today there are ULIPs that offer money at key milestones of your child's

education thus ensuring that your childs education continues unhampered even if

something unfortunate happens to you. While, the death of a parent is an

irreparable emotional loss, child education plans against the financial

ramifications of the death of a parent.

Apart from above mentioned benefit, child plans also offers below mentioned

features.

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Flexibility of adding on various riders like Income benefit rider, disability rider

etc to get additional benefits .For e.g. In case of income benefit rider, In the event

of the death of the parent, the child will receive a regular pre-determined amount

every year to meet the educational expenses.

In case of unfortunate incidence of the death of a parent, not only will the child

receive the sum assured immediately but will also continue to receive money at

the key educational milestones.

ULIPs for health Education:

When you are young and working you save for various goals like marriage,

education, retirement etc. but saving for health care is never considered or left for

later. During these years we have various sources of income or savings on which

we can rely for health emergencies.

But with increasing cost of healthcare, proportion of this spend is increasing at an

alarming pace. This is forcing families to borrow or sell assets to meet expenses

during medical emergencies. And during old age health care expenses increase

due to health deterioration because of age and higher incidence of chronic illness.

Thus it is important for you to invest in health insurance today so that tomorrow

you are fully prepared to meet rising healthcare expenses, which would be

incurred during old age, with the right health insurance plan.

Health ULIP is a recent innovation from the health insurance industry. In a health

ULIP part of your premiums are allocated for investment designed specifically to

build a health fund to meet future health related expenses. It aims to create a

health savings kitty by investing in a long term flexible savings plan with multiple

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fund options. The health fund thus created allows you to claim for health related

expenses of any kind and also fund your future health insurance charges. You can

also avail of tax benefit on premium paid u/s 80D.

When ULIP work best?

Whether you are in the process of deciding which ULIP to invest in; or whether

you already have a unit linked insurance policy to secure your important financial

goals there are some key principles which should govern any decision related to

ULIPs. Adhering to these key principles will allow you to make optimum

utilization of your ULIP.

CHARGE STRUCTURE

Unit-Linked Insurance Plans (ULIPs)are designed to meet two of your most

important financial needs: protection and investment. Both these benefits have

some charges attached to them; important charges to know about before

purchasing a ULIP are:

1. Premium Allocation charge

2. Policy Administration charge

3. Mortality charge

4. Fund Management charge

Premium Allocation Charge:

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A percentage of the premium is appropriated towards charges initial and renewal

expenses apart from commission expenses before allocating the units under the

policy.

Mortalitys:

These are charges for the cost of insurance coverage and depend on number of

factors such as age, amount of coverage, state of health etc.

Fund Management Fees:

Fees levied for management of the fund and are deducted before arriving at the

NAV.

Administration Charges:

This is the charge for administration of the plan and is levied by cancellation of

units.

Surrender Charges:

Deducted for premature partial or full encashment of units.

Fund Switching Charge:

Usually a limited number of fund switches are allowed each year without charge,

with subsequent switches, subject to a charge.

Service Tax Deductions:

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Service tax is deducted from the risk portion of the premium.

The important thing to note about ULIPs is that the overall charge structure

in the long term comes down substantially, thus allowing greater allocation of

premium to your chosen fund, thereby leading to wealth creation. It may be

noted that insurers have the right to revise the fees and charges over a period

of time.

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MUTUAL FUND CONCEPT:

A Mutual Fund is a trust that pools the savings of a number of investors who share

a common financial goal. The money thus collected is then invested in capital

market instruments such as shares, debentures and other securities. The income

earned through these investments and the capital appreciation realized is shared by

its unit holders in proportion to the number of units owned by them. Thus a

Mutual Fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed basket of securities

at a relatively low cost. The flow chart below describes broadly the working of a

mutual fund:

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ORGANASITION OF MUTUL FUND

ORGANASITION OF MUTUL FUND:

There are many entities involved the diagram below illustrates the organization set

of a mutual fund.

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The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the Government of India and Reserve Bank of India.

The history of mutual funds in India can be broadly divided into four distinct

phases.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was

set up by the Reserve Bank of India and functioned under the Regulatory and

administrative control of the Reserve Bank of India. In 1978 UTI was de-linked

from the RBI and the Industrial Development Bank of India (IDBI) took over the

regulatory and administrative control in place of RBI. The first scheme launched

by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 cores of

assets under management.

Second Phase 1987-1993 (Entry of Public

Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public

sector banks and Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund

established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab

National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank

of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

mutual fund in June 1989 while GIC had set up its mutual fund in December

1990.

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At the end of 1993, the mutual fund industry had assets under management of

Rs.47, 004 cores.

Third Phase 1993-2003 (Entry of Private

Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian

mutual fund industry, giving the Indian investors a wider choice of fund families.

