SUMMER TRAINING REPORT

ON

“RECRUITMENT OF FINANCIAL CONSULTANTS”

WITH

HDFC STANDARD LIFE INSURANCE LTD.

SUBMITTED BY:

ARSHIA LOGANI

BBA(B&I) 5th SEM

06414901810

MAHARAJA SURAJMAL INSTITUTE Recognised By UGC u/s 2(f) Department of Business Administration

(Affiliated to Guru Gobind Singh Indraprastha University)

Table of contents

S. No. Particulars

CERTIFICATE

ACKNOWLEDGEMENT

EXECUTIVE SUMMARY

Pages

1. INTRODUCTION

1.1- Objectives

1.2-Scope of study

1.3-Limitations

1.4-Introduction to topic

1.5-Research Methodology

5-14

2.

3.

4.

5.

COMPANY PROFILE

THEORITICAL FRAMEWORK ON

RECRUITMENT OF FINANCIAL CONSULTANTS

DATA ANALYSIS

CONCLUSION

CERTIFICATE

19-38

39-44

45-59

60-89

This is to certify that Ms. ARSHIA LOGANI , of BBA (B&I) (M)

currently in the 5rd Semester has completed her Summer Training

Report, as a part of the fulfillment of her programme from

Maharaja Surajmal Institute, affiliated to Guru Gobind Singh

Indraprastha University under my supervision and guidance, and

submitted the same within the framework of the guidelines as

issued by the University.

She was constantly in contact with me, and the data provided is

correct and factual as verified by all sources and users.

I wish her all the best in her entire future endevour.

Mr.Jagbir Ahlawat

(Reader& Associate Prof )

Maharaja Surajmal Institute

ACKNOWLEDGEMENT

I take great pleasure to thank and acknowledge the permission and

allowance by Mr. Sanjeev Rana , BRANCH MANAGER, HDFC

STANDARD LIFE INSURANCE, DELHI REGION and his help and

inspiration provided. I extend a whole hearted thanks to Mr. ASHISH

SISODIA under whom I worked and learned a lot and for enlightening me

with their knowledge and experience to grow with the corporate working.

Their guidance at every stage of the Project enabled me to successfully

complete this project which otherwise would not have been possible

without their constant encouragement and motivation, without the support

it was not possible for me to complete the report with fullest endeavour.

I would also like to extend my thanks to my College Faculty Members Mrs.

ANKUR CHABBRA all my colleagues in the company who supported me

in carry out my operation successfully and generously and provided me

vital information/ training regarding the my project objective.

EXECUTIVE SUMMARY

I had undergone a practical training under HDFC STANDARD LIFE INSURANCE,VIKAS PURI West Delhi. It was a good exposure for me to undergo training in such a company to get the knowledge and experience regarding life insurance and recruitment of capable of life insurance advisors.

Summer training is one of the major experiencing component of the knowledge, gain of relevant of information with respect to marketing and dealing with situations in a professional course like M.B.A. where a professional person faces a problem in a field. I was able to get familiarized with the customer relationship and got to know how a company measures to resolve their grievances and service them to the maximum for future prospect and success. Field component like survey, generation of questionnaire with respect to marketing helped me a lot and would be a great support in future.

“It is good to have enthusiasm but it is essential to have training.

Training can be in all way of life.” Thus I would say that this training was

beneficial educative & good exposure to me, which will certainly help in

my near future. This project was designed with respect to this company.

The project made me to get the enhanced knowledge regarding life

insurance concept and the process of recruiting of financial consultant.

*****

OBJECTIVES OF THE PROJECT

To study the perception about the insurance industry. To know about awareness of consumers towards insurance industry. To identify market share in insurance industry. To recruit financial consultants.

SCOPE OF STUDY

Actually I have got my summer internship on 2 topics –1) On Life insurance industry ,2) On recruitment of financial consultants.

LIMITATIONS

1. Difference in the opinion of the customers and the company..

2. Company is not willing to disclose full information.

3. Biased behavior of the respondents.

4. Sample size being small, may not reflect the opinion of major segment.

5. Time frame is limited.

6. Difficulty in analyzing the data because of multiple responses given by the respondents.

INTRODUCTION - INSURANCE

The insurance sector was opened up in the year 1999 facilitating the entry

of private players into the industry. With an annual growth rate of 24.31

percent and the largest number of life insurance policies in force, the

potential of the Indian insurance industry is huge. The year 1999 saw a

revolution in the Indian insurance sector, as major structural changes took

place with the ending of Government monopoly and the passage of the

Insurance Regulatory and Development Authority (IRDA) Bill, lifting

entry restrictions for private players and allowing foreign players to enter

the market with some limits on direct foreign ownership.

According to the CSO, the insurance and banking services’ contribution to

the country’s GDP is 7.1 percent out of which the gross premium

collection forms a significant part. Life insurance penetration in India was

less than 1 percent till 1990-91. During the ‘90s, it was between 1 and 2

percent and from 2001 it was over 2 percent. In 2003-04 it was 2.4 percent.

The impetus for increase is due to the active role played by IRDA in

licensing private players and taking positive steps in increasing the

insurance awareness among the people. Besides, the insurance companies

in general and private insurance companies in particular, are reaching out

to untapped potential in rural areas with aggressive campaigns.

Innovative products, smart marketing, and aggressive distribution have

enabled fledgling private insurance companies to sign up Indian customers

faster than anyone expected. Life insurance is viewed as a tax saving

device. People are now turning to the private sector for providing them

with new products and greater variety for their choice. The improvement in

FDI flows reflected the impact of recent initiatives aimed at creating an

enabling environment for FDI and for encouraging infusion of new

technologies and management practices. The Government’s proposal to

increase the FDI cap in the insurance sector from the present 26 percent to

49 percent has raised expectations among the international insurance

companies.

The Nature Of Insurance

The insurance has the following characteristics which are observed in cases

of life, marine, fire and general insurance.

1. Sharing of risks: Insurance is a cooperative device to share the

financial losses which might befall on an individual or his facility on the

occurrence of specified event such as sudden death of the bread winner,

marine perils in marine insurance, fire in the fire insurance and theft

insurance etc. in the case of general insurance.

2. It is a cooperative device: A large number of persons agree to share

the loss arising sue to a particular risk. Thus, insurance is a cooperative

device.

