life insurance report

8/8/2019 Life Insurance Report

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A

REPORT

ON

Insurance Industry

AT

SECURE YOUR DREAM TODAY.

SUBMITTED TO SUBMITTED BY

Prof .Jyotsna Arya Abhishekh Rungta

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CONTENT

S.NO. TOPICS PAGE NO.

1 Insurance Industry 3

2 Effect of Globalization, privatization & Liberalization 7

3 Current trends & Market Scenario 10

4 Company Analysis 12

5 Background 12

6 Promoters 12

7 Market Scenario 13

8 Range of products 14

9 Policy offered 14

10 Future Plans 24

11 Why Life Insurance 25

12 Product analysis 27

13 SWOT Analysis 29

14 Pricing 30

15 Suggestion 30

16 Recommendations 32

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History of Life Insurance in India

Life Insurance in its present form came to India from United Kingdom (UK)

with the establishment of the British firm, ORIENTAL LIFE INSURANCE CO. in

Calcutta in 1818, followed by Bombay Life Insurance Co. in 1823; Madras

Equitable Life Insurance Society in 1829 & Oriental Government Security Life

Insurance Co. in 1874. Prior to 1871, Indian lives were treated substandard

& charged an extra premium of 15 20 %. Bombay Mutual Life assurance

Society, an Indian insurer, which came into existence in 1871, was the first

one to cover Indian lives at standard rates.

Later in 1928, the Indian Insurance Companies Act was enacted to enable

the government to collect statistical information about both life & non life

insurance business transacted in India by the foreign & Indian insurers,

including the provident insurance societies. BY 1956, 154 Indian insurers, 16

non-Indian insurers & 75 provident societies were carrying on life insurance

business in India. was taken over by the Central Government & then

nationalized on 1st September 1956, when the LIFE INSURANCE

CORPORATION came into existence.

Insurance in India can be traced back to the Vedas. For instance,

yogakshema, the name of Life Insurance Corporation of India's corporate

headquarters, is derived from the Rig Veda. The term suggests that a form of

"community insurance" was prevalent around 1000 BC and practiced by the

Aryans. It was during the Swedishi movement in the early 20th century that

insurance witnessed a big boom in India with several more companies beingset up.

As these companies grew, the government began to exercise control on

them. The Insurance Act was passed in 1912, followed by a detailed and

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amended Insurance Act of 1938 that looked into investments, expenditure

and management of these companies' funds.

By the mid-1950s, there were around 170 insurance companies and 80

provident fund societies in the country's life insurance scene. However, in

the absence of regulatory systems, scams and irregularities were almost away of life at most of these companies.

As a result, the government decided nationalizes the life assurance business

in India. The Life Insurance Corporation of India was set up in 1956 to take

over around 250 life companies.

When IRDA came into the Existence:-

Life Insurance in India was nationalized by incorporating Life Insurance

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

were taken over by LIC.

In 1993 the Government of Republic of India appointed RN Malhotra

Committee to lay down a road map for privatization of the life insurance

sector.

While the committee submitted its report in 1994, it took another six years

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

amending the Insurance Act of 1938 and legislating the Insurance Regulatory

and Development Authority Act of 2000.The same year that the newly

appointed insurance regulator - Insurance Regulatory and Development

Authority IRDA -- started issuing licenses to private life insurers.

The Insurance sector in India has gone through a number of phases and

changes, particularly in the recent years when the Govt. of India in 1999

opened up the insurance sector by allowing private companies to solicit

insurance and also allowing FDI up to 26%.Life and general insurance in Indiais still a nascent sector with huge potential for various global players with the

life insurance premiums accounting to 2.5% of the country's GDP while

general insurance premiums to 0.65% of India's GDP

As per the current (Mar 06) FDI norms, foreign participation in an Indian

insurance company is restricted to 26.0% of its equity / ordinary share

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capital. The Union Budget for fiscal 2005 had recommended that the ceiling

on foreign holding be increased to 49.0%.

Registered Life Insurance Companies India

S.No.

RegistrationNumber

Date ofReg.

Name of the Company

1 101 23.10.2000

HDFC Standard Life Insurance CompanyLtd.

2 104 15.11.2000

Max New York Life Insurance Co. Ltd.

3 105 24.11.2000

ICICI Prudential Life Insurance CompanyLtd.

4 107 10.01.2001

Kotak Mahindra Old Mutual Life InsuranceLimited

5 109 31.01.2001

Birla Sun Life Insurance Company Ltd.

6 110 12.02.2001

Tata AIG Life Insurance Company Ltd.

7 111 30.03.2001

SBI Life Insurance Company Limited .