Also, 1993 was the year in which the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered and

governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)

was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual

funds setting up funds in India and also the industry has witnessed several mergers

and acquisitions. As at the end of January 2003, there were 33 mutual funds with

Total assets of Rs. 1, 21,805 corers. The Unit Trust of India with Rs.44, 541

corers of assets under management was way ahead of other mutual funds

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI

was bifurcated into two separate entities. One is the Specified Undertaking of the

Unit Trust of India with assets under management of Rs.29, 835 corers as at the

end of January 2003, representing broadly, the assets of US 64 scheme, assured

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return and certain other schemes. The Specified Undertaking of Unit Trust of

India, functioning under an administrator and under the rules framed by

Government of India and does not come under the purview of the Mutual Fund

Regulations

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000

corers of assets under management and with the setting up of a UTI Mutual Fund,

conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking

place among different private sector funds, the mutual fund industry has entered

its current phase of consolidation and growth

The graph indicates the growth of assets over the years

Note:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified

Undertaking of the Unit Trust of India effective from February 2003. The Assets

under management of the Specified Undertaking of the Unit Trust of India has

therefore been excluded from the total assets of the industry as a whole from

February 2003 onwards.

ADVANTAGES OF MUTUAL FUNDS:

The advantages of investing in a Mutual Fund are:

1. Professional Management

2. Diversification

3. Convenient Administration

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4. Return Potential

5. Low Costs

6. Liquidity

7. Transparency

8. Flexibility

9. Choice of schemes

10. Tax benefits

11. Well regulated

TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as

financial position, risk tolerance and return expectations etc. The table below

gives an overview into the existing types of schemes in the industry.

FREQUENTLY USED TERMS

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its

liabilities. The per unit NAV is the net asset value of the scheme divided by the

number of units outstanding on the Valuation Date

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Sale Price

Is the price you pay when you invest in a scheme? Also called Offer Price. It may

include a sales load.

Repurchase Price

Is the price at which units under open-ended schemes are repurchased by the

Mutual Fund? Such prices are NAV related.

Redemption PriceIs the price at which close-ended schemes redeem their units on maturity? Such

prices are NAV related

Sales Load

Is a charge collected by a scheme when it sells the units? Also called, Front-end

load. Schemesthat do not charge a load are called No Load schemes.

Repurchase or Back-end Load

Is a charge collected by a scheme when it buys back the units from the unit

holders?

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MARKET SHARE POSITION OF KOTAK

MAHINDRA LIFE INSURANCE

FINANCIAL RESULTS

Financials for the year ended March 31, 2009

For the year ended March 31, 2009, kotaks profit before considering profit on

sale ofinvestments and exceptional items and tax stood at Rs. 3,193.81 crores as

compared to Rs. 2,603.98 crores for the previous year. After providing Rs. 934.98

crores for taxes, the net profit after tax for the year ended March 31, 2009

increased by 23% to Rs. 2,258.83 crores as compared with Rs. 1,834.55 crores in

the previous year.

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RESEARCH METHODOLOGY

Research Design:

Research is a scientific and systematic search for relevant information on specific

topic.

Research is an art of scientific investigation.

In my project I will used Analytical Research Design &Applied Research

Design.

Analytical Research

The research has use facts or information already available and analyses these to

may a Critical evaluation of the material.

Applied Research

Its aim had finding a solution for an immediate problem facing to society or an

industry business organization.

OBJECTIVE

To Study awareness of insurance among the respondents

To study company awareness or top of mind recall by respondents

over all study of marketing payment process

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Types of study:

The Study at ULIPs vs. mutual fund is a combination of analytical and practical

study .It is based on data collected from records of the company and is administer

to various departmental heads connected with fund management.

Collecting the Data

For proper conducting at the research it because necessary to collect data that are

appropriate by observation which are as follows-

1. Through personal interview

2. Through telephonic interview

3. Through Questioner-

I-Through personal interview-

Meeting to customer self and personally.

II-Through telephonic interview-

Meeting the customer on telephone.

III-Through Questioner-

Filled questioner by the Customer.

Types of data:

Primary data:

This Data Was Collected from Discussions and Interaction with Respective

customer

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Secondary data:

This data was collected through various newsletters, publications through

researches in the fields of funds management, journals magazine reports and

consolidated records from books and net.

Sampling plan:

The Sampling Universe Consisted Of Various Mutual Funds And Their Returns.

Sample size:In my study I have taken 50 Sample size, these are my respected customer & some

are Government employees .The quality of my sample size Are-

1. I-Their age is 30-40.

2. II-Their Income are above 20,000.

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LIMITATIONS OF THE STUDY

Although this training project has been completed successfully but. I feel that

project had to face certain limitations. They are:

SHORTAGE OF TIME:

If this training program would be 2 months then I could have learnt things and

make project more effectively and could have included other important things

like case study and survey report.