3. Value of risk: The risk is evaluated before insuring to charge the

amount of share called premium.

4. Payment made at contingency: The payment is made at a certain

contingency insured. The Contingency may be death, fire, marine perils

etc.

5. Amount of payment: The amount of payment depends upon policy

insured.

Functions of Insurance

A) Primary Functions

1. Insurance provides certainty: Insurance provide certainty of payments

at the uncertainty of losses. The element of uncertainty is reduced by

better planning and administration.

2. Insurance provides protection. The risk will occur or not, when will

occur and how much loss will be there. There are uncertainties of

happening of time and amount of losses. The main function of the

insurance is to provide protection against the losses.

3. Risk sharing: Risk is uncertain and therefore, the loss arising from the

risk is also uncertain. All business concern faces the problem of the risk

and if the concern is big enough the handling of risk becomes a

specialized function. Insurance, as a device is the outcome of the

existence of various risks in our day to day life. It spreads the whole

losses over a large number of persons who are exposed by a particular

risk.

B. Secondary Functions

1. Prevention of loss: Prevention is always better than cure. Prevention

is by far the best solution to the problem of risk. It is more effective

and cheapest method to avoid the unfortunate consequence. But

sometimes prevention is not always possible and Effective.

2. It provides capital: It provides the capital to the society. For plan

development of country there is a great need for huge amount of

capital. Now days, the insurance companies are rendering positive

help in the development of trade, commerce and industry of the

country.

3. It improves efficiency: Achievement of goals, it improves not only

his efficiency of the masses is also advanced. The insurance

eliminates worries and miseries of losses as death and destruction of

property care free person can devote his energies for better.

4. It ensures the welfare of society: “Insurance is a saga of service and

security” to thee society. Security of the life and property given by insurance

bring peace of mind to the insured. The investment in LIC in welfare schemes

like electricity, housing, water supply, agro industry estates are able to solve

many problems in India.

5. It helps in economic progress: Insurance provides an initiative to

work hard for the betterment of the masses. Life insurance involves the

element of saving investment through small savings. And which has been

growing in recent yrs at an annual rate of about Rs. 400 crs, life insurance

is not a mere business organization, it has nobler welfare responsibilities

in the development of the economy.

*****

RESEARCH METHODOLOGY

Research: - is a process of collecting, analyzing, interpreting and

summarizing in a significant manner for the purpose of framing out

necessary conclusion and findings of data perceived and formulated for

deriving out the meaningful information. To carry our research necessary

telephonic calls needed to be done, suitable appointments were to be fixed

and therefore market survey is to be followed.

Objective of training: - To understand life insurance and recruitment of

capable life insurance advisors for growth prospects.

Process: Methodology or process involving in the Research followed

during the course of summer training is as follows: -

a) Collection of data: - This is an important aspect in formulating the

objective of research process where the data is collected via two

process: - i) Primary Sources and ii) Secondary sources

i) Primary sources: - Where the data is collected primarily by

interviewing and personal observation and is original in nature and

accurate to the considerable extent.

ii) Secondary sources: -Where the data is obtained from some published

and printed sources such as newspaper, magazines, websites and so

on.

b) Analyzing of collected data: - The data collected through market survey

and published sources is then processed to obtained necessary

inferences and findings for the purpose of achieving the objective as

well as to derive necessary conclusion. A considerable skill and

knowledge is involved in analyzing the data for the purpose of

interpreting thereof.

c) Interpreting of data: - it is the significant step where the data collected

and analyzed is interpreted in the forms of graphs and figures is

depicted in the report called Project report.

d) Summarizing of data: - Thereby necessary summary is prepared which

is essential in the project report of the summer training being done

under an organization.

Helpful Arms of Research Methodology: -

Questionnaire: - Questionnaire is a set or group of questions being framed

for the purpose of obtaining market perspective about a particular aspect or

topic.

There are two types questionnaire bing carried necessary for the market

survey of the summer training being undertaken and put for the by the

trainee to the sample people taken as a base for entire population:

a) Open ended Questionnaire: - where the people (also called respondents)

are required freedom to present their views and suggestions for the

benefits and success of the organization.

b) Close ended questionnaire: - where the respondents is limited to the

choice of answer being delivered by the interviewer itself so that quick

and fast means of responses be derived out without wasting much time.

Here close ended questionnaire being followed by me during the course

of the summer training market survey.

Sampling: - Sampling is a process of obtaining a number of individuals

taken a base for the entire population since entire population can not be

asked about the necessary objective upon which a questionnaire is put forth

needed for the responses to be derived for the purpose of generation of

facts and customer view point regarding their perception of particular

product or services.

There are two type of sampling – i) Random Sampling and ii) Systematic

sampling.

i) Random sampling: - Random sampling is a process of selecting the

sample size randomly and no choice or preference to be made about

the selection of respondents for the market survey and questionnaire

to be put forth against him. Here, Random sampling being adopted

by me.

ii) Systematic sampling: - it is a sampling where the limited number of

selected respondents is figured out based on some criteria so that

only those respondents can be asked for the purpose of filing

questionnaire.

Sample Size: - 75 respondents.

*****

HDFC STANDARD LIFE INSURANCE

The Introduction

Standard Life Insurance Company Ltd. is one of India's leading private

insurance companies, which offers a range of individual and group

insurance solutions. It is a joint venture between Housing Development

Finance Corporation Limited (HDFC Ltd.), India's leading housing finance

institution and a Group Company of the Standard Life, UK. HDFC as on

March 31, 2007 holds 81.9 per cent of equity in the joint venture.

Our key strengths

Financial Expertise: As a joint venture of leading financial services

groups, HDFC Standard Life has the financial expertise required to manage

your long-term investments safely and efficiently.

Range of Solutions: We have a range of individual and group solutions,

which can be easily customised to specific needs. Our group solutions have

been designed to offer you complete flexibility combined with a low

charging structure.

Track Record so far: Our gross premium income, for the year ending

March 31, 2007 stood at Rs. 2, 856 crores and new business premium

income at Rs. 1,624 crores. The company has covered over 8,77,000 lives

year ending March 31, 2007

HDFC and Standard Life first came together for a possible joint venture, to

enter the Life Insurance market, in January 1995. It was clear from the

outset that both companies shared similar values and beliefs and a strong

relationship quickly formed. In October 1995 the companies signed a 3

year joint venture agreement. Around this time Standard Life purchased a

5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in

government and ongoing delays in getting the IRDA (Insurance Regulatory

and Development authority) Act passed in parliament. Despite this both

companies remained firmly committed to the venture. In October 1998, the

joint venture agreement was renewed and additional resource made

available.

Around this time Standard Life purchased 2% of Infrastructure

Development Finance Company Ltd. (IDFC). Standard Life also started to

use the services of the HDFC Treasury department to advise them upon

their investments in India. Towards the end of 1999, the opening of the

market looked very promising and both companies agreed the time was

right to move the operation to the next level. Therefore, in January 2000 an

expert team from the UK joined a hand picked team from HDFC to form

the core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and

a 5% stake in HDFC Bank. In a further development Standard Life agreed

to participate in the Asset Management Company promoted by HDFC to

enter the mutual fund market.

Promoters of HDFC Standard Life Insurance:

1. HDFC Limited

HDFC is India’s leading housing finance institution and has helped build

more than 23,00,000 houses since its incorporation in 1977. In Financial

Year 2003-04 its assets under management crossed Rs. 36,000 Cr. As at

March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The

depositor base now stands at around 1 million depositors.

Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year

Stable and experienced management

High service standards

Awarded The Economic Times Corporate Citizen of the year Award for

its long-standing commitment to community development.

Presented the ‘Dream Home’ award for the best housing finance

provider in 2004 at the third Annual Outlook Money Awards.

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life group has been looking after the financial needs of

customers for over 180 years. It currently has a customer base of around 7

million people who rely on the company for their insurance, pension,

investment, banking and health-care needs.

Its investment manager currently administers £125 billion in assets. It is a

leading pensions provider in the UK, and is rated by Standard & Poor's as

'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's

Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and

2006 at the Money Marketing Awards, and it was voted a 5 star life and

pensions provider at the Financial Adviser Service Awards for the last 10

years running.

The '5 Star' accolade has also been awarded to Standard Life Investments

for the last 10 years, and to Standard Life Bank since its inception in 1998.

Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the

Mortgage Magazine Awards in 2006

Incorporation: Hdfc Standard Life Insurance Company Limited

The company was incorporated on 14th August 2000 under the name of

HDFC Standard Life Insurance Company Limited.

Our ambition from as far back as October 1995, was to be the first private

company to re-enter the life insurance market in India. On the 23rd of

October 2000, this ambition was realised when HDFC Standard Life was

the only life company to be granted a certificate of registration. HDFC are

the main shareholders in HDFC Standard Life, with 81.4%, while Standard

Life owns 18.6%.

Given Standard Life's existing investment in the HDFC Group, this is the

maximum investment allowed under current regulations. HDFC and

Standard Life have a long and close relationship built upon shared values

and trust. The ambition of HDFC Standard Life is to mirror the success of

the parent companies and be the yardstick by which all other insurance

company's in India are measured.

Our Mission

We aim to be the top new life insurance company in the market. This does

not just mean being the largest or the most productive company in the

market, rather it is a combination of several things like-

Customer service of the highest order

Value for money for customers

Professionalism in carrying out business

Innovative products to cater to different needs of different customers

Use of technology to improve service standards

Increasing market share

Our Values

1. SECURITY: Providing long term financial security to our policy

holders will be our constant endeavour. We will be do this by offering

life insurance and pension products.

2. TRUST: We appreciate the trust placed by our policy holders in us.

Hence, we will aim to manage their investments very carefully and live

up to this trust.

3. INNOVATION: Recognizing the different needs of our customers, we

will be offering a range of innovative products to meet these needs. Our

mission is to be the best new life insurance company in India and these

are the values that will guide us in this.

Board of Directors:-

1. Mr. Deepak S Parekh is the Chairman of the Company. He is also the

Executive Chairman of Housing Development Finance Corporation

Limited (HDFC Limited).

2. Mr. Keki M Mistry is currently the Managing Director of HDFC

Limited. Mr. Alexander M Crombie is the Group Chief Executive of the

Standard Life Group in March 2004.

3. Ms. Marcia D Campbell is currently the Group Operations Director in

the Standard Life group and is responsible for Group Operations, Asia

Pacific Development, Strategy & Planning, Corporate Responsibility and

Shared Services Centre.

4. Mr. Keith N Skeoch is currently the Chief Executive in Standard Life

Investments Limited and is responsible for overseeing Investment

Process & Chief Executive Officer Function.

5. Mr. Gautam R Divan is a practising Chartered Accountant and is a

Fellow of the Institute of Chartered Accountants of India.

6. Mr. Ranjan Pant is a global Management Consultant advising

CEO/Boards on Strategy and Change Management.

7. Mr. Ravi Narain is the Managing Director & CEO of National Stock

Exchange of India Limited.

8. Mr. Deepak M Satwalekar is the Managing Director and CEO of the

Company.

9. Ms. Renu S. Karnad is the Executive director of HDFC Limited.

*****

PRODUCTS

At HDFC Standard Life, we offer a bouquet of insurance solutions to meet

every need. We cater to both, individuals as well as to companies looking

to provide benefits to their employees. This section gives you details of all

our products. We have incorporated various downloadable forms and

product details so that you can make an informed choice about buying a

policy.

For individuals, we have a range of protection, investment, pension and

savings plans that assist and nurture dreams apart from providing

protection. You can choose from a range of products to suit your life-stage

and needs.

For organisations we have a host of customised solutions that range from

Group Term Insurance, Gratuity, Leave Encashment and Superannuation

Products. These affordable plans apart from providing long term value to

the employees help in enhancing goodwill of the company.

Individual Products

We at HDFC Standard Life realise that not everyone has the same kind of

needs. Keeping this in mind, we have a varied range of Products that you

can choose from to suit all your needs. These will help secure your future

as well as the future of your family.

Protection Plans

You can protect your family against the loss of your income or the burden

of a loan in the event of your unfortunate demise, disability or sickness.

These plans offer valuable peace of mind at a small price. Our Protection

range includes our Term Assurance Plan & Loan Cover Term Assurance

Plan.

Investment Plans

Our Single Premium Whole Of Life plan is well suited to meet your long

term investment needs. We provide you with attractive long term returns

through regular bonuses.

Pension Plans

Our Pension Plans help you secure your financial independence even after

retirement. Our Pension range includes our Personal Pension Plan, Unit

Linked Pension, Unit Linked Pension Plus

Savings Plans

Our Savings Plans offer you flexible options to build savings for your

future needs such as buying a dream home or fulfilling your children’s

immediate and future needs. Our Savings range includes Endowment

Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus,

Money Back Plan, Children’s Plan, Unit Linked Youngstar, Unit Linked

Youngstar Plus .

Group Products

One-stop shop for employee-benefit solutions

HDFC Standard Life has the most comprehensive list of products for

progressive employers who wish to provide the best and most innovative

employee benefit solutions to their employees.

We offer different products for different needs of employers ranging from

term insurance plans for pure protection to voluntary plans such as

superannuation and leave encashment. We now offer the following group

products to our esteemed corporate clients:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses

with Gratuity, Defined Benefit or Defined Contribution Superannuation or

Leave Encashment schemes of your company

Also suitable for other employee benefit schemes such as salary saving

schemes and wealth management schemes

Social Products

Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover

to members of a Development Agency for a term of one year. On the death

of any member of the group insured during the year of cover, a lump sum is

paid to that member’s beneficiaries to help meet some of the immediate

financial needs following their loss.

Eligibility

Members of the development agency and their spouses with:

- Minimum age at the start of the policy 18 years last birthday

- Maximum age at the start of policy 50 years last birthday

Employees of the Development Agency are not eligible to join the group.

The group to be covered is only eligible if it contains more than 500

members.

Premium Payments

The premium to be paid will be quoted per member in the group and will

be the same for all members of the group. The premium can only be paid

by the Development Agency as a single lump sum that includes all

premiums for the group to be covered. Cover will not start until the

premium and all the member information in our specified format has been

received. The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per

member.

Benefits

On the death of each member covered by the policy during the year of

cover a lump sum equal to the sum assured will be paid to their

beneficiaries or legal heirs. Where the death is as a result of an accident, an

additional lump sum will be paid equal to half the sum assured. There are

no benefits paid at the end of the year of cover and there is no surrender

value available at any time.

The role of the Development Agency

Due to the nature of the groups covered, HDFC Standard Life will be

passing certain administrative tasks onto the Development Agency. By

passing on these tasks the premium charged can be lower. These tasks

would include:

Submission of member data in a specified computer format

Collection of premiums from group members

Recording changes in the details of group members

Disbursement of claim payments and the mortality rebate (if any) to

group members

These tasks would be in addition to the usual duties of a policyholder such

as:

Payment of premiums

Reporting of claims

Keeping policy holder information up to date

Training and support will be available to give guidance on how to complete

the tasks appropriately. Since these additional tasks will impose a burden

on the Development Agency, the Development Agency may charge a Rs.

10 administration fee to their members.

Prohibition of rebates

Section 41 of the Insurance Act, 1938 states

No person shall allow or offer to allow, either directly or indirectly, as an

inducement to any person to take out or renew or continue an insurance in

respect of any kind of risk relating to lives or property in India, any rebate

of the whole or part of the commission payable or any rebate of the

premium shown on the policy, nor shall any person taking out or renewing

or continuing a policy accept any rebate, except such rebate as may be

allowed in accordance with the published prospectus or tables of the

insurer If any person fails to comply with sub regulation (previous point)

above, he shall be liable to payment of a fine which may extend to rupees

five hundred

Tax Benefits

INCOME TAX SECTION GROSS ANNUAL SALARY HOW MUCH

TAX CAN YOU SAVE? HDFC STANDARD LIFE PLANS

Sec. 80C Across All income Slabs. Upto Rs. 33,990 saved on investment

of Rs. 1,00,000. All the life insurance plans.

Sec. 80 CCC Across all income slabs. Upto Rs. 33,990 saved on

Investment of Rs.1,00,000. All the pension plans.

Sec. 80 D* Across all income slabs. Upto Rs. 3,399 saved on Investment of

Rs. 10,000. All the health insurance riders available with the conventional

plans.

TOTAL SAVINGS POSSIBLE ** Rs. 37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec.

80 D, calculated for a male with gross annual income exceeding Rs.

10,00,000.

Sec. 10 (10) D Under Sec. 10(10D), the benefits you receive are

completely tax-free, subject to the conditions laid down therein.

* Applicable to premiums paid for Critical Illness Benefit, Accelerated

Sum Assured and Waiver of Premium Benefit.

** These calculations are illustrative and based on our understanding of

current tax legislations, which are subject to change.

Please contact your tax consultant for exact calculation of your tax

liabilities.

*****

LIFE INSURANCE FINANCIAL CONSULTANT

Eligibility for an Insurance Agent

Every person who has cleared higher secondary examination can become

an Agent other than a minor or the person who is convicted in any court for

crime or any legal proceedings. Men and women both can work as an

Agent. A single person can be associated with other life insurance

companies.

A training program is there to train a person who wants to become an

Agent. There is 100 Hrs. training program which can be done either with

the physical appearance in the class room or the interest basis. In the

classroom training the trainee has to be physically present in the training

session. There are difference sessions of training program. A trainee can

attend any session according to his comfort. The training period is of 25

days approx. If the trainee does not have enough time to devote in the

classroom training, then there is another option left that is training on

Internet.

On the basis of Internet the trainee has provided a login number along with

the password through which he operated his login and completed his

training hrs ,as an when convenient. Each and every hour pass on the net

under his login head will be count on his account. The test for the training

program is also on line. This is only procedure to be an Insurance Agent.

Scope of Insurance Agent

In the present scenario the living standard is becoming higher and higher

every day. Every person who has a family to survive wants to provide his

family each and every possible comfortable thing. He wants his children to

be a well dressed, to be higher qualified in a well recognized school,

colleges, institutes and wants his children to go abroad for higher

education. He wants to live a luxury life full of pleasure.

To fulfill all of his needs he has to earn more and more. Any person can be

on a job at a time or can be on a business can’t fulfill his pleasure

requirement. There is a source through which he can make money in a legal

way that is insurance sector.

Becoming an insurance Agent provides him the legal source by which he can

earn money with his current status. It is the business in which you deal with

you personal contacts and can gain extra income. This business needs low

investment and not of much effort. It’s all depend on your social contacts and

your skills to convince people by helping them to suggest the product which

suited them the most. As due to critical diseases, growing percentage of

accident and fear of financial crisis everyone wants to secure his or her future.

Insurance sector plays a vital role in assuring people about their future. As the

scope of insurance enhancing, the need of an insurance Agent who can guide

the potential customers is growing. Being an Insurance Agent of HDFC-

STANDARD LIFE INSURANCE provides a legal mean to earn money which

protects a person from earning through a illegal source which is harmful for

society as well as himself. For the youngsters it provides great platform to

prove them. On the basis of their performance they can be recruited as unit

manager. Its recruitment procedure is very easy. A person with high educating

and well experience can be recruited after a personal interview and group

discussion. After the training program is completed the Insurance Agent has to

appear for the pre-examination conducted by IRDA. As he clear the exam he

provides a license, which is the proof of a legalized insurance Agent, which

permits him to deal in his insurance business.

RECRUITMENT PROCESS:

Steps in recruitment of Insurance Agents

Approach to the likely person

Appointment as per condition

Discuss the topic

Give the documents which includes:-

1. Prospectus of the company

2. Brochure

3. Company’s plan

4. Questionnaire

Collect the document after it’s completion

Forward it to project manager

Feed it in the computer as the database

Follow up as per conditions

Modes of Contact

Personal Contacts

References

Phone Calls

Guidance as per Unit Manager

*****

LIFE INSURANCE IS:51

39

10

0

10

20

30

40

50

60

Protection ofhuman asset valueagainst uncertainty

Tax benefit device Both

CATEGORY

R E S P O N S E S

MARKET SURVEY

From the survey it was drawn that life insurance is more a protection of

human asset value against uncertainty (conferred by 51 respondents) where

it is a tax saving option (being accepted by 38 respondents). Life insurance

is a service involving both these prerequisites as depicted by remaining 16

respondents. The following depicted this:

Protection of human asset value against uncertainty

(figures in %age) 51

Tax benefit device

(figures in % age) 33

Both (figures in % age) 16

75

25

01020304050607080

N O.

O F R E S P O N D E N T S

Yes No

RESPONSES

IS LIFE INSURANCE ESSENTIAL?

It has been observed and applied as a Life insurance is an essential service

and should be applicable to every one, as favored by considerable 78

respondents where it is not essential to an extent by 27 respondents from

the summer training project survey by putting forth the set questionnaire.

RESPONDENT'S QUALIFICATION

33%

10%

57%

Post graduate

Graduate

Senior secondary

When further enquired about the qualification of respondents, it was found

that 57% of the respondents were graduates, 33% were post graduates and

remaining 10% were of higher secondary out of total 105 respondents.

Further depicted in the following tabular representation : -

Post graduate

(in %age) 30

Graduate

(in % age) 59

Senior secondary

(in % age) 11

AGE QUALIFICAITON:

39%20%

6%

35%

18-25 age group

25 – 35 age group

35 – 45 age group

Above 45 age group

Further, the age qualification for agency recruitment, it was found that 39%

respondents were belonging to 18 – 25 age group, 35% were belonging to 25 –

35 age group where as 20% to 35 -45 age group and remaining 6% to above 45

age group. Also depicted in the following tale mentioned below: -

18-25 age group

(figures in %age) 41

25 – 35 age group

(figures in %age) 35

35 – 45 age group

(figures in %age) 18

Above 45 age group 6

CAUSES OF DISSATISFACTION

17%

16%

10%23%

34%

Low employment

Low earning / income

Low status

Huge capital investment

All of the above

Respondents had different views about the dissatisfaction from the present

status of working or occupation. Dissatisfaction has been depicted in a

table below and graphically above:

Low employment 24 Low earning 35 Huge capital investment 15

Low status 16 All of the above 10

ABOUT CAREER IN LIFE INSURANCE

55

45

0

10

20

30

40

50

60

70

Yes NoRESPONSES

N O.

O F

R E S P O N D E N T S

When asked about whether they would like to know about a glorified

career in life insurance agency where they can fulfill any and every desire

of their life, 59 respondents agreed while 46 respondents said No and will

see later sometime in future. It has been depicted that life insurance sector

should be promoted at the wide extent as it contribute to the economy as a

useful source beneficial for both nation as well as is citizens.

85

15

0

20

40

60

80

100N O

. O F

R E S P O N D E N T S

Yes No

RESPONSES

IS LIFE INSURANCE A NOBLE SERVICE?

Indeed Life insurance is a noble business as it provides a needful financial

support in the situation of fatal calamity where the family is deprived by

the fact to live in future and sustains their living. When surveyed about life

insurance as a noble service. 89 respondents agreed and believe that

insurance is a bettering service to human life and society as a whole where

as 19 respondents show disagreement.

18

41

0

10

20

30

40

50

N O.

O F R E S P O N D E N T S

Yes No

RESPONSES

ACCEPT LIFE INSURANCE AS A CAREER?

From the 59 respondents who agreed to know about the life insurance as a

career, 18 of them agreed to join HDFC Standard life insurance for agency

and come to the company fore more information whereas 41 still took time

to think and postponed to some future date. People are highly dissatisfied

from the earning, status and living standard they are sustaining at present

and would definitely like to make some additional source of earning and

for this agency for life insurance would prove a boon.

87

13

0

20

40

60

80

100R E S P O N D E N T S

Yes No

RESPONSES

IS LIFE INSURANCE INDUSTRY GROWING?

From all 105 respondents, 92 agreed that life insurance sector is a growing

concern and will grow at a rapid pace in future where as 13 took as a mere

stagnant industry. Financial services are growing at a tremendous pace as

people are urging to make their investment in lucrative opportunities and

therefore life insurance sector is playing a vital role in educating the people

to make their investment which could secure their future, needs and living

despite some fatal calamity that might or might not occur.

AGREE WITH PRIVATISATION OF LIFE INSURANCE?

70

30

01020304050607080

Yes NoRESPONSES

R E S P O N D E N T S

Among 74 respondents from 105 respondents favored the privatization of

the life insurance and perceive that the people of India will know be more

aware and knowledgeable with respect to life insurance than that in the past

50 years with the working of LIC.

The myth of LIC since it is a Government concern is still continue to

prevail even though people have become more advanced and they can

invest their hard earned money after undertaking their pros nad cons and

company position in the market.

*****

SWOT ANALYSIS

STRENGTHS

1. HDFC Standard life insurance offers a range of individual and group

insurance solutions.

2. HDFC Standard Life has the financial expertise required to manage

your long-term investments safely and efficiently.

3. The company has covered over 10,77,000 lives year ending March

31, 20012

4. Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year for

High service standards

5. Life insurance industry is a rapid growing and a nobler service

industry.

WEAKNESSES

1. LIC is prevalent and sustains even today a major source of

population.

2. Low number of offices and network and number of life insurance

agents.

3. Lack of knowledge and expertise.

OPPORTUNTIES

1. Life insurance has captured its mere15 – 20% growth therefore a

wide open untapped market is open to the company to develop, grow

and measure its success.

2. Still the number of companies are few and company has every

capabilities to grow and forward its performance areas to the widest

THREATS

1. People are hesitant to invest and put their hard earned money to the

private life insurance company with the fear of getting lost.

2. Belief towards LIC as it is a government corporation phobia is

continue to surmount the people of India despite lots of flaws and

development and liberalization of life insurance.

3. Alternative financial services such as mutual fund, banking services,

share and securities also pose problems and threats to the working of

the life insurance sector.

4. Illiteracy and unemployment also pose threat.

5. Rising real estate industry also pose threat as people are investing a

bulk of their money over to that industry.

*****

CONCLUSION

Summer training is a best example for a trainee to learn about the company

working, corporate culture under which is operating the functions. HDFC

standard life insurance is a life insurance company under which I gained a

significant knowledge with respect to life insurance, its importance and

applicability as well as undertook the task to recruit capable life insurance

advisors which is conducive for the company to grow with more prosperity.

What I taught in the management institute utilized them fruitfully leading to

the best advantage to the company and to the best experience for mine.

At far I can conclude that life insurance is a noble service which is very

important for every citizen to learn and realize its importance because this is

the only source which can remain the status where one is with the family bread

earner and ever when he is not.

With the growing financial sector I would like to opt this industry for my future

career advancement and as an opportunity to service this industry.

*****

RECOMMENDATIONS

Following are suggestions made for the benefits and augmentation ofthe sound working of the company – HDFC Standard life insurance:

1. Need to train and develop life insurance agents with more

comprehensive knowledge and skills to counter every queries of the

customer.

2. It is suggested that company should not left any stone unturned

towards sound advertisement and promotional measures on every

section whether it is printed, media or or air via radio.

3. It is also suggested that skilled management graduates need to be

places on sales and marketing of financial servies who can render

their best ideas for the accomplishment of the company goals and

objectives to the best extent.

4. Also, care need to be taken that every customer’s grievance should be

met with delight whether before purchase or after sales.

5. There should be an expansion measure for more offices and

6. Location of more centres for offices of the company be established

sop that company may grow its network.

7. there should more advanced measures are required to develop to

capture the needs of customer so that they can be inspire and

motivated to invest in the life insurance products being provided by

the HDFC Standard life insurance.

8. Life insurance Products should be made flexible so as to suit every

section of society.

*****

BIBLIOGRAPHY

Following are sources which helped me during my summer training:

BOOKS:

KOTHARI C.R.: Research Methodology Management, 3rd Edition

KOTLER PHILIP: Marketing Management” 11th Revised edition ,2002

GUPTA S.P.: Statistical Methods “Thirteen revised edition, 2001

MAGAZINES:

India Today

Business World

REFERENCES

Websites: -

www.hdfcinsurance.com

www.irdaindia.org

www.liccouncil.org

www.businessconnect.com

*****

QUESTIONNAIRE

Name: - ……………………………………………………………

Age:- ……………………………………………………………

Location: - ……………………………………………………………

Occupation: -……………………………………………………………

Q.1. What do you mean by life insurance?

a) Protection of human asset value against uncertainty

b) A sum received after death

c) Both

Q.2. Do you think life insurance is essential for every one?

a) Yes

b) No

Q.3. What is your qualification?

a) Post graduate

b) Graduate

c) Senior secondary

Q.4. Do you come under:

a) 18-25 age group

b) 25 – 35 age group

c) 35 – 45 age group

d) Above 45 age group

Q.5. What dissatisfied you most in your occupation

a) Low employment

b) Low earning / income

c) Low status

d) Huge capital investment

e) All of the above

Q.6. Would you like to know about a career in life insurance advisor

ship where you can fulfill every desire of your life?

a) Yes

b) No

Q.7 Do you perceive that life insurance business is a noble service

oriented business?

a) Yes

b) No

Q.8. Would you like to become or opt for life insurance advisor under

esteemed and prospering organization HDFC Standard Life

insurance?

a) Yes

b) No

Q.9. Do you agree that the life insurance business is a growing industry

and will grow and rapid pace in future?

a) Yes

b) No

Q.10. Do you favour the privatization of life insurance by the

Government where a significant number of companies now in the

market for life insurance to the customers with the alliance of

multinationals?

a) Yes

b) No

Suggestions: -1. ……………………………………………………………

2. ……………………………………………………………

3. ……………………………………………………………

4. ……………………………………………………………

5. ……………………………………………………………

HDFC STANDARD LIFE INSURANCE

GLOSSARY

Application for insurance: This is the form on where you state information and answer

questions from the insurance company about yourself and your history. This application

along with information from a medical examination, if taken, from your physicians, any

hospitals you may have visited and investigation are what's used by the insurance

company to decide whether or not to offer you life insurance and at what rate.

Accident Benefit: A rider or An add-on with a life policy. It compensates a

policyholder in the event of death or injury by accident

Annuity: An investment option that makes a series of regular payments to

an individual in exchange for a premium or a series of premia.

Appreciate: To grow in value

Asset: Everything owned or due to a person

Asset allocation: How your investments are spread across various asset classes

Beneficiary: The person(s) named in the policy to receive the life insurance

proceeds upon the death of the insured.

Bond: It is like an IOU. By buying a bond you loan money to a company, a

municipality, state or the Central Government

Bonus: The amount paid as return in a ‘with-profit’ policy. The bonus,

expressed as a percentage of the sum assured, is generally declared every

year. The amount is linked to the profits earned by the insurer. Depending

on the time of withdrawal, there are two kinds of bonuses – reversionary

and cash. A reversionary bonus can be encashed only on maturity of the

policy; a cash bonus can be withdrawn when declared

Budget: It is a tool used to monitor and control expenditures and purchases.

Cash (Surrender) Value: The amount that is available in cash for loans and

that may be available for withdrawals in a whole life insurance, universal

life insurance or survivorship life insurance policy. Accessing Cash

Surrender Value may reduce the death benefit and may increase the risk of

lapse.

Contestability, Contestable Clause: In insurance there is a clause, which

explains the conditions under which the insurer may contest or void the life

insurance policy. This contestability is for a limited period of time, which

in most states is two years. After that period of time the insurance

company cannot contest the policy.

Convertible Term Insurance: Term insurance which can be exchanged

(converted), at the option of the policyowner and without evidence of

insurability, for a whole life insurance policy or universal life insurance

policy.

Capital gains: Profit earned from the sale of stocks, mutual fund units and

real estate. Long-term capital gains arise from assets owned for more than a

year while short-term capital gains are made from assets owned for less

than a year.

Compound Interest: Interest computed on principal plus interest accrued

during the previous periods of the investment

Critical illness rider: A rider that provides a policyholder financial

protection in the event of a critical illness

Death benefit: The amount payable to the nominee on death of the

policyholder. The amount paid is the sum assured plus benefits applicable

(if any) less outstanding loans.

Declining term cover: A type of pure life protection insurance policy where

the premia remain the same while the life coverage keeps declining.

Disability / dismemberment benefit rider: A rider that provides for

additional cover in the event of disability, or dismemberment, of the policy

holder due to an accident

Dividends: Payments made by companies and mutual funds to shareholders

and unit-holders, respectively, from the income generated by it.

Dividend yield: The percentage of dividend paid on a share to the value of

the share.

Emergency fund: The money, in the form of liquid investments in bank

savings accounts, 2-in-1 accounts and liquid funds to take care of

emergencies like a job loss not covered by insurance policies.

Endowment plans: An insurance plan that provides a policyholder risk

cover and some return on investment.

Effective rate of interest: The true rate as against the nominal rate, which

may be incorrect.

Equity: The actual ownership interest in a specific asset or group of assets

Financial planning: It covers the essential elements of a person’s financial

affairs and is aimed at achieving a person’s financial goals.

Fixed deposit: Funds placed on deposit in a bank, company or post office at

a fixed rate of interest.

Face Amount: The amount stated on the face of the policy that will be paid

in case of death. It does not include additional amounts payable under

accidental death or other special provisions, or acquired through the

application of policy dividends.

Fixed-income investment: Any investment that provides a stated

percentage of value, say 6 per cent, on the invested amount.

Group Insurance: An insurance policy taken out by employers to provide

life cover to their employees. Cheapest form of insurance

Guaranteed additions: The amount paid as returns in assured-return

insurance plans. Guaranteed additions are expressed as a percentage of the

sum assured, with the amount payable being stated by the insurer at the

outset.

Grace Period: Life insurance premiums are due on a certain date, if you are

late in paying, policies allow a period of time where you can still pay your

premium and not lose your polcy. This is the grace period. Most policies

allow a grace period of 30 days from the due date. After the grace period,

if the premium is not paid, the policy can lapse i.e. be terminated by the

insurance company.

Insurability: Acceptability to the company of an applicant for insurance.

Where Insured or Insured Life: The person on whose life the policy is

issued.

Immediate annuity: An annuity that starts payments immediately after, or

soon after, the first premium is paid

Index fund: A scheme whose portfolio mirrors the progress of a particular

index, both in terms of composition and individual stock weight ages. It’s a

passive investment option, as a fund’s performance will mimic the index

concerned, barring a minor tracking error.

Insured: The policyholder

Insurer: The insurance company

Investments: Assets like fixed deposits, post office savings, bonds and

stocks that are acquired for the purpose of earning a return

Investment risks: The risks that your investments face. These include the

risk of interest rate fluctuations impacting your debt investments or the

prices of equities going down.

Key person life insurance: When one has a key person in a business

without whom the business would suffer financially, key person life

insurance is often purchased which helps to reimburse the company for the

business loss incurred by the death of this person.

Level Premium (Life Insurance): Life insurance for which the premium

remains the same from year to year. The premium is normally more than

the actual cost of protection during the earlier years of the policy and less

than the actual cost in the later years. The building of a reserve is a natural

result of level premiums. The payments in the early years, together with the

interest that is to be earned, serves to balance out the underpayment of the

later years.

Level term cover rider: A rider that increases the life cover in non-term

plans, up to a maximum of the sum assured on the base policy. The rider

offers death benefit along, and serves the need for extra protection for a

specified time period.

Life annuity: An annuity that makes regular income payments till the

policyholder is alive. On the policyholder’s death, all income payments

cease and there are no beneficiary benefits.

Liquidity: The quality of assets that can be easily and quickly converted

into cash without any, or significant, loss in value.

Loyalty additions: Additional benefits (other than guaranteed

additions/bonus) paid to policyholders on maturity of certain investment-

based insurance plans for staying on through its term.

Lock-in period: The period of time for which investments made in an

investment option cannot be withdrawn.

Life Expectancy: The average number of years remaining for an individual

to live shown at each age based on long term studies by insurance

companies. These statistics as shown on charts called mortality tables..

Life Insurance: A contract between an owner (often the insured person) and

a life insurance company that guarantees the payment of a stated amount of

money on the death of the insured.

Loan (Policy Loan): A loan made by a life insurance company from its

general funds to a policy owner on the security of the cash value of a

policy.

Market value: The monetary value an asset will fetch if sold in the market

today.

Maturity date: The date on which a policy term or fixed-income investment

like fixed deposit or bond comes to an end.

Money-back plans: A variant of endowment plans where survival benefits

are disbursed through the policy term, than paid lump sum.

Net asset value (NAV): A scheme’s NAV is its net assets (the market value

of the financial securities it owns minus whatever it owes) divided by the

number of units it has issued.

Nominee: The person(s) nominated by the policyholder to receive the

policy benefits in the event of his death.

Participative plans: ‘with-profit’ policy

Pension Plan: Investment products offered by insurance companies and

mutual funds that required the investor to make defined contributions over

regular periods, mostly every year. The contributions are invested

according to a pre-decided investment plan. At retirement, the

accumulation is paid out through regular pay-out options.

Periodic payment investments: Investment options that have payouts in

fixed intervals. For example, money-back life insurance policies.

Permanent partial disability: Permanent loss of any body part, one eye, one

limb or one finger or a toe, or injuries that render the insured in capable of

earning an income from the date of the accident onwards from any work,

occupation or profession.

Permanent total disability: Permanent loss of use of any two limbs, or

permanent and complete loss of sight in both eyes or any other injury that

renders the insured incapable of earning an income.

Policy: The legal document issued by an insurance company to a

policyholder that states the terms and conditions of an insurance contract.

Policyholder: The person who buys an insurance policy as insured.

Policy term: period for which an insurance policy provides cover

Post office schemes: Also known as Small Savings schemes, they are

offered at post offices and carry the highest returns among fixed income

instruments. Government backing makes these instruments like Public

Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas

Patra (KVP) and Post Office Monthly Income Scheme (POMIS) risk-free

Premium: The amount paid by the insured to the insurer to buy cover

Recurring deposit: This is offered both in post office and banks where you

are required to contribute a fixed amount ever month. It is a great tool for

making small and regular savings.

Revolving credit: A pre-established credit line, typically in a credit card,

against which a person may borrow to make purchases.

Riders: Additional covers that can be added to a life policy, for a cost

Sum assured: The amount of cover taken under a life insurance policy, it is

the minimum amount that will be paid on death of the policyholder during

the policy term.

Surrender value: The amount payable by the insurer to the owner of an

investment-based plan in case he opts to terminate the policy after three

years (the mandatory lock-in period) but before its maturity date.

Survival benefits: The amount payable to a policyholder under an

investment-based plan if he survives the policy term.

Temporary total disability: An injury that results from an accident and

renders a person immobile or affects his earning capacity temporarily.

Term plans: A plan that provides life cover for a specified period of time,

but no return on the premia paid

Terminal bonus: one-time bonus paid on maturity viawith-profit plan

Vesting date: It is a date signifying a milestone in a policy. In pension

plans, it is the date from which the policyholder starts receiving pension. In

children’s plans, it is the date from which a child becomes the owner of a

policy taken out in his name (generally, around his 18th birthday).

Waiver of premium rider: A rider that waives the premia payable on the

base policy and other riders in certain circumstances mostly related to

death, disability or injury. An important feature especially for investment

products such as children’s policies.

Wealth: The difference between the value of what you own (assets) and

what you owe (liabilities).

With-profit policy: An insurance plan in which the policyholder gets a

share of the insurer’s profits ( in the form of guaranteed additions / bonus).

Along with the sum assured.

Without-profit policy: An insurance plan in which the policyholder does

not get any share of the insurer’s profits

Whole-life plans: Class of life insurance policies that provide cover

through your lifetime.

Mutual life insurance company: A life insurance company owned by the

policyholders. Policyholders of a mutual life insurance company may

participate in the "divisible surplus" of the life insurance company as

owners. They can receive dividends, most commonly on whole life

policies, which can enhance the cash value, increase the insurance amount

or lower premiums.

Owner of a life insurance policy: A life insurance policy can be owned by

the insured person or an individual, a company or a trust with an insurable

interest in the insured person. Insurable interest means there would be a

financial loss by the owner in the event of the death of the insured person.

Paid-up Insurance: Insurance that will remain in force with no need to pay

additional premiums.

Participating Policy: A life insurance policy that is eligible for the payment

of dividends by the insurer (see also Dividend.)

Permanent Life Insurance: Any form of life insurance except term;

generally insurance that builds up a cash value, such as whole life.

Universal life and whole life are types of permanent life insurance.

Policy Owner: The person who owns a life insurance policy. This is usually

the insured person, but it may also be a relative of the insured, a partnership

or a corporation.

Premiums: Payments to the insurance company to buy a policy and to keep

it in force.

Renewable Term Insurance: Term insurance which can be renewed at the

end of the term, at the option of the policy owner and without evidence of

insurability, for a limited number of successive terms. The rates generally

increase at each renewal as the age of the insured increases.

Return of premium life insurance: Also known as return of premium term

life insurance, this is term life insurance for a period of time where one

receives a guaranteed return of premiums paid if you keep the policy for

the term period. For example, 20 year return of premium term would

guarantee a return of premium paid after you paid 20 years of premium.

Most of these policies also give a partial return of premium if you keep the

policy for a great part of the years.

Second to die life insurance: Life insurance that pays the benefit after two

people die. See survivorship life insurance in this glossary.

Stock life insurance company: A stock life insurance company is owned by

stockholders. Contrast this with mutual life insurance company.

Survivorship life insurance: Life insurance purchased on two individuals,

usually man and wife, where the life insurance benefit is paid after both

individuals have died. This type of life insurance became popular as a

solution to paying estate taxes. The estate tax law allowed a couple to

delay paying estate taxes until both had died.

Thus, survivorship life insurance became popular as a less expensive way

for heirs to pay estate taxes. The premiums are less than buying life

insurance on one life. By paying premiums now the theory is that one can

"pre-pay" the estate taxes because of the lump sum that comes in after the

second death. .

Term life Insurance: Term insurance is life insurance coverage for a

specified period of time. This can be at a guaranteed rate or in some cases a

guaranteed rate for a period of time and then a projected rate.

Term periods can be for 1 year, 5 years, 10 years, 15, 20 and even 30 years.

For example: 30 year level term would guarantee a level premium for 30

years based on a specified death benefit. Term life insurance is usually the

least expensive form of life coverage, at least initially. After the initial term

period of years, 5,10,15, 20, 30 etc. the policy could terminate or it can

renew at a higher premium.

If you are allowed to renew it at a higher premium (based on your then

attained age), it is called renewable term life insurance.

Universal life insurance: Universal life insurance is permanent life

insurance with premiums that are not guaranteed. To a certain degree one

can "design" a premium on this type of policy. Universal life insurance

often can be set up with a lower premium initially than whole life

insurance.

Premiums and values are based on projections of assumed interest rates, the

cost of insurance (also known as mortality cost) and the insurance

company's expenses. The actual premium paid may increase because

interest rates may go lower or the projected cost of insurance may increase.

Waiver of premium: This is an extra or add-in (called a rider in insurance

lingo) that can be added to most individual life insurance policies which

waives (allows you to stop paying) the payment after the insured person

has been disabled (as described and defined in the insurance policy) for a

specified period of time, usually six months. At that time, the six months

premium paid along with future premium payments are waived.