8 114 02.08.2001

ING Vysya Life Insurance Company PrivateLimited

9 116 03.08.2001

Bajaj Allianz Life Insurance CompanyLimited

10 117 06.08.2001

Metlife India Insurance Company Pvt. Ltd.

11 133 04.09.20 Future Generali India Life Insurance

5
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omkotakmahindra.com/http://www.omkotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig-life.com/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.co.in/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.omkotakmahindra.com/http://www.omkotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig-life.com/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.allianzbajaj.co.in/http://www.metlife.co.in/


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07 Company Limited

List of Life Insurers (as of Sept, 2006)

Apart from Life Insurance Corporation, the public sector life insurer, there are14 other private sector life insurers, most of them joint ventures betweenIndian groups and global insurance giants.

Life Insurer in Public Sector

1. Life Insurance Corporation of India

Life Insurers in Private Sector

1. Bajaj Allianz Life2. Tata AIG Life3. ICICI Prudential Life Insurance4. HDFC Standard Life5. Birla Sunlife6. SBI Life Insurance7. Kotak Mahindra Old Mutual Life Insurance8. Aviva Life Insurance9. Reliance Life Insurance Company Limited10.MetLife India Life Insurance11. ING Vysya Life Insurance

12. Max Newyork Life Insurance13. Sahara Life Insurance - Now they are not into business14. Shriram Life Insurance15. Bharti AXA Life Insurance Co Ltd

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Effect of Globalization, Liberalization, Privatization

Has globalization helped or hurt the insurance industry?

"Globalization has provided a host of benefits for the life insurance industry,"

says Benanav. "Over the years weve seen a dramatic increase in

professionalism throughout the industry as companies apply best practices

developed by innovators in one market to other markets around the world.

This also applies to the regulatory environment as regulators share their

expertise across borders, creating a more uniform regulatory environment

that ultimately benefits both consumers and the industry as a whole. Another

area in which globalization has helped the life insurance industry is by

allowing the freer flow of managerial talent across borders. Companies like

New York Life are moving smart managers from one market to another,

wherever their talents may be needed in the organization. This helps

broaden the horizons not only of each company but also of the entire

industry itself.

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What effect does globalization have on local-national insurers in

emerging markets?

Some people believe its positive: "When foreign insurers like New York Life

enter a market that had formerly been closed, they bring with them world-

class product development and marketing standards that significantly raisethe awareness of consumers. This heightened awareness helps educate

consumers to the benefits of life insurance, increasing demand throughout

the market, benefiting foreign and domestic insurers alike.

Effects of Liberalization and Deregulation on Efficiency

This shows the effects of liberalization and deregulation on the efficiency of

life insurers in selected Asian life insurance markets. As used in this study,

liberalization denotes a reduction of barriers to market access, and

deregulation denotes a lessening of national regulation. Indian deregulation

followed liberalization by a discernable period (four years) whereas Philippine

deregulation occurred concurrently with liberalization. In neither instance

could these deregulation efforts be characterized as substantial.

Nonetheless, these two markets can be contrasted with those of Taiwan and

Thailand which undertook virtually no deregulation during the study period.

Liberalization and deregulation of the Indian life insurance markets were

associated with increases and improvements in total efficiency. The evidence

suggests that liberalization and deregulation of the Philippine life insurance

market were effective in accelerating a shift of the production frontier and in

narrowing the gap between the costs of the average firm and those of the

best -practice life insurers. This finding implies that a small group of best-practice firms was gaining efficiency and that the average firm responded to

a more competitive market by emphasizing cost saving. In addition,

liberalization/deregulation seems to have stimulated scale economies. The

positive consequences of these government changes are associated with a

convergence of Philippine life insurers operation toward the long-run optimal

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scale. The evidence also suggests that liberalization/deregulation generated

impressive productivity growth for Philippine life insurers.

Effect of Privatization

In fact, it's in recognition of the huge potential of the market and the need to

make insurance, particularly life insurance, available on a wider scale, that

the government opened the industry to private players.

Today, the Indian life insurance industry has a dozen private players, each of

which are making strides in raising awareness levels, introducing innovative

products and increasing the penetration of life insurance in the vastly

underinsured country. Each of the private insurers bas introduced revamped

products to meet the needs of their target customers and in line with their

business objectives. Some insurers are pursuing a mission to be a scale

player in the mass market by introducing a wide range of products to meet

the need of each customer. Others have taken a more focused approach,

introducing select products that hold potential and fill market gaps.

Whatever the case may be, each life insurer has approached the

category with a fresh perspective.