LIMITATIONS OF CONFIDENTIALITY:

I could get many information regarding subject matter of project but sill there

were some norms and practicalities which were confidential to bank and even if I

know those things. I am bound not to disclose those The things in my project

report.

PROBLEMS OF RESPONSE FROM CUSTOMER:

respondent does not give adequate time to give well thought out answer. They

are hesitant to give their details because of fear of leak of their personal

information

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SCOPE OF THE STUDY

The Project undertaken in kotak mahindra life has scope in following ways:

Information related to awareness of kotak products

Actual information about the satisfaction level of customers that

can be used in investigating any kind of dissatisfaction among

customers.

To cope up with any competition from the various company, by

increased customer satisfaction

To provide the relevant information to the eminent scholars,

investors and policy holders.

With the recent of many players in the field the idea now is to

change peoples perception and seep into their mindset sensitivity and

rationality association.

Apart from LIC, which enjoys the biggest share in life insurance.

The recent entry of many privates in the field facing the challenge of

how to protect themselves as being different when everyone has a single

preposition.

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OBJECTIVE OF THE STUDY

To know the awareness about the various company Insurance

product.

To find out what policies kotak mahindra life insurance is

providing.

To understand the functioning of the company.

To analyze the problem in marketing of insurance

To formulate have to overcome from these problems.

To understand the consumer behavior regarding purchase of

insurance.

To analyses the future and current market of insurance.

To analyze the purchasing level of the insurance.

To study the satisfaction level of customers with the work

performance of the company.

To know the idea of the customers that how much they are ready

to invest for insurance

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INVESTMENT BEHAVIOUR ULIP vs.

MUTUL FUND

Investment behavior

Investment behavior is make by to words investment + behavior Investment

means invest the money in other origination & other plants which maximize your

wealth in future.Behavior means why we didnt invest our money ten what is your

objective it shows our behavior.

Investment behavior means purpose of money when we investment then what are

our objective & which investment plants we have it full fill our long term means

our short term needs. It shows investment behavior is depending always our

needs. . Target patients made more advantageous decisions and ultimately earned

more money from their investments than the normal participants and control

patients. When normal participants and control patients either won or lost money

on an investment round, they adopted a conservative strategy and became more

reluctant to invest on the subsequent round; these results suggest that they were

more affected than target patients by the outcomes of decisions made in the

previousrounds.Unit Linked Insurance Policies (ULIPs) as an investment avenue

are closest to mutual funds in terms of their structure and functioning. As is the

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case with mutual funds, investors in ULIPs are allotted units by the insurance

company and a net asset value (NAV) is declared for the same on a daily basis.

Similarly ULIP investors have the option of investing across various schemes

similar to the ones found in the mutual funds domain, i.e. diversified equity

funds, balanced funds and debt funds to name a few. Generally speaking, ULIPs

can be termed as mutual fund schemes with an insurance component.However it

should not be construed that barring the insurance element there is nothing dif1.

1. Mode of investment/ investment amounts

Mutual fund investors have the option of either making lump sum investments or

investing using the systematic investment plan (SIP) route which entails

commitments over longer time horizons. The minimum investment amounts are

laid out by the fund house.

ULIP investors also have the choice of investing in a lump sum (single premium)

or using the conventional route, i.e. making premium payments on an annual,

half-yearly, quarterly or monthly basis. In ULIPs, determining the premium paid

is often the starting point for the investment activity.

This is in stark contrast to conventional insurance plans where the sum assured is

the starting point and premiums to be paid are determined thereafter.

ULIP investors also have the flexibility to alter the premium amounts during the

policy's tenure. For example an individual with access to surplus funds can

enhance the contribution thereby ensuring that his surplus funds are gainfully

invested; conversely an individual faced with a liquidity crunch has the option of

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paying a lower amount (the difference being adjusted in the accumulated value of

his ULIP). The freedom to modify premium payments at one's convenience

clearly gives ULIP investors an edge over their mutual fund counterparts.

2. Expenses

In mutual fund investments, expenses charged for various activities like fund

management, sales and marketing, administration among others are subject to

pre-determined upper limits as prescribed by the Securities and Exchange Board

of India.

For example equity-oriented funds can charge their investors a maximum of 2.5%

per annum on a recurring basis for all their expenses; any expense above the

prescribed limit is borne by the fund house and not the investors.

Similarly funds also charge their investors entry and exit loads (in most cases,

either is applicable). Entry loads are charged at the timing of making an

investment while the exit load is charged at the time of sale.

Insurance companies have a free hand in levying expenses on their ULIP

products with no upper limits being prescribed by the regulator, i.e. the Insurance

Regulatory and Development Authority. This explains the complex and at times

'unwieldy' expense structures on ULIP offerings. The only restraint placed is that

insurers are required to notify the regulator of all the expenses that will be

charged on their ULIP offerings.

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Expenses can have far-reaching consequences

investment behaviour on

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