CHAPTER I

INTRODUCTION

1
INTRODUCTION
Insurance is a contract between two parties where by one party
called insurer undertakes in exchange for a fixed sum called premiums, to
pay the other party called insured a fixed amount of money on the
happening of a certain event.
Insurance is a protection against financial loss arising on the
happening of an unexpected event. Insurance companies collect premium
to provide for this protection. A loss is paid out of the premiums collected
from the insuring public and the insurance companies act as trustees to
the amount collected.
or example, in a life policy, by paying a premium to the insurer,
the family of the insured person receives a fixed compensation on the
death of the insured.
!imilarly, in car insurance, in the event of the car meeting with an
accident, the insured receives the compensation to the extent of damage.
Insurance is designed to safeguard oneself and one"s family against
possible losses on account of risks and perils. It provides financial
compensation for the losses suffered due to the happening of any
unforeseen event.
#y taking life insurance a person can have peace of mind and need
not worry about the financial conse$uences in case of any untimely death.
%ertain insurance contracts are also made compulsory by
legislation. or example, motor vehicles act 1&'' stipulates that a person
driving a vehicle in a public place should hold a valid insurance policy
covering act risks. Another example of compulsory insurance pertains
to the environmental protection act, wherein a person using or carrying
ha(ardous substances )as defined in the act* must hold a valid public
liability )act* policy.
+
Who provides Insurance?
In India, prior to liberali(ation insurance protection was made
available through public sector insurance companies, namely, life
insurance %orporation of India ),I%* and the four subsidiaries of -eneral
Insurance %orporation of India )-I%*.
#y the passing of the I./A #ill, the Insurance sector has been
opened up for private companies to carry on Insurance business.
Insurance contracts are based on good faith i.e. the details
furnished by the proposals are accepted in good faith and this will form
the basis of the contract.
Types of Life Insurance Poicies!
0erm ,ife Insurance
1ndowment Insurance
2hole ,ife Insurance
Ter" Life Insurance!
0erm ,ife Insurance furnishes protection for a limited number of
years ate the end of which the policy expires. 0he face amount of the
policy is payable only if the insured"s death occurs during the stipulated
term, and nothing is paid in case of survival. 0erm product prices are
more easily compared than prices of other life products as term policies
are usually simpler than other policies.
0ypes of 0erm ,ife Insurance3
,evel ace Amount
4on5,evel ace Amount
6
Endo#"en$ Life Insurance!
1ndowment policies, promises not only to pay the policy face
amount on the death of the insured during fixed term of years, but also to
pay the full face amount at the end of the term if the insured survives the
term.
0ypes of 1ndowment 7olicies3
!ingle 7remium 1ndowment 7olicy
!emi 1ndowment 7olicy
8odified 1ndowment 7olicy
Whoe Life Insurance!
2hole life insurance is intended to provide insurance protection
over one"s entire life time. I t provides the payment of the face amount
upon the insured"s death regardless of when death occurs. It is insurance
for the whole of the life.
0ypes of whole life Insurance3
9rdinary ,ife Insurance.
,imited 7ayment whole ,ife Insurance
%urrent Assumption whole ,ife Insurance
:nit5,inked ,ife Insurance.
;
O%&ECTI'E
1xamining a client"s personal situation, financial resources,
financial ob<ectives and financial problems in a comprehensive
manner.
/eveloping an impartial, integrated plan to utili(e the resources to
meet ob<ectives and solve problems, taking the steps to implement
that plan once approved by the client.
8onitoring the plan performance to take corrective action as
necessary to assure that results match the plan pro<ections.
0o find out how best an :nit ,inked 7lan can become a necessary
part of the financial planning for the individuals.
0o check that among the price of the premium, benefits of policy,
brand name the company has, which is more preferred by a person
to take insurance policy.
=
(e$hod of $he )$udy * Inves$i+a$ion
0he sample si(e is 1>>.
0his survey helps us to know what benefits are looked by the
consumer in Insurance 7roduct and awareness of 0A0A AI- ,ife
Insurance.
A structured $uestionnaire with multiple choice $uestions are given
to consumers of age group of +=5=>.
0he respondents are mostly corporate, professional, executives and
business men who like latest trends.
0he source of primary data is $uestionnaire consisting of 1>
$uestions.
0he secondary data has been taken from internet and books related
to insurance, marketing, and finance.
!cope of pro<ect is explanatory and descriptive study.
?
LI(ITATION)
The i"i$a$ions of $he s$udy are!
0he research is limited with in @yderabad city.
0he data is collected from the people having life insurance policy
only.
0he time period for the study is limited.
0he statistical report presented in the pro<ect is of year +>>;5+>>?
only. 0he updated report is not available.
In study of a unit linked plan as a part of financial planning and
customer preference in taking life insurance policy, price of the
policy is ma<orly considered because money is ma<or constraint for
each and every person.
9nly 0A0A AI- life insurance is chosen for analy(ing the
awareness of the company and study of unit linked plan and even
for studying the promotional activities role in educating the people
about company.
A
CHAPTER,II
RE'IEW O- LITERATURE
'
RE'IEW O- LITERATURE
8arketing research is defined as the !ystematic design,
collection, analysis, and reporting of data and findings relevant to a
specific marketing situation facing the company. According to 1!98A.
the world association of opinion and market research professionals.
A company can hire the services of a marketing research firm or
conduct research in creative and affordable ways such as3
1ngaging professors or students to design and conduct studies.
8any large companies hire summer trainees from management
institutions for cost effective market research year after year.
Awarding live pro<ects to 8#A students as part of their course
work is also a common practice.
8onitoring published information and actions systematically. 0his
may be done by examining news papers, web sites, and industry
reports and by visiting competitive outlets.
1ffective marketing research involves five steps. 0hey are3
!tep 13 define the problem and the research ob<ectives
!tep +3 collect the information
!tep 63 analy(e the information
!tep ;3 present the findings
&
!tep =3 make the decision.
Wha$ is Life Insurance?
Insurance is a contract between two parties where by one party
called insurer undertakes in exchange for a fixed sum called premiums, to
pay the other party called insured a fixed amount of money on the
happening of a certain event.
Insurance is a protection against financial loss arising on the
happening of an unexpected event. Insurance companies collect premium
to provide for this protection. A loss is paid out of the premiums collected
from the insuring public and the insurance companies act as trustees to
the amount collected.
or example, in a life policy, by paying a premium to the insurer,
the family of the insured person receives a fixed compensation on the
death of the insured.
!imilarly, in car insurance, in the event of the car meeting with an
accident, the insured receives the compensation to the extent of damage.
Why shoud you $a.e Insurance?
Insurance is designed to safeguard oneself and one"s family against
possible losses on account of risks and perils. It provides financial
compensation for the losses suffered due to the happening of any
unforeseen event.
#y taking life insurance a person can have peace of mind and need
not worry about the financial conse$uences in case of any untimely death.
%ertain insurance contracts are also made compulsory by
legislation. or example, motor vehicles act 1&'' stipulates that a person
1>
driving a vehicle in a public place should hold a valid insurance policy
covering act risks. Another example of compulsory insurance pertains
to the environmental protection act, wherein a person using or carrying
ha(ardous substances )as defined in the act* must hold a valid public
liability )act* policy.
Who provides Insurance?
In India, prior to liberali(ation insurance protection was made
available through public sector insurance companies, namely, life
insurance %orporation of India ),I%* and the four subsidiaries of -eneral
Insurance %orporation of India )-I%*.
#y the passing of the I./A #ill, the Insurance sector has been
opened up for private companies to carry on Insurance business.