So, how successful have these efforts been? The results are noteworthy. The

number of new policies issued has gone from a little less than 1.7 crore in

1999-2000 to over 2.3 crore in the last year. More heartening is that

premiums from new business written by life insurers have nearly

quadrupled, from pre- privatization days of about Rs 4,000 crore in

1999-00 to over Rs 15,000 crore in 2001-02. These numbers clearly

indicate that not only is life insurance growing rapidly, but that the new

customers are insuring themselves for greater amount, possibly closer to

what their actual insurance and protection needs are.

A large part of the success of the new entrants ran be attributed to the

government appointed Insurance Regulatory and Development Agency

(IRDA), which developed the regulatory framework. The regulations

governing the life and non-life insurers are pragmatic and forward -looking,

ensuring the customer is protected and creating an environment for thriving

private sector participation and a level playing field.

Undoubtedly, the largest beneficiaries of privatization have been the

customers, who now have an array of policies to choose from, a number of

channels to approach insurers through, levels of customer service so far

unseen in this industry, and more information about their investments than

ever before. Encouraging as these trends may seem, they are just the tip of

the iceberg. Consumer awareness, though increasing, is still low and the

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different types of policies available and the specific benefits of each often

confuse them. And it's the job of insurance companies to educate them

about these.

But heightened awareness and consumer education goes far beyond positive

results. With them comes a willingness to view life insurance as an integral

part of the financial portfolio, marking a significant change from the earlier

attitude, where insurance was purchased as a tax saving tool. The benefits of

the increased awareness are evident - penetration of the life insurance is

begirning to cut across socio-economic classes and attract people who have

never purchased insurance before.

Traditionally, tied agents were the single channel through which insurance

policies were sold. Insurance agents would sell policies to their family,

friends, and would then direct their efforts towards people outside this

circle. Today tied agents still contribute the maximum business, but themanner in which they approach customers has changed significantly. They

are more professional and are able to guide customers much better about

the product that would best meet their needs. While this addresses the issue

of trust, there is still a need for a broad based approach.

There's also been a huge improvement in service attitude and delivery.

Technology has come to our aid, giving us a platform, the reach and the

ability to service each customer seamlessly. Multiple touch points have

emerged -- contact centers, email, facsimile, websites - which enable thecustomer to get in touch with insurance companies quickly, easily and

directly.

As with privatization in any industry, the benefits aren't restricted to the

customer alone, but extend to society at large, by generating employment

opportunities for thousands. Over the past 2 years, insurance companies -

both life and non-life - are estimated to have collectively hired at least 6,000

employees to staff their operations across the country. Another 90,000-oddhave been appointed as life insurance advisors who counsel and recommend

products to insurance buyers. And because of the specialized nature of

several functions in the insurance industry, we see completely new skill

sets being created; skill sets that are lasting, unique and raise the bar within

the industry.

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With the transformation in the industry comes a huge opportunity to taplargely ignored segments. One of the most promising areas for life insurers isretirement solutions. Consider this: Only 89% of the working population inour country has a form of social security for old age. People in theunorganized sector, self employed persons and those engaged in agriculture,

have no form of guaranteed post-retirement income. Add to this the fact thatlife expectancy is expected to rise from 77 years to 85 years in the nextdecade. And those persons aged 60 and above are expected to form 8.6%of the total population by the year 2016. It becomes obvious that the taskof retirement planning and pensions is immense and require acomprehensive, long ranging regulations.

Current Trend & Market Scenario

In a tough battle to expand market shares the private sector life insuranceindustry consisting 14 life insurance companies at 26% have lost 3% ofmarket share to the state owned Life Insurance

Corporation (LIC) in the domestic life insurance industry in 2006-07.

According to the figures released by Insurance Regulatory & DevelopmentAuthority the total premium these 14 companies have shot up by 90% to Rs19,471.83 crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilization of Rs 55,934 crore has been able retaina market share of 74.26 % during the reporting period. In total the lifeinsurance industry in first year premium has grown by 110% to Rs 75, 406crore during 2006-07. The 2006-07 performance has thrown a few surprisesin the ranking among the private sector life insurance companies. Newentrants like Reliance Life and SBI Life had shown a huge growth of over381% and 210% respectively during the year. Reliance Life which hasbecome one of the top five companies ended the year with a premium of Rs930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sectorlife insurance Company during the year Bajaj Allianz overtook ICICI Prudentialin terms of monthly market share in March, for the first time ever. Bajajsmarket share among private players in non-single premium for March stoodat 29.1% vs. ICICI Prudentials 23.8%. Bajaj gained 4.6 percentage pointmarket share among private sector players for FY07.

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Among other private players, SBI Life and Reliance Life continued to do well,each gaining 4% market share in FY07. SBI Lifes growth was driven byincreasing contribution from ULIP premiums. Another notable development ofthe 2006-07 performance has been the expansion of retail markets by thelife insurance companies. Bajaj Alliannz Life insurance has added 20 lakhpolicies while ICICI Prudential has expanded over 19 lakh policies during theyear.

Company Analysis

(Reliance life Insurance)

Background

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Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. ofthe Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indiasleading private sector financial services companies, and ranks among the top3 private sector financial services and banking companies, in terms of networth. Reliance Capital has interests in asset management and mutualfunds, stock broking, life and general insurance, proprietary investments,private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)registered with the Reserve Bank of India under section 45-IA of the ReserveBank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limitedto offer need based Life Insurance solutions to individuals and Corporate.

Promoters & Management

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. ofthe Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 percent shareholding in AMP Sanmar Life Insurance Company in August 2005.Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade

infrastructure and a portfolio.

AMP Sanmar Life Insurance was a joint

venture between AMP, Australia and the

Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices

across the country, 9,000 agents, and more than 900 employees.

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Range of Products

Reliance Secure ChildPlanReliance AutomaticInvestment PlanReliance MoneyGuarantee Plan

Reliance Group TermAssurance PolicyReliance EDLI SchemeReliance Group GratuityPolicyReliance Group

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http://www.reliancelife.com/website/products/reliance_secure_child_plan.asphttp://www.reliancelife.com/website/products/reliance_secure_child_plan.asphttp://www.reliancelife.com/website/products/reliance_automatic_investment_plan.asphttp://www.reliancelife.com/website/products/reliance_automatic_investment_plan.asphttp://www.reliancelife.com/website/products/reliance_money_guarantee_plan.asphttp://www.reliancelife.com/website/products/reliance_money_guarantee_plan.asphttp://www.reliancelife.com/website/products/reliance_group_term_assurance_policy.asphttp://www.reliancelife.com/website/products/reliance_group_term_assurance_policy.asphttp://www.reliancelife.com/website/products/reliance_edli_scheme.asphttp://www.reliancelife.com/website/products/reliance_group_gratuity_policy.asphttp://www.reliancelife.com/website/products/reliance_group_gratuity_policy.asphttp://www.reliancelife.com/website/products/reliance_group_superannuation_policy.asphttp://www.reliancelife.com/website/products/reliance_secure_child_plan.asphttp://www.reliancelife.com/website/products/reliance_secure_child_plan.asphttp://www.reliancelife.com/website/products/reliance_automatic_investment_plan.asphttp://www.reliancelife.com/website/products/reliance_automatic_investment_plan.asphttp://www.reliancelife.com/website/products/reliance_money_guarantee_plan.asphttp://www.reliancelife.com/website/products/reliance_money_guarantee_plan.asphttp://www.reliancelife.com/website/products/reliance_group_term_assurance_policy.asphttp://www.reliancelife.com/website/products/reliance_group_term_assurance_policy.asphttp://www.reliancelife.com/website/products/reliance_edli_scheme.asphttp://www.reliancelife.com/website/products/reliance_group_gratuity_policy.asphttp://www.reliancelife.com/website/products/reliance_group_gratuity_policy.asphttp://www.reliancelife.com/website/products/reliance_group_superannuation_policy.asp


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Youve always loved your family. As a loving person you want to be rest

assured that they will be happy, even if something were to happen to you.

With Reliance Whole Life Plan you can be sure that your family will receive

that timely financial Support they need. Go ahead, live your today to the

fullest, without a worry about tomorrow.

Key Features

Insurance protection till age 85

Choice of extending your insurance coverage till age 99

Convenient Premium Payment Term

Wealth creation through bonus additions

More value for your money by way of High Sum Assured Rebate

Get Sum Assured plus Bonuses in case of your unfortunate death

Option to add two Riders Critical Illness and Accidental Death

Benefit and Total and Permanent Disablement Rider

Policy Loan available after three full years premium payment

How does this Plan work?

You pay premium every year for the desired Premium Paying Term. You get

Sum Assured plus bonuses on reaching age 85. You choose to continue with

the insurance cover till the age of 99 and the Policy will continue to

participate in profits till then. On death, your Beneficiary will get the Sum

Assured plus accumulated bonuses.

Sample Premiums

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The tables below illustrate the indicative premiums for an individual Life

Assured across different Sum Assured for a Premium Paying Term of 20, 30

and 40 years.

2) Reliance Special Endowment Plan

Reliance Special Endowment Plan is the key to all your financial needs. Youget a desired lump sum after a specified period. However, your life insurance

protection continues for an extended period. If anything were to happen to

you, your Beneficiary will get another Sum Assured along with the bonuses.

The Policy comes with an added feature of a limited Premium Term, which is

always five years less than the Policy Term.

Key Features

Twin Benefit of protection and savings Sum Assured is paid on survival, at the end of the PremiumPaying Term

Life Cover for full Sum Assured continues beyond PremiumPaying Term

Extended Life Cover for five years after Premium Paying Term



Choose to add the Benefit of two Riders Critical IllnessAnd Accidental Death Benefit and Total and Permanent Disablement

Rider

Choose to avail of a Policy Loan available after three full years ofPremium payment

Policy participates in profits even after Premium Paying Term

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You pay premium every year. The Premium Paying Term is always five

years less than the Policy Term. On survival to the end of the premium

paying term you get the Sum Assured. On survival to maturity (i.e. at the

end of the Policy Term) accumulated compounded bonuses are paid.

Sample Premium

The tables below illustrate the indicative premiums for a Life Assured

across different Sum Assured and ages for a Policy Term of 20, 25 and 30

years.

3) RELIANCE MONEY GURANTEE PLAN

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO ISBORNE BY THE POLICYHOLDER.

Yes, it's a trio the pace setter plan, which promises Life Protection, an

opportunity to gain control over your investments along with protection ofdownside risk!

For the select few like you, the Reliance Money Guarantee Plan is a UnitLinked product addressing comprehensive need to strike that perfectbalance of Protection and Savings that you deserve as you grow successfully.The Reliance Money Guarantee Plan is a Regular Premium Unit Linked Policywhich guarantees the entire premium (including premiums for top- ups) paid

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by you. This is a plan which helps you reap all the benefits of a rising marketsimultaneously protecting you from the downside risk of the market.

Key Features

Capital Guarantee The sum of all premiums paid is guaranteed onmaturity or on death before the maturity.

Capital Guarantee is available on both the basic premiums as well ason top-up premiums

Unique Return Shield feature to protect your returns

Choice to invest from 3 pre-packaged investment fund options

Unmatched flexibility through our Exchange Option to move betweenthe Reliance Money Guarantee suite of products offered, as you growup the ladder

Liquidity in the form of partial withdrawals from top-up fund

Option to package with Accidental Death & Disability and TermInsurance riders

How does this plan works?

The premium contributed by you net of Premium Allocation Charges and

Miscellaneous Charge is invested in fund option of your choice for a specified

period of time as selected by you and units are allocated depending on the

price of units for the fund/funds. The Fund Value is the total value of units

that you hold in the fund. The Policy has a minimum Guaranteed Fund Value

which is equal to total of all premiums paid (excluding any additional andextra premiums if any), to be payable on survival to maturity or earlier

death. The amount of top-up premiums paid is also guaranteed on death

provided there is no partial withdrawal. The amount of top-ups premium is

guaranteed on maturity provided the top-ups premium was paid at least 10

years before the date of maturity and there is no partial withdrawal. The Sum

Assured under the Policy is fixed on the basis of the selected annual

premium and Policy Term.

The Mortality Charges and Policy Administration Charges are deducted

through cancellation of units whereas the Fund Management Charge is

priced in the Unit Value. The premiums for riders, if selected, are payable

over and above the premium for the basic Policy.

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4) RELIANCE MARKET RETURNS PLAN

You have always aspired for the best in life. And we help you achieve justthat. With Reliance Market Return Plan you can have the twin advantage ofinsurance protection as well as reaping benefits of investment growth. It is aflexible plan, which works all through your life and meets changingrequirements like additional protection, liquidity through cash, option toinvest in different asset class, steady golden years and many more.

Key Features

Twin benefit of market linked return and insurance protection

A Unit Linked Plan, different from traditional Life InsuranceProducts with maximum maturity age of 80 years

Option to create your own portfolio depending on yourRisk appetite

Choose from four different investment funds

Flexibility to switch between funds

Option to pay regular as well as single premium & top-ups

Option to package your Policy with Accidental rider

Flexibility to increase the Sum Assured

Liquidity through partial withdrawals


The premium paid by you, net of Premium Allocation Charges is invested in

fund/funds of your choice and units are allocated depending on the price of

units for the fund/funds. The Fund Value is the total value of units that youhold in the fund/funds. The Mortality Charges and Policy Administration

Charges are deducted through cancellation of units whereas the Fund

Management Charge is priced in the Unit Value.

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5) Reliance Cash Flow Plan

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

Reliance Cash Flow Plan gives you the double Benefit of life insurance along

with easy liquidity through lump sum cash. It provides money periodically

when you need it. It lets you live life to the fullest today and at the same

time, helps you stay protected for tomorrow by giving you the flexibility of

receiving a specified percentage of the Sum Assured at specified intervals.

Key Features

Easy Liquidity - Get periodic cash flows at the end of the fourth year

and thereafter at the end of every three years


On maturity, receive accumulated bonuses along with final lump

sum payout


Full Sum Assured plus bonuses in case of your unfortunate death.

This is over and above the Survival Benefits already paid

Option to add two Riders Critical Illness Rider & Accidental Death



You pay premium every year for the entire term and get Survival Benefits at

periodical intervals as mentioned below. On death, your Beneficiary will getthe full Sum Assured, plus accumulated bonuses, over and above the

Survival Benefits already paid to you.

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Sample Premiums


Assured across different Sum Assured for a Policy Term of 16, 25 and 31

years.

6) Reliance Child Plan

As a parent, it is only natural to dream of a smooth and blissful life for your

child. This is exactly why you need to secure your childs tomorrow, today.Reliance Child Plan helps you save systematically so that you can give your

child the much-needed financial security in the future. Simply put, Reliance

Child Plan gives you the freedom to enjoy every moment with your child

today, without worrying about his/her tomorrow.

Key Features

Risk protection for you during the term of the Policy

Accumulated bonus at the end of the Policy Term

25% of Sum Assured payable every year as lump sum Benefitduring the last four Policy Anniversaries

All future premiums are waived in the event of unfortunate loss of life

Guaranteed Fixed Benefits continue even after loss of life of thePolicyholder

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Choose to add the Benefit of two Riders Critical Illness andAccidental Death Benefit and Total and Permanent Disablement Rider

Policy participates in profit even after the loss of life of the Life Assured


You pay premium every year for the entire term and get guaranteedFixed Benefits every year during the last four years of the Policy Term.On death, your Beneficiary will get the Sum Assured, guaranteed FixedBenefits on specified dates and all future premiums will be waived. Allattached bonuses are payable at the end of the Policy Term and willremain attached to your Policy even after payment of Life CoverBenefit.

Sample Premiums


Assured across different Sum Assured for a Policy Term of 15, 18 and 20

years.

7) Reliance Special Credit Guardian Plan

In todays world of easily available loans, we often tend to neglect the

implications of non-payment in case of our untimely demise. Reliance Special

Credit Guardian Plan helps you and your family avoids such situations by

securing your housing loans, personal loans and even credit card payments.

What makes the Plan special is the fact that on survival at maturity, all

premiums paid for your basic Policy will be returned to you.

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Key Features

Different types of loans are covered under this plan - HousingLoan, Personal Loan, outstanding on credit cards etc.

Limited premium paying term

Single and Regular Premium payment options Discount on premium rates for women

Decreasing Term Insurance

Option to add two Riders Critical Illness and Accidental DeathBenefit and Total and Permanent Disablement Rider


You pay premium every year for the entire term. The Sum Assured decreases

as per the Policy Schedule in line with the outstanding Loan Schedule. Ondeath, your Nominee will get the Sum Assured. On survival on maturity, you

will receive all basic premiums paid.

Sample Premiums

The tables below illustrate the indicative premiums for a male Life Assured

across different Sum Assured and ages for a Policy Term of 10, 20 and 30

years.

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Future plans and Projects

Less than 25% of total population covered under lifeinsurance.

Life insurance premium as part of GDP accounts for

2.5% as compared to 12.5% in USA.(India-27th in

world).

Fifth biggest country in terms of GDP in PPP terms.

Insurance market growth of 47.3% for the year

2005-06 and 34.7% for the year 2004-05.

Saturating American and European market pushing

global companies to markets like India and China in

Search of new markets.

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Why Life Insurance:

1 What do you think of Life Insurance primarily?

Considering the Indian general mass about what they think about insurancepolicy, majority of the people bought insurance as a security against deathwhich depicts people have ensured that their dependents dont suffer incase

of any uncertainty as life insurance indemnifies the nominees in case of aneventuality to the insured. By having insurance policy, the financial future ofthe nominees is secured in the absence of the person insured. It means theyuse life insurance to cover the risk of there life.Over 8% of the people purchase insurance as a word-of-mouth due to high

demand of the product and as a tax saving and many other reason. It wasalso observed that around 28% of the people bought insurance as a mixtureof both risk cover & and as an investment product. The analysis ofrespondents is shown below in figure.

2 What are the important features of an insurance

investment for you?Investing is a conscious decision to set money aside for a long enough

periods in an avenue that suits your risk profile. The objective behind

investments, majority of the respondents disclosed growth of capital as their

prime objective while safety of capital stands secondary. This reflects the

investor willingness to take calculated risks for growth of their capital.

It highlights that growth of capital is the most important factor which they

consider wile investing. However, it can also be seen that of the investors

prefer safety of their capital as their secondary objective which depicts that

investors give greater emphasis to the returns and willing to adjust with

safety of capital. Liquidity is the least important factor as less no. of the

respondents voted for it which signifies that the financial planner should

designed the portfolio giving more importance to growth and safety of

capital as per individual financial goals while liquidity should have the

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minimum focus. The important features as per the respondent are growth,

safety, security& risk covers are important.

3 Whom do you rely on before buying an insurance policy?

An individuals decision has a vital role to play in achieving investment

objectives and thereby making investments in a systematic manner.

Decisions can make or break investment avenues as wrong decisions wouldmerely lead to wrong investments result. There are majority of people who

feel that they can handle their portfolio on their own and hence make their

own decisions regarding investments. But in questionnaire the respondents

are asked to rank the person whom they rely before buying an insurance

policy. Which show that self (through comparison of various companies)

holds 40% and other get low than that in which others & company

advertisement not gets a single percentage?

4 What are the important attributes you look for in

him/ her in an insurance agent if u relies on him?

The average score of importance derived by taking an average of the scoresgiven by the respondents on the respective parameter. These averages werethen converted to percentage form and then subsequently ranks wereallotted. The first rank signified most important parameter or factor whichthe investor consider that she / he rely on insurance agent, while insubsequent ranks the level of importance reduce accordingly. Transparency holds the highest rank in the responses which primarilyhighlights absolute importance for unbiased and impartial services in the

minds of the investors. Secondly, Investors while deciding, look into thebanquet of services being offered by the advisors in relation.

5 Do you think you will like to buy an insurancepolicy scrutinizing features online?The knowledge about insurance policy, majority of the people answer thatthey dont know more about policy they just believe & get advice from afinancial advisor. There are a number of financial advisors offering a diverseportfolio of services to suit different financial requirements of the individuals.In order to accomplish the task, these companies provide the assistance of

professional financial advisors. The advisors educate individuals on themerits of a long-term approach and regular investing and help to rebalancetheir portfolio. This type of response is avail from the investor as they arebusy in there work more.

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6 How do you think you will like to pay premiums?

These averages were then converted to percentage form and thensubsequently ranks were allotted. The first rank signified most importantparameter or factor which the investor consider while deciding to makepayment, while in subsequent ranks the level of importance reduceaccordingly. Transparency holds the highest rank in the responses

which primarily highlights absolute importance for unbiased and impartialservices in the minds of the investors. Secondly, Investors while deciding,look into the banquet of services being offered by the advisors in relation.Investors are not much bothered to go in office & make payment of policy.

7 What is your preferred premium paymentfrequency?

Investing is a conscious decision to set money aside for a long enoughperiods in an avenue that suits your risk profile. The people who have thereown business they mainly believe in making payment in yearly or a halfyearly mode. As per there view they need cash frequently in there businessso they withdraw cash on certain point for there investment.

8 What is your preferred time period of insurance?

On enquiring from the respondent about there preferred time period for ainsurance policy, 40% of the respondents feel that investing in insurance is

the safest form of investment so they want to invest for a long time of 10 to15 year The least time which is liked by the respondent is the time period of1year not a single respondent choose the time period for a year.It can be seen from the response that people are more willing to put theirmoney for a long period then a short period. About 30% of the respondentsfeel that insurance for more than 15 year is also the safe form ofinvestments as it gives assured returns on the sum invested.Some of the respondent are also short term investor in the insurance as theyinvest to get a return in a short time they generally invest in the ulip, cashflow plan so they get there return in a short period of time.

Product Analysis

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Reliance Whole Life Plan

Youve always loved your family. As a loving person you want to be rest assured

that they will be happy, even if something were to happen to you. With Reliance

Whole Life Plan you can be sure that your family will receive that timely financial

Support they need. Go ahead, live your today to the fullest, without a worry abouttomorrow.

USP of Product

Insurance protection till age 85

Choice of extending your insurance coverage till age 99

Convenient Premium Payment Term



Get Sum Assured plus Bonuses in case of your unfortunate death

Option to add two Riders Critical Illness and Accidental Death


Policy Loan available after three full years premium payment

Competition

ICICI prudential life time super

HDFC Single premium Whole of Life Insurance

Bajaj Allianz Life Time Care

Birla Sun Life Term Plan

SBI Life Insurance Sukhjeevan (Single Premium Product)

Marketing & StrategiesHaving set a best in class agency distribution model in place, the company is

spearheading a major thrust into additional distribution channels to further

grow its business. The company is using a five-pronged strategy to pursue

alternative channels of distribution. These include the franchisee model, rural

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business, direct sales force involving group insurance and telemarketing

opportunities, banc assurance and corporate alliances.

1) Building a Franchisee model

2) Rural business

3) Direct sales force involving group insurance.

4) Bank assurance

5) Corporate alliances

6) Advertising

7) Sales promotion

8) Cross selling

SWOT Analysis

Strength

Brand name

Minimum allocation Charges

Self fund house

Wide distribution network

Nationwide presence

Highest sum assured

Weakness

Promotional displays not provided to

the customer.

Lack of trust on private ltd. Company

Limited products compared to LIC

Opportunity Threat

Competitor also innovating same

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Untapped market.

Liberalization coming in insurance

sector

People going for brand product.

Literacy rate increasing.

type of product.

More number of competitors coming

in market which will hamper

profitability by providing more

services.

Increased awareness of otherinvestment tools

Pricing Strategies

Penetration pricing

As Reliance life insurance is new to the market they are trying to

penetrate and survive by keeping low prices and lucrative offers.

For this they are focusing mainly on the maximum market share

and maximizing the reach to the people, keeping the cost lowest

and the services the best

Suggestions & Conclusion

Selling of Financial Products is a never ending project, as it is about

establishing a company in the market. The whole project gave a good

learning about the Insurance Industry (includes every insurance company)

and about Reliance life insurance. This year Life Insurance Industry has

grown by 62%, which means people starts adopting insurance with differentperspective, which is a green signal for any insurance company. This year

ULIP (unit linked insured plan) have done a good business, means people

have seen insurance as an investment option.

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Seeing the latest trend of the market, it is obvious that insurance industry

will grow at large and in future there will not be any house which doesnt

have any insurance policy.

1 Low Saving Potential

The advisor should promote regular savings among the investors so as to open

various investment channels for them to fetch good returns.

2 Growth of Capital is the Major Objective behind Investments

It was observed that do investments for achieving growth of capital i.e. revenue

maximization. Safety of capital was considered secondary objective behind

investments assured returns which reflect that investors are more concerned for

growth rather than safety irrespective of their financial goals in life. A advisor can

take care of all the financial goals in keeping thee goals in mind, he can recommend

certain investment options ranging from mutual funds, insurance, IPO, post office

schemes, secondary markets, etc.

3 High Awareness of Financial Advisors in the Indian Market

Majority of the investors are aware about the concept of financial advisors but

among them, very few investors have actually gone for availing these services

which shows lack of trust and confidence in the services provided by the financial

advisors in the eyes of general public. The financial advisors should find out the

deficiencies and flaws in the current services being provided to the investors and

attempt at Suggesting ways and means to remedy the same.

4 Investors taking Financial Decisions Independently

Investors are taking their financial decisions independently without doing any

financial planning. This reflects the need for proper advisors who will take note of

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and record all the financial goals and will simultaneously work out the money value

for each of the goals.

Recommendations

On studying the peculiarities of the wealth management industry and

analyzing the responses of the investors on their perception and expectation

from a financial advisor, the following points are recommended which a

general financial advisor should consider while approaching the people.

India is seeing a maturing financial environment. Interest rates have fallen

and unlike in the past, options to attract savings exist through a spate of

financial products and services that have differing risk/growth and asset

accretion propositions. It is becoming increasingly obvious to people that

their money, in real terms, would fall in value if they were to keep their

money in the bank. And hence the keenness to find out the right avenue that

would help grows their savings or assets.

1 Awareness of the Benefits of Planning Early for Retirement

Anyone who will retire needs to plan for it. There is more than one reason to

save for retirement. The all-important reason is the rising cost of living. Its

called inflation. If you start planning for retirement early on, you can bridge

the gap between what you have in your hand today and what you would like

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to have when you retire. If you begin saving for retirement early on in your

life, you can set aside smaller amounts.

2 Financial Planning Should Be Encouraged

Financial planning is the process of charting out the money course of yourlife. Its like having a financial roadmap that guides your every step till you

pass on the baton to the next generation. In other words, it is a process in

which an individual sets long-term financial goals through investments, tax

planning, asset allocation, risk management, retirement planning and estate

planning.

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3 Certified Financial Planners

Financial planning is a new animal in the Indian market, but this beast

is already attracting a lot of attention. The big thing to happen is the coming

to India of the Certified Financial Planner (CFP) mark, owned by the Board of

Standards in the US and licensed out to non-profit associations in 18countries, including the US, Canada, Australia and the UK. Leading financial

playersasset management companies, banks, mutual funds and insurance

companies, forms these associations.

4 Unbiased Advisory

Investment Advisory Services are in this business of managing the assets of

individuals and corporations. However, the distinct model of services should

enables the advisors to offer unbiased advise on the entire spectrum of

personal finance, keeping the clients interest foremost while doing so. The

investment strategies developed across perpetuity should outline a detailed

financial plan with frequent reviews of investment decisions made to ensure

that portfolios are in line with what was planned. Id like to add here that the

financial advisory should not only be unbiased with respect to an asset class

but it should also be independent of biases across manufacturers within an

asset class.

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Bibliography

IRDA Website

Reliance Insurance Website

life insurance report

Documents