Insurance contracts are based on good faith i.e. the details
furnished by the proposals are accepted in good faith and this will form
the basis of the contract.
Types of Life Insurance Poicies!
0erm ,ife Insurance
1ndowment Insurance
2hole ,ife Insurance
Ter" Life Insurance!
0erm ,ife Insurance furnishes protection for a limited number of
years ate the end of which the policy expires. 0he face amount of the
policy is payable only if the insured"s death occurs during the stipulated
term, and nothing is paid in case of survival. 0erm product prices are
more easily compared than prices of other life products as term policies
are usually simpler than other policies.
11
0ypes of 0erm ,ife Insurance3
,evel ace Amount
4on5,evel ace Amount
Endo#"en$ Life Insurance!
1ndowment policies, promises not only to pay the policy face
amount on the death of the insured during fixed term of years, but also to
pay the full face amount at the end of the term if the insured survives the
term.
0ypes of 1ndowment 7olicies3
!ingle 7remium 1ndowment 7olicy
!emi 1ndowment 7olicy
8odified 1ndowment 7olicy
Whoe Life Insurance!
2hole life insurance is intended to provide insurance protection
over one"s entire life time. I t provides the payment of the face amount
upon the insured"s death regardless of when death occurs. It is insurance
for the whole of the life.
0ypes of whole life Insurance3
9rdinary ,ife Insurance.
,imited 7ayment whole ,ife Insurance
%urrent Assumption whole ,ife Insurance
:nit5,inked ,ife Insurance.
1+
Co"posi$ion of Au$hori$y under IRDA Ac$/ 0111
As per the section ; of I./A ActB 1&&&, Insurance .egulatory and
/evelopment Authority )I./A, which was constituted by an act of
parliament* specify the composition of Authority
0he Authority is a ten member team consisting of
)a* a %hairmanC
)b* five whole5time membersC
)c* four part5time members,
Du$ies/ Po#ers and -unc$ions of IRDA
!ection 1; of I./A Act, 1&&& lays down the duties, powers and
functions of I./A.
1* !ub<ect to the provisions of this Act and any other law for the time
being in force, the Authority shall have the duty to regulate,
promote and ensure orderly growth of the insurance business and
re5insurance business.
+* 2ithout pre<udice to the generality of the provisions contained in
sub5section )1*, the powers and functions of the Authority shall
include, 5
a* issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registrationC
16
b* protection of the interests of the policy holders in matters
concerning assigning of policy, nomination by policy holders,
insurable interest, settlement of insurance claim, surrender value of
policy and other terms and conditions of contracts of insuranceC
c* specifying re$uisite $ualifications, code of conduct and practical
training for intermediary or insurance intermediaries and agentsC
d* specifying the code of conduct for surveyors and loss assessorsC
e* promoting efficiency in the conduct of insurance businessC
f* promoting and regulating professional organi(ations connected
with the insurance and re5insurance businessC
g* levying fees and other charges for carrying out the purposes of this
ActC
h* calling for information from, undertaking inspection of, conducting
en$uiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organi(ations
connected with the insurance businessC
i* control and regulation of the rates, advantages, terms and
conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the 0ariff
Advisory %ommittee under section ?;: of the Insurance Act,
1&6'C
<* specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers
and other insurance intermediariesC
k* regulating investment of funds by insurance companiesC
l* regulating maintenance of margin of solvencyC
m* ad<udication of disputes between insurers and intermediaries or
insurance intermediariesC
n* supervising the functioning of the 0ariff Advisory %ommitteeC
1;
o* specifying the percentage of premium income of the insurer to
finance schemes for promoting and regulating professional
organi(ations referred to in clause )f*C
p* specifying the percentage of life insurance business and general
insurance business to be undertaken by the insurer in the rural or
social sectorC
$* exercising such other powers as may be prescribedC
1=
A%OUT UNIT LIN2 PLAN
8ost insurers in the year +>>; have started offering at least a few
unit5linked plans. :nit5linked life insurance products are those where the
benefits are expressed in terms of number of units and unit price. 0hey
can be viewed as a combination of insurance and mutual funds.
0he number of units that a customer would get would depend on
the unit price when he pays his premium. 0he daily unit price is based on
the market value of the underlying assets )e$uities, bonds, government
securities, et cetera* and computed from the net asset value.
0he advantage of unit5linked plans is that they are simple, clear,
and easy to understand. #eing transparent the policyholder gets the entire
upside on the performance of his fund. #esides all the advantages they
offer to the customers, unit5linked plans also lead to an efficient
utili(ation of capital.
:nit5linked products are exempted from tax and they provide life
insurance. Investors welcome these products as they provide capital
appreciation even as the yields on government securities have fallen
below ? per cent, which has made the insurers slash payouts.
According to the I./A, a company offering unit5linked plans must
give the investor an option to choose among debt, balanced and e$uity
funds. If you opt for a unit5linked endowment policy, you can choose to
invest your premiums in debt, balanced or e$uity plans.
If you choose a debt plan, the ma<ority of your premiums will get
invested in debt securities like gilts and bonds. If you choose e$uity, then
a ma<or portion of your premiums will be invested in the e$uity market.
1?
0he plan you choose would depend on your risk profile and your
investment need.
0he ideal time to buy a unit5linked plan is when one can expect
long5term growth ahead. 0his is especially so if one also believes that
current market values )stock valuations* are relatively low.
!o if you are opting for a plan that invests primarily in e$uity, the
bu((ing market could lead to windfall returns. @owever, should the bu((
die down, investors could be left stung.
If one invests in a unit5linked pension plan early on, say when one
is +=, one can afford to take the risk associated with e$uities, at least in
the planBs initial stages. @owever, as one approaches retirement the
$uantum of returns should be subordinated to capital preservation. At this
stage, investing in a plan that has an e$uity tilt may not be a good idea.
%onsidering that unit5linked plans are relatively new launches,
their short history does not permit an assessment of how they will
perform in different phases of the stock market. 1ven if one views
insurance as a long5term commitment, investments based on performance
over such a short time span may not be appropriate.
:nit5linked life insurance offers the interesting option of
combining protection and tax advantages of life insurance with the
attractive prospects of investing in e$uities.
A unit5linked plan works on a minimum premium basis and not on
a sum assured one. Dou decide the amount you can contribute at regular
intervals. :,I7 offers you insurance cover till your insurance needs are
fulfilled, beyond that it becomes an investment avenue.
1A
Ho# $hey co"pare?
0o explain how :,I7 works we will compare @/% :,I7
1ndowment plan with @/% 1ndowment plan.
Pre"iu"
In case of3 :,I7, you pay a minimum premium of .s 1>,>>> per
annum irrespective of age and term of the policy. 7remiums levels can be
either reduced or increased if premiums have been paid regularly for
three years and the unit fund value is at least .s 1=,>>>. 0he flexibility of
increasing premium contributions in an existing account helps
policyholders manage their cash flows.
In normalEtraditional endowment plans the premium is calculated
on the basis of age and the term and the amount you pay, as premium
remains the same for the full term. 0he minimum premium is .s 1,=>>
annually.
)u" assured
0he sum assured depends on your age and the cover you take in
case of :,I7. /epending on your age at entry, you may choose between 6
levels of cover 5 low, medium or high.
In the traditional plan, the sum assured is calculated by age and
term of the policy to which premium factor is applied.
Top,ups
Apart from your regular contributions, in case of :,I7, you can
also make additional payments to increase the savings component. 0hese
1'
top5ups do not affect the sum assured. 4ormal endowment policy does
not offer you these benefits.
Inves$"en$
Dou choose the fund where you want to invest your money. @/%
offers a choice of five funds 5 li$uid, defensive, secure managed, secure
defensive and growth. 0he ,i$uid und is the least risky with investments
in bank deposits and short5term money market instruments. -rowth und
is the riskiest with an investment of up to 1>>F in e$uities.
In traditional insurance plans your money is invested keeping in
view the I./A specification i.e. minimum '=F in debt with the balance
in e$uities.
Char+es ?
As is the case with unit5linked plans, this plan, too, imposes
charges, on both the funds invested by the policyholder and by
cancellation of units. 0hese charges vary depending on the kind of
premium payment option chosen )single or regular*.
9ther charges include a fund management charge of >.'>F of the
fund value per annum, apart from a flat fee of .s 1= per month deducted
by cancellation of units
In case of :,I7, for the first + years the investment content rate is
A6F of the premium and for the remaining years &&F. .isk cover
charges )for death sum assured, critical illness, accidental death* are
charged for canceling units on each monthly charge date, based on the
personBs age at that time.
1&
In traditional plans, the charges are not disclosed. 0here is an
annual fee of .s. 1=> for regular premium policies and .s 6>> for single
premium ones.
Re$urns
In case of :,I7, in an eventuality you receive the sum assured or
fund value whichever is higher and on maturity the fund value. In normal
endowment plan, in either case you receive the same benefit i.e. the sum
assured and vested bonus.
In case you s$op payin+ pre"iu"s?
If this is in the first 6 years then in case of :,I7, on cancellation of
the policy before paying regular premium for 6 years, there is a charge of
+=F of the outstanding premiums due during this 65year period. In case
of normal endowment the policy lapses and nothing is paid back
If you stop paying premiums after 6 years, in :,I7 you have the
option to make policy paid up, provided the policy has accumulated
sufficient policy value. At present this amount is .s 1=,>>>. If the fund
value of a paid up policy falls below .s 1=,>>> then the policy is
cancelled and the fund value is returned to you. 0he risk cover continues
for the sum assured even though the policy has reached the paid up status.
In traditional plan the policy becomes a paid up policy.
(edicas
In both the plans the norms for medicals are similar i.e. medicals
are compulsory.
+>
Why Do 3ou Need Life Insurance?
0hat"s a common $uestion. 2hy would you need InsuranceG !imply put,
,ife brings with it many surprises, some pleasant and some not so and a
,ife Insurance 7lan ensures that you are better prepared to face
uncertainties. @owG In a number of ways3
Pro$ec$ion
Dou need life insurance to be there and protect the people you love,
making sure that your family has a means to look after itself after you are
gone. It is a thoughtful business concept designed to protect the economic
value of a human life for the benefit of those financially dependent on
him. 0hat"s a good reason.
!uppose you are suffering an in<ury that keeps you away from earningG
2ould you like to be a financial burden on your family, already losing out
on your salaryG 2ith a life insurance policy, you are protected. Dour
family is protected.
Re$ire"en$
,ife insurance makes sure that you have regular income after you retire
and also helps you maintain your standard of living. It can ensure that
your post5retirement years are spent in peace and comfort.
)avin+s and Inves$"en$s
Insurance is a means to !ave and Invest. Dour periodic premiums are like
!avings and you are assured of a lump sum amount on maturity. A policy
can come in really handy at the time of your child"s education or
marriageH #esides, it can be used as supplemental retirement incomeH
+1
Ta4 %enefi$s
,ife insurance is one of the best tax saving options today. Dour tax can be
saved twice on a life insurance policy5once when you pay your premiums
and once when you receive maturity benefits. 8oney saved is money
earnedH
:nit linked insurance plans are transforming into mutual funds. 2hich is better for
youG
Uni$ in.ed insurance or "u$ua fund?
2hich should you get, when both potentially do very similar things. A
mutual fund is a simple asset management company that pools investorsB
money and invests it with a view to maximising returns. A unit linked
plan is an insurance product that can be used as a mutual fund vehicle and
give market linked returns with almost nil protection or it can build in
protection along with market linked returns. Assuming that we are
comparing mutual funds with unit linked insurance plans with minimal
protection, which is betterG 0he answer to this lies in costs that the two
charge and the tax breaks available. And here lies the problem. 8utual
fund costs are simple, transparent and standardised and insurance costs
are like a noodle soup.
Wha$ are $hese cos$s?
1ver tried to pick a noodle out of soup with a forkG 2orking out costs of
insurance is a similar exercise, <ust when you think you have it, it slips
away. %osts vary across companies, across products in the same company
and within the product, across premium cut5offs, categories, tenures and
riders.
++
8utual fund costs, on the other hand, are simple, transparent and
common across product categories. ront end or entry loads )the upfront
deduction to take care of the distribution costs of a mutual fund* and exit
loads have a total common limit of A per cent of the the net asset value
)4AI*, though the industry norm in e$uity is + per cent entry load today.
Annual fees that a fund can charge is restricted to a maximum of +.= per
cent per year )this rate is according to slabs and reduces as the fund si(e
increases*. 0here are no other charges. @owever, there is no tax rebate on
a fund and though capital gains are exempt from tax for a year, its future
is uncertain. Insurance costs and benefits
#ecause of the complexity of the insurance product and the cost
differentiation we cannot tell you which product is the least cost. It
depends on what you buy. @owever, we will give a handle with which to
open the door to understanding unit linked costs. Dou will know what to
ask the agent and how to compare costs.
A uni$ in.ed produc$ #i have cos$s across five su5,heads!
06 Upfron$ cos$s6 0his is a percentage of your first premium that is
deducted before the money is deployed. 0hese costs can continue over
the life of the product or terminate in a few years.
+. Re+uar char+es6 0hese include the annual asset management
charges for managing your money and could include a per month
charge towards the insurance part of the policy.
6. )#i$chin+ cos$s6 0o switch, from one scheme within a plan to
another, may carry a charge.
;. E4i$ cos$s6 If you exit before a certain time period you may pay a
heavy charge for that.
=. O$her ad"inis$ra$ion cos$s6 !ome periodic costs can be loaded
under this head as well.
+6
9n the plus side insurance gets tax breaks. Insurance premium
gives you a tax rebate and the insurance lump sums are tax free
Rush for uni$,in.ed sche"es
9m Jotak 8ahindra ,ife Insurance has grossed .s +=5=> lakh ).s
+.=5= million* from high net worth individuals for its unit5linked offering
55 Jotak !afe Investment 7lan.
I%I%I 7rudential ,ife has seen an '' per cent surge in the top5ups
to its unit5linked policies in the second $uarter. And #irla !un ,ife
Insurance has seen a 1=A per cent growth in its unit5linked plans.
2hat does this meanG ,everaging the current bull run, cash5rich
policyholders are investing more than their annual premiums in unit5
linked insurance plans, thereby topping up the investment portion of the
policy.
K0here has been a surge in interest by high net worth individuals in
investment5related risk products,K says Abhay Aima, @/% #ank country
head, private banking.
:nit5linked plans are similar to mutual fund schemes, where the
premium is invested in various funds in keeping with policyholdersB risk
appetite.
!ome players allow for topping up the premium without affecting
the sum assured )value of the base policy*, allowing policyholders to
purchase more units.
:nlike traditional insurance products, unit5linked plans offer
transparency in returns in terms of net asset value and flexibility in
investment options in debt, e$uity and a mix of both.
+;
K!ome people are buying because of the bull run. #ut the growth is
largely due to the transparency and flexibility of the product,K she adds
@igh net worth individuals would like to protect themselves from
the market volatility and unit5linked plans offer a safety net unlike other
investment products, he adds.
1ven state insurer, the ,ife Insurance %orporation of India, has an
unit5linked pension plan in the offing.
K2e have received a lot of interest from individuals and corporates
for such a product.K 0oday, ,I% is aggressively positioning its earlier
unit5linked plan 55 #ima 7lus hoping it will account for five per cent of
the total business
(u$ua -und
A mutual fund is a company that brings together money from many
people and invests it in stocks, bonds or other assets. 0he combined
holdings of stocks, bonds or other assets the fund owns are known as its
portfolio. 1ach investor in the fund owns shares, which represent a part of
these holdings.
Uips co"parison7776#i$h "u$ua fund777
2hen it comes to comparison of :,I7 it has to be with a pure insurance
plan along with investments, whyG #ecause a :,I7 or :nit ,inked
Insurance 7lan is a combination of Insurance and Investment and
therefore the comparison has to be made with a pure insurance cover and
investments in 8utual fund. It all boils down to the charges and the actual
amount invested in the market.
+=
ULIP8s usuay have foo#in+ char+es 5ui$ in$o i$ !
a* :p5front %harges
b* 8ortality %harges ) %harges for providing the risk cover for life*
c* Administrative %harges
d* und 8anagement %harges
(u$ua -und8s have $he foo#in+ char+es !
a* :p5front charges ) 8arketing, Advertising, distributors fee etc.*
b* und 8anagement %harges ) expenses for managing your fund*
Ter" Insurance have $he foo#in+ char+es !
a* Dearly premium ) for risk cover*
b* !ervice charges
+?
A%OUT -INANCIAL PLAN
In general usage, a financia pan can be a budget, a plan for
spending and saving future income. 0his plan allocates future income to
various types of expenses, such as rent or utilities, and also reserves some
income for short5term and long5term savings. A financial plan can also be
an investment plan, which allocates savings to various assets or pro<ects
expected to produce future income, such as a new business or product
line, shares in an existing business, or real estate.
In 5usiness, a financial plan can refer to the three primary financial
statements )balance sheet, income statement, and cash flow statement*
created within a business plan. -inancia forecas$ or financial plan can
also refer to an annual pro<ection of income and expenses for a company,
division or department. A financial plan can also be an estimation of cash
needs and a decision on how to raise the cash, such as through borrowing
or issuing additional shares in a company.
2hile a financial plan refers to estimating future income, expenses
and assets, a financin+ pan or finance pan usually refers to the means
by which cash will be ac$uired to cover future expenses, for instance
through earning, borrowing or using saved cash.
Wha$ is financia pannin+7
inancial planning is the process of meeting your life goals through
the proper management of your finances. ,ife goals can include buying a
home, saving for your childBs education or planning for retirement.
+A
0he financial planning process as described by %7 #oard, consists
of six steps that help you take a Kbig pictureK look at where you are
financially. :sing these six steps, you can work out where you are now,
what you may need in the future and what you must do to reach your
goals.
0he process involves gathering relevant financial information,
setting life goals, examining your current financial status and coming up
with a strategy or plan for how you can meet your goals given your
current situation and future plans.
The %enefi$s of -inancia Pannin+
inancial planning provides direction and meaning to your
financial decisions. It allows you to understand how each financial
decision you make affects other areas of your finances. or example,
buying a particular investment product might help you pay off your
mortgage faster or it might delay your retirement significantly. #y
viewing each financial decision as part of a whole, you can consider its
short and long5term effects on your life goals. Dou can also adapt more
easily to life changes and feel more secure that your goals are on track.
+'
-inancia pannin+ process consis$s of $he foo#in+ si4 s$eps
1. Es$a5ishin+ and definin+ $he cien$,panner rea$ionship6
0he financial planner should clearly explain or document the services
to be provided to you and define both his and your responsibilities.
0he planner should explain fully how he will be paid and by whom.
Dou and the planner should agree on how long the professional
relationship should last and on how decisions will be made.
+. 9a$herin+ cien$ da$a/ incudin+ +oas6
0he financial planner should ask for information about your financial
situation. Dou and the planner should mutually define your personal
and financial goals, understand your time frame for results and
discuss, if relevant, how you feel about risk. 0he financial planner
should gather all the necessary documents before giving you the
advice you need.
6. Anay:in+ and evaua$in+ your financia s$a$us6
0he financial planner should analy(e your information to assess your
current situation and determine what you must do to meet your goals.
/epending on what services you have asked for, this could include
analy(ing your assets, liabilities and cash flow, current insurance
coverage, investments or tax strategies.
;. Deveopin+ and presen$in+ financia pannin+ reco""enda$ions
and;or a$erna$ives6
0he financial planner should offer financial planning
recommendations that address your goals, based on the information
you provide. 0he planner should go over the recommendations with
you to help you understand them so that you can make informed
decisions. 0he planner should also listen to your concerns and revise
the recommendations as appropriate.
+&
<6 I"pe"en$in+ $he financia pannin+ reco""enda$ions6
Dou and the planner should agree on how the recommendations will
be carried out. 0he planner may carry out the recommendations or
serve as your Kcoach,K coordinating the whole process with you and
other professionals such as attorneys or stockbrokers.
?. (oni$orin+ $he financia pannin+ reco""enda$ions6
Dou and the planner should agree on who will monitor your progress
towards your goals. If the planner is in charge of the process, she
should report to you periodically to review your situation and ad<ust
the recommendations, if needed, as your life changes.
-unda"en$as of -inancia Pannin+
Wha$ Is I$?
inancial planning is the process of solving financial problems and
achieving financial goals by developing and implementing a personali(ed
Kgame plan.K In order to be effective this KplanK must take into
consideration an individual"s overall picture. It must be3
coordinated
comprehensive
continuous
inancial planning is like all other phases of lifeC it involves choices
)pend no# or save for a$er?
Pay off e4is$in+ 5is or increase re$ire"en$ savin+s?
-ocus savin+s doars on shor$ $er" or on+ $er" +oas?
6>
A true financial plan does not focus one aspect or product, but instead
seeks to take all areas of planning into consideration when making
financial decisions.
Wha$ is Incuded?
%ash low 8anagement
0his aspect of planning deals with the day to day allocation of
incomeC and its effective use in paying for current living expenses
and in accumulating assets which will be used in meeting financial
goals.
0ax 7lanning and 8anagement
0his area focuses on the understanding of and application of
federal and state income tax law, estate and inheritance taxesC and,
when possible, minimi(ing these taxes.
.isk 7lanning and 8anagement
0his area of planning deals with the risk of losing life, income, or
property. It includes the use of insurance products and strategies.
Investment 7lanning and 8anagement
Almost everyone has accumulation goals for which investments
must be made and managed. 0hese could include buying a homeC
planning for collegeC or providing for retirement.
.etirement 7lanning and 8anagement
#y far the most common accumulation goal is the ability to
become financially independent. .etirement strategies encompass
61
the understanding of the !ocial !ecurity systemC employer5
sponsored retirement plansC and personal savings accumulation
plans.
1state 7lanning and 8anagement
0he final phase of planning is for the transfer of assets to our heirs
with minimi(ation of taxes and other costs.
Why Pan?
Anyone who has financial challenges to solve or financial goals to
achieve needs financial planning. inancial 7lanning can help to achieve
both greater wealth and financial security. Inade$uate or improper
planning can be financially disastrous. An uninsured loss can wipe out
accumulated wealthC insufficient savings for retirement can force a
reduced lifestyle andEor postponement of retirementC and improper tax
planning can result in higher than necessary taxes causing dollars to be
lost to an accumulation plan or to one"s heirs.
Why Do Peope -ai $o Pan?
0hey may feel they do not have enough income or financial assets
to consider planning.
0hey may believe that they are too youngEold to begin planning.
0hey may be reluctant to consider some of the less pleasant aspects
of planning such as thinking about death, disability, illness, etc.
0hey may believe that financial planning is too expensive
0hey may procastinate )0he 4umber 9ne .eason or ailure*
6+
The )$eps in -inancia Pannin+
Identify -oals and 9b<ectives
-ather the necessary data
Analy(e present situation and consider alternatives
/evelop strategies to achieve goals.
Implement the strategies
.eview and .evise periodically
66
CHAPTER, III
INDU)TR3 PRO-ILE AND
CO(PAN3 PRO-ILE
6;
INDU)TR3 PRO-ILE
0ype 7rivate Industry
%onglomerate
ounded 1'?' ounder)s* Lamset<i 0ata
@ead$uarters #ombay @ouse
8umbai, India Area served 2orldwide
Jey people 3 .atan 0ata
)%hairman*
IN)URANCE IN INDIA!
Insurance is a federal sub<ect in India. 0he insurance sector has gone through a
number of phases and changes. !ince 1&&&, when the government opened up the
insurance sector by allowing private companies to solicit insurance and also allowing
foreign direct investment of up to +?F, the insurance sector has been a booming
market. @owever, the largest life5insurance company in India is still owned by the
government.
HISTORY:-
In India, insurance has a deep5rooted history. Insurance in various forms has been
mentioned in the writings of 8anu )8anusmrithi*, Dagnavalkya )/harmashastra* and
Jautilya )Arthashastra*. 0he fundamental basis of the historical reference to insurance
in these ancient Indian texts is the same i.e. pooling of resources that could be re5
distributed in times of calamities such as fire, floods, epidemics and famine. 0he early
6=
references to Insurance in these texts has reference to marine trade loans and carriersB
contracts.
Insurance in its current form has its history dating back until 1'1', when 9riental ,ife
Insurance %ompany was started by Anita #havsar in Jolkata to cater to the needs of
1uropean community. 0he pre5independence era in India saw discrimination between
the lives of foreigners )1nglish* and Indians with higher premiums being charged for
the latter. In 1'A>, #ombay 8utual ,ife Assurance !ociety became the first Indian
insurer.
At the dawn of the twentieth century, many insurance companies were founded. In the
year 1&1+, the ,ife Insurance %ompanies Act and the 7rovident und Act were passed
to regulate the insurance business. 0he ,ife Insurance %ompanies Act, 1&1+ made it
necessary that the premium5rate tables and periodical valuations of companies should
be certified by an actuary. @owever, the disparity still existed as discrimination
between Indian and foreign companies. 0he oldest existing insurance company in
India is the 4ational Insurance %ompany ,td., which was founded in 1&>?. It is in
business.
0he -overnment of India issued an 9rdinance on 1&th Lanuary, 1&=? nationalising the
,ife Insurance sector and ,ife Insurance %orporation came into existence in the same
year. 0he ,ife Insurance %orporation ),I%* absorbed 1=; Indian, 1? non5Indian
insurers as also A= provident societiesM+;= Indian and foreign insurers in all. In 1&A+
with the -eneral Insurance #usiness )4ationalisation* Act was passed by the Indian
7arliament, and conse$uently, -eneral Insurance business was nationali(ed with
effect from 1st Lanuary, 1&A6. 1>A insurers were amalgamated and grouped into four
companies, namely 4ational Insurance %ompany ,td., the 4ew India Assurance
%ompany ,td., the 9riental Insurance %ompany ,td and the :nited India Insurance
%ompany ,td. 0he -eneral Insurance %orporation of India was incorporated as a
company in 1&A1 and it commence business on Lanuary 1sst 1&A6.
0he ,I% had monopoly till the late &>s when the Insurance sector was reopened to the
private sector. #efore that, the industry consisted of only two state insurers3 ,ife
Insurers ),ife Insurance %orporation of India, ,I%* and -eneral Insurers )-eneral
Insurance %orporation of India, -I%*. -I% had four subsidiary companies.
6?
2ith effect from /ecember +>>>, these subsidiaries have been de5linked from the
parent company and were set up as independent insurance companies3 9riental
Insurance %ompany ,imited, 4ew India Assurance %ompany ,imited, 4ational
Insurance %ompany ,imited and :nited India Insurance %ompany ,imited.
Industry structure :-
%urrently, a :!N;1 billion industry, India is the worldBs fifth largest life insurance
market and growing at a rapid pace of 6+56;F annually as per Life Insurance Council
studies.
%urrently, in India only two million people )>.+ F of the total population of 1 billion*
are covered under 8ediclaim, whereas in developed nations like :!A about A= F of
the total population are covered under some insurance scheme. 2ith more and more
private companies in the sector, the situation may change soon.
)peciaisa$ion !,
1%-%, 1!I% and AI% provide insurance services for niche markets. !o, their scope is
limited by legislation but en<oy special powers.
Acts :-
0he insurance sector went through a full circle of phases from being unregulated to
completely regulated and then currently being partly deregulated. It is governed by a
number of acts.
0he Insurance Act of 1&6'

was the first legislation governing all forms of insurance to
provide strict state control over insurance business.
,ife insurance in India was completely nationali(ed on Lanuary 1&, 1&=?, through the
,ife Insurance %orporation Act. All +;= insurance companies operating then in the
country were merged into one entity, the ,ife Insurance %orporation of India.
0he -eneral Insurance #usiness Act of 1&A+ was enacted to nationalise the about 1>>
general insurance companies then and subse$uently merging them into four
6A
companies. All the companies were amalgamated into 4ational Insurance, 4ew India
Assurance, 9riental Insurance and :nited India Insurance, which were head$uartered
in each of the four metropolitan cities.
:ntil 1&&&, there were not any private insurance companies in India. 0he government
then introduced the Insurance .egulatory and /evelopment Authority Act in 1&&&,
thereby de5regulating the insurance sector and allowing private companies.
urthermore, foreign investment was also allowed and capped at +?F holding in the
Indian insurance companies.
In +>>?, the Actuaries Act was passed by parliament to give the profession statutory
status on par with %hartered Accountants, 4otaries, %ost O 2orks Accountants,
Advocates, Architects and %ompany !ecretaries.
A minimum capital of :!N+> million).s.1>> %rore* is re$uired by legislation to set
up an insurance business.
Authorities :-
0he industry recogni(es examinations conducted by IAI )for actuaries*, III )for
agents, brokers and third5party administrators* and III!,A )for surveyors and loss
assessors*. 0A% is the sole data repository for the non5life industry.
I#AI gives voice for brokers while -I %ouncil and ,I %ouncil are platforms for
insurers.
AI-I1A, AII1A, AII1, AI,I%1, AI,I1A, ,I%9A, -I1AIA, -I1: and 4I2I
cater to the employees of the insurers..
The Indian Insurance Indus$ry!,
India insurance is a flourishing industry, with several national and international
players competing and growing at rapid rates. 0hanks to reforms and the easing of
policy regulations, the Indian insurance sector been allowed to flourish, and as Indians
become more familiar with different insurance products, this growth can only
6'
increase, with the period from +>1> 5 +>1= pro<ected to be the B-olden AgeB for the
Indian insurance industy.
India Insurance Poicies a$ a 9ance
Indian insurance companies offer a comprehensive range of
insurance plans, a range that is growing as the economy matures and the wealth of the
middle classes increases. 0he most common types include3 term life policies,
endowment policies, <oint life policies, whole life policies, loan cover term assurance
policies, unit5linked insurance plans, group insurance policies, pension plans, and
annuities. -eneral insurance plans are also available to cover motor insurance, home
insurance, travel insurance and health insurance.
/ue to the growing demand for insurance, more and more insurance
companies are now emerging in the Indian insurance sector.
India Insurance His$ory !,
0he history of the Indian insurance sector dates back to 1'1', when the 9riental ,ife
Insurance %ompany was formed in Jolkata. A new era began in the India insurance
sector, with the passing of the ,ife Insurance Act of 1&1+.
0he Indian Insurance %ompanies Act was passed in 1&+'. 0his act empowered the
government of India to gather necessary information about the life insurance and non5
life insurance organi(ations operating in the Indian financial markets.
0he 0riton Insurance %ompany ,td formed in 1'=> and was the first of its kind in the
general insurance sector in India. 1stablished in 1&>A, Indian 8ercantile Insurance
,imited was the first company to handle all forms of India insurance.
Indian Insurance! )ec$or Refor"
6&
0he formation of the 8alhotra %ommittee in 1&&6 initiated reforms in the Indian
insurance sector. 0he aim of the 8alhotra %ommittee was to assess the functionality
of the Indian insurance sector. 0his committee was also in charge of recommending
the future path of insurance in India.
0he 8alhotra %ommittee attempted to improve various aspects of the insurance
sector, making them more appropriate and effective for the Indian market.
0he recommendations of the committee put stress on offering operational autonomy
to the insurance service providers and also suggested forming an independent
regulatory body.
0he Insurance .egulatory and /evelopment Authority Act of 1&&& brought about
several crucial policy changes in the insurance sector of India. It led to the formation
of the Insurance .egulatory and /evelopment Authority )I./A* in +>>>.
0he goals of the I./A are to safeguard the interests of insurance policyholders, as
well as to initiate different policy measures to help sustain growth in the Indian
insurance sector.
0he Authority has notified +A .egulations on various issues which include
.egistration of Insurers, .egulation on insurance agents, !olvency 8argin, .e5
insurance, 9bligation of Insurers to .ural and !ocial sector, Investment and
Accounting 7rocedure, 7rotection of policy holdersB interest etc. Applications were
invited by the Authority with effect from 1=th August, +>>> for issue of the
%ertificate of .egistration to both life and non5life insurers. 0he Authority has its
@ead Puarter at @yderabad.
Pro$ec$ion of $he in$eres$ of poicy hoders!
I./A has the responsibility of protecting the interest of insurance policyholders.
0owards achieving this ob<ective, the Authority has taken the following steps3
I./A has notified 7rotection of 7olicyholders Interest .egulations +>>1 to
provide for3 policy proposal documents in easily understandable languageC
;>
claims procedure in both life and non5lifeC setting up of grievance redressal
machineryC speedy settlement of claimsC and policyholdersB servicing. 0he
.egulation also provides for payment of interest by insurers for the delay in
settlement of claim.
0he insurers are re$uired to maintain solvency margins so that they are in a
position to meet their obligations towards policyholders with regard to
payment of claims.
It is obligatory on the part of the insurance companies to disclose clearly the
benefits, terms and conditions under the policy. 0he advertisements issued by
the insurers should not mislead the insuring public.
All insurers are re$uired to set up proper grievance redress machinery in their
head office and at their other offices.
0he Authority takes up with the insurers any complaint received from the
policyholders in connection with services provided by them under the
insurance contract.
;1
CO(PAN3 PRO-ILE
0ype3 7ublic %ompany
%ompany !i(e 3 =>>151>,>>> employees
2ebsite3 http3EEwww.tata5aig.com
Industry 3 Insurance
ounded3 +>>1
CO(PAN3 O'ER'IEW
0ata AI- ,ife Insurance %ompany ,imited )0ata AI- ,ife* is a <oint
venture company, formed by 0ata !ons and AIA -roup ,imited )AIA*. 0ata AI- ,ife
combines 0ata"s pre5eminent leadership position in India and AIA"s presence as the
largest, independent listed pan5Asia life insurance group in the world spanning 1=
markets in Asia 7acific. 0ata !ons holds a ma<ority stake )A;F* in the company and
AIA holds +?F through an AIA -roup company. 0ata AI- ,ife Insurance %ompany
was licensed to operate in India on ebruary 1+, +>>1 and started operations on April
1, +>>1.
Ta$a 9roup
0he 0ata group comprises over &> operating companies in seven business
sectors3 communications and information technology, engineering, materials, services,
energy, consumer products and chemicals. 0he group has operations in more than '>
countries across six continents, and its companies export products and services to '=
countries. 0he total revenue of 0ata companies, taken together, was N?A.; billion
)around .s61&,=6; crore* in +>>&51>, with =A per cent of this coming from business
outside India. 0ata companies employ around 6&=,>>> people worldwide. 0he 0ata
name has been respected in India for 1;> years for its adherence to strong values and
business ethics. 1very 0ata company or enterprise operates independently. 1ach of
these companies has its own board of directors and shareholders, to whom it is
;+
answerable. 0here are +' publicly listed 0ata enterprises and they have a combined
market capitalisation of about N1>6.?A billion )as on 4ovember 11, +>1>*, and a
shareholder base of 6.; million. 0he ma<or 0ata companies are 0ata !teel, 0ata
8otors, 0ata %onsultancy !ervices )0%!*, 0ata 7ower, 0ata %hemicals, 0ata -lobal
#everages, Indian @otels and 0ata %ommunications.
AIA
0he AIA -roup ,imited )AIA* is the largest, independent listed pan5Asian
life insurance group in the world, with an unparalleled footprint spanning 1=
markets in Asia 7acific. 0he -roup has total assets of approximately :!N&>
billion and traces its roots in the region back more than &> years.
AIA meets the savings and protection needs of individuals and businesses by
offering a comprehensive suite of products and services covering life insurance,
retirement planning, accident and health insurance, as well as wealth management
solutions. 0hrough an extensive network of more than 6>>,>>> agents and over
+;,>>> employees across Asia 7acific, AIA serves the holders of over +6 million
individual policies and over 1> million participating members of group policies.
AIA has branch offices, subsidiaries and affiliates located in <urisdictions
across the region including @ong Jong, India, Indonesia, %hina, 8alaysia, the
7hilippines, !ingapore, !outh Jorea, 0aiwan, 0hailand, Iietnam, Australia, 4ew
Qealand, 8acau and #runei.
9:. /I!0.I#:09.!
1* Agents
+* %orporate Agents
6* 0erminated Agents
Cai"s !,
As an insurance company it is our priority and assurance to our policy holderBs
to process their claims speedily and in best possible manner while keeping their well5
being in mind always.
;6
0o service you better in times of emergency, please inform us immediately upon
occurrence of the incident or loss.
Career = Ta$a AI9 Life !,
/ynamism defines the life Insurance sector.
At 0ata AI- ,ife, we are continuously looking at life from
newer perspectives3 understanding the financial behavior of Indian customers,
anticipating financial protection needs, blending wealth creation with financial
protection and most importantly designing insurance solutions that anticipate the
customerBs needs and answers them.
Life Needs )ou$ions !,
2e understand how important your family is to you and how hard you
work for them 5 be it a comfortable lifestyle, a good education, healthy living,
peaceful retirement or even planning for those unexpected events, that surprise
us when we least expect it.
At 0ata AI- ,ife, our aim is to support you on the days when you need that
extra push. 2ith our comprehensive and innovative range of insurance products,
you"ll not only have the financial cover to meet all your needs head on but also the
confidence to leap higher.
9roup Insurance !,
As a corporation your employees are your biggest assets. It is a
priority to imbibe a feeling of security and well being, appreciation and constant
motivation in the minds of the employees.At 0ata AI- ,ife, we understand that an
important way of doing this is by sharing the employeeBs responsibility of saving for
the future. 9ur comprehensive range of group insurance solutions offers protection
and security to your employees and their loved ones.
;;
E"poyee %enefi$s 35
0he %orporate !olutions51mployee benefits is a range of corporate
insurance plans of solutions to employers of all si(es, ranging from !81, local
enterprises to multinational companies. 0he insurance solution provides cover not
only in case of mortality but also provides security and benefit in case of terminal
illness, which is payable in advance of any eventuality.
At 0ata AI- ,ife 9ur team of corporate solution specialists are well trained to deliver
top $uality service and solutions from client servicing, actuarial reserving and
reporting.
Credi$ Life !,
%redit ,ife Insurance 7lans are developed to offer comprehensive protections to
organi(ations E groups issuing credit to itBs customers such as home loan, personal
loan, auto loan, education loan and credit cards etc.
%redit ,ife Insurance 7lans are flexible and can be tailor made to meet the uni$ue
re$uirements of the product segment and the characteristics of the group.
2e also offer other -roup Insurance 7lans that can be value proposition for the
organi(ations and their customers. It includes life and health insurance plans that offer
to provide comprehensive coverage to the customers of the group policyholder.
9roup Pensions !,
0ata AI- ,ife is the first private insurance company to offer -roup 7ensions products
in IndiaR.
0ata AI- ,ifeBs und 8anagement process follows an approach that ensures excellent
fund management and strict compliance to internal and external regulations. 2e have
a strong In5house und 8anagement 0eam and a #oard ,evel Investment %ommittee
that takes decisions with regard to your investments. 9ur Actuarial and %ompliance
teams ensure internal and external compliance to issues like investment procedures
and solvency margin.
;=
(icro Insurance !,
Insurance is an important savings tool for people living in small towns
and villages. 0he nature of their <ob exposes them to numerous financial risks making
them vulnerable to heavy losses. 8oreover, an unfortunate demise of the principle
wage earner or disability due to illness or accident can be devastating in most families
as it can wipe out their savings leaving them without any resources to start over.
8icro Insurance products from 0ata AI- ,ife can help reduce the effects of
financial losses by providing ade$uate financial cover. 0hese products, which
simplify the product offerings and provide financial security, are specially
designed to meet the needs of low income groups by offering benefits like low
premiums, simple policy terms and exclusions and no medical examination
0ata AI- ,ife 4avkalyan Do<ana
0ata AI- ,ife Ayushman Do<ana
0ata AI- ,ife !ampoorna #ima Do<ana
0ata AI- ,ife !umangal #ima Do<ana
0ata AI- ,ife 4avkalyan Do<ana
0ata AI- ,ife 4avkalyan Do<ana
0ata AI- ,ife 4avkalyan Do<ana is a non5participating, life insurance protection
plan without any maturity benefit. 2hatBs more, to safeguard against other
uncertainties in life, the policyholder can add the 0ata AI- ,ife Accidental /eath
#enefit .ider):I43 11>%>>6I>1* to this product at a nominal extra cost.
;?
A non participating single premium plan, 0ata AI- ,ife Ayushman Do<ana is ideal
for rural population who have seasonal income. 2ith payment of a single
premium at the beginning of policy term, a person will be insured for 1> years.
#esides being insured, the policyholder, upon maturity of the policy receives
1+=F of the single premium paid.
0ata AI- ,ife !ampoorna #ima Do<ana is a non5participating, affordable term
insurance plan, which apart from providing security of life insurance cover also
guarantees refund of all premiums upon survival till the term of the policy. In this
plan you pay premiums only for 1> years, where as you en<oy the coverage up to
1= years.
0o encourage saving from individuals who prefer getting periodic returns, 0ata
AI- ,ife brings an insurance plan that goes hand in hand with regular savings.
0ata AI- ,ife !umangal #ima Do<ana, a non5participating limited premium
payment money back plan, gives guaranteed returns
R
at specified intervals during
term of the policy besides an insurance cover for 1= years.
;A
7lanning 0ools 35
9ur planning tools help you effectively calculate your financial need to secure your
future. :se our set of similar premium calculators and find out how much insurance
cover is needed by you.
2no#ed+e Cen$re
9ur Jnowledge %entre simplifies all the concepts of life insurance in an easy and
lucid manner. 0he glossary educates about basic terms of life insurance, while the
APs section answers all $ueries and gives you detailed information about each and
every category of ,ife Insurance sector.
PRODUCT)
0erm
0ata AI- ,ife Assure 9ne yearE ive DearsE1> DearsE 1= Dears E +> Dears E +=
Dears ,ifeline 7lans, and 0erm to age ?> known as Assure ,ifeline to Age ?>
0ata Aig ,ife .aksha 8oneyback
0ata AI- ,ife Assure +1 years 8oney !aver
7ension
0ata AI- ,ife 4irvana
0ata AI- ,ife 4irvana 7lus
@ealth
0ata AI- ,ife @ealth irst
0ata AI- ,ife @ealth Investor
0ata AI- ,ife @ealth 7rotector 5 = Dear -uaranteed .enewal Accident and
@ealth 7lan
0ata AI- ,ife @ospi %ash#ack
;'
1ndowment
0ata AI- ,ife Assure 1> Dears E +> Dears E 6> Dears !ecurity O -rowth 7lans
0ata AI- ,ife Assure -olden Dears 7lan
0ata AI- ,ife !hubhlife
2holelife
0ata AI- ,ife 8ahalife -old
Annuity
0ata AI- ,ife 1asy .etire
%hildren
0ata AI- ,ife Assure %areer #uilder
0ata AI- ,ife Assure 1ducare at 1' O Assure 1ducare at +1
0ata AI- ,ife !tarkid
:nit ,inked
0ata AI- ,ife InvestAssure !uperstar
0ata AI- ,ife InvestAssure !ampatti
0ata AI- ,ife InvestAssure InstaS
0ata AI- ,ife InvestAssure 9ptima 7lus
0ata AI- ,ife InvestAssure !warna Leevan 7lus
Ta$a AI9 Life Insurance
areas of business T location
0ata AI- ,ife Insurance %ompany )0ata AI- ,ife* is a <oint
venture between 0ata !ons and the AIA -roup )AIA* that started
operations in India on April 1, +>>1. 0ata !ons holds a ma<ority
;&
stake )A; per cent* in the company and AIA holds +? per cent
through an AIA group company.
Areas of 5usiness
0he company offers a comprehensive suite of products and
services to individuals, groups and corporate houses.
,ife insurance solutions3 1ndowment and term, pension,
group life, money back and whole life plans.
8icro insurance3 %ustomi(ed to the needs of
underprivileged sections of society.
Accident and health insurance.
.etirement planning.
2ealth management solutions.
Loca$ion
0he company is head$uartered in 8umbai and has 6?> sales
offices in +A= cities and towns across India.
0ata companies have
operations in every ma<or international market
A.I%A
A!IA 7A%II%
%@I4A
1:.971
8I//,1 1A!0
49.0@ A81.I%A
!9:0@ A81.I%A
:4I01/ JI4-/98
Ta$a su5 +roups
7roducts !teel
Automobiles
0elecommunications
!oftware
@otels
%onsumer goods
0ata insurance
=>
0ata 8otors
0ata %onsultancy !ervices
0ata 0echnologies
0ata 0ea
0itan Industries
0ata 7ower
0ata %ommunications
0ata 0eleservices
0ata Auto%omp !ystems ,imited
0ata @otels 2ebsite 0ata.com
Revenue
.evenue 61&,=6; crore ):!N?&.6; billion* 7rofit ',+;> crore ):!N1.A& billion*
0otal assets :!N =+.' billion )+>>&51>* 1mployees 6&?,=1A )+>>&51>* !ubsidiaries
0ata !teel
CHAPTER I'
DATA ANAL3)I) AND
INTERPRETATION
=1
ANAL3)I) O- DATA
1. 2hich company you have ,ife Insurance 7olicyG
POLICY IN AN INSURANCE COMPANY
Insurance
Company
No.of Policy
Holders
% of policy holders
LIC 65 65%
ICICI 10 10%
TATA AI 1! 1!%
H"#C 5 5%
$%hers & &%
=+
In$erpre$a$ion !
rom the above sample graph and table, we can understand that
most people opt and have insurance in ,I% ?=F. 0he Insurance
%ompanies which people opt apart from ,I% are 0A0A AI-51+F,
I%I%I51>F, @/%5=F and others5'F.
+. Among various Insurance %ompanies, why did you chose the
above mentioned companyG
Reason for choosin+ an Insurance Co"pany
Reason Fof .esponses
.eputation 6>F
7rice of premium 1+F
#enefits ;+F
flexible premium
payment options 1?F
=6
In$erpre$a$ion!
@ere the reason for choosing a particular Insurance %ompany is
evaluated. 8ost people prefer an Insurance %ompany because of the
benefits of 7olicy offered by company. 0he next preference is given to
reputation the company has in the market.
0he minimum importance is given to flexible payment options and price
of premium.
6. Is premium price of policy within your budget or notG

#i$hin 5ud+e$ no$ #i$hin 5ud+e$
7remium price A+ +'
=;
In$erpre$a$ion!
9ut of total 1>> samples A+F responded that the price of premium they
paying towards ,ife Insurance is within their budget, and remaining +'F
said that premium price is not within their budget.
;. /o you know about :nit ,inked ,ife Insurance 7lanG
Awareness of :,I7
Des 4o
=A ;6
==
In$erpre$a$ion3
9ut of total 1>> samples =AF responded that they know about :,I7!,
and remaining ;6F said that they do not know about :,I7s.
=. 2hat is the best option of investmentG
#est 9ption of Investment
0ype of Investment
4o. of
.esponses
:nit ,inked 7lan 1;
,ife Insurance 6=
8utual und +=
!hare 8arket +?
=?
In$erpre$a$ion!
9ut of 1>> samples 6=F of respondents believe that best option is
investing in ,ife Insurance, +? F responded with share market, +=F
responded that 8utual unds are best and 1;F respondents are saying
:,I7! is the best option for investment.
?. @ow much percentage of your salary are you saving monthlyG
Annua )avin+s in Inco"e
> of savin+s Responden$s
1>F5+>F ?>
+>F56>F +=
6>F5;>F 1>
;>F5=>F =
=A
In$erpre$a$ion!
rom the above chart, it is clear that out of 1>> samples, ?> percent of
people are saving 1>F5+>F of their annual income, +=F of people are
saving +>F56>F , 1>F people are saving 6>F5;>F, and remaining =F
people are saving ;>F5=>F of their annual income.
A. 2hat is your expected price of premium of the policyG
1xpected 7remium per Annum
7remium 7rice 4o.of .espondents
less than
.s.=>>> ++
.s.=>>>5 ?6
='
.s.1>>>>
8ore than
.s.1>>>> 1=
In$erpre$a$ion!
9ut of 1>> samples, the expected price of premium per annum
is less than .s. =>>> for ++F of people, .s. =>>>5.s.1>>>> for
?6F of people and more than .s. 1>>>> for 1=F people.
'. /o you find advertisement of 0A0A AI- ,ife Insurance is
informative or attractiveG
Ads of 0A0A AI-
4o.of .esponses
Informative 6=
attractive ?=
=&
In$erpre$a$ion!
9ut of 1>> samples ?=F of people found that advertisement of
0A0A AI- ,ife Insurance are attractive, and remaining 6=F
found that they are informative.
&. 2hich promotional media do you think is the best one to
make people educate about an Insurance 7olicyG
#est Advertisment
0ype of
7romotional
Activity 4o. of .espondents
0I 6'
?>
advertisement
@oardings +>
7aper
Advertisement 6+
#anners 1>
In$erpre$a$ion!
9ut of 1>> sample 6'F of people responded that 0I
advertisement is the best way for making people aware of
insurance, 6+F said that paper advertisement is better way, +>F
of people said that @oarding are better, remaining 1>F said
banners are helpful in making people aware of insurance.
1>. /o you suggest your colleagues, relatives or any of your
friends about which is the best company to opt for an Insurance
7olicyG
!uggesting an Insurance %ompany
Des 4o
4o. of
respondents '' 1+
?1
In$erpre$a$ion!
rom the data and analysis it is found that ''F of people
suggested about insurance to their friends, colleagues and
relatives, and remaining 1+F people are not suggested.
?+
CHAPTER,'
-INDIN9)/ RECO((ENDATION)
AND CONCLU)ION)
-INDIN9)
rom the pro<ect study and interpretation the findings are as follows3
1* 9ur country India has a population of 11A crore and there are only
1+ crore people have life insurance policy.
?6
+* 9ut of 1>> samples, ?=F people have insurance policy in ,I% and
remaining 6=F people have insurance policy in other insurance
companies.
6* 8ost people have trust in ,I% than any other insurance company
and still ,I% holds huge market share in ,I1 I4!:.A4%1 sector
in India.
;* '+F people are taking insurance policy only if it is within their
budget and have flexible payment options and remaining is taking
policy if it is not with the budget but due to benefits of policy and
reputation company has.
=* Among various factors ==F of people are looking for benefits of
policy, +=F people are looking for premium of policy and
remaining +>F people are looking for brand name of insurance
company.
?* 9nly 1>F of people are saving 61F to ;>F of their income, +>F
people are saving +1F to 6>F, A>F people are saving 1F to +>F
of their income.
A* As there are many new players in the Indian market, there is huge
competition among all insurance companies.
'* 9nly ?=F people are aware of 0A0A AI- life insurance and 6=F
people don"t know about 0A0A AI- life insurance.
&* 8ostly corporate people, professionals and business man are aware
of 0A0A AI- life insurance in India. %ommon man )middle class
and lower class* is not aware of 0A0A AI- life insurance.
?;
1>* +=F people gave response stating that advertisement of 0A0A AI-
life insurance are attractive and informative and A=F people
responded stating that 0A0A AI- life insurance advertisement are
not attractive and not informative.
11* 9ut of 1>> respondents, 6'F stated that 0I advertisements is the
best way for making people aware insurance company, 1;F stated
that setting up of stalls is the better way, 1>F stated that paper
advertisement is the better way, =F stated that banners, pamphlets
is the better way and 66F people stated that personal setting is the
best way of making people aware and educate them about
insurance company and its policies.
RECO((ENDATION)
1. 0here is huge potential market for ,I1 I4!:.A4%1 companies
in India as out of 11> crore population only ' crore people are
insured. 0he insurance companies should educate people about
?=
insurance, its importance, different policies, and benefits of
policies.
+. 0he people opt for policy by taking into consideration price of
premium of policy, benefits of policy and least importance is given
to brand name. !o the life insurance companies should look over
the price of premium, benefits of policy and even flexible payment
options from the point of untapped potential market in India.
6. 0he price of premium of a policy must be within the budget of
common man and life insurance companies should provide flexible
payment options. #y doing so, the private insurance companies can
surely capture the untapped market along with creating brand
name.
;. 0A0A AI- life insurance, it has huge past experience around the
world. #ut coming to Indian perspective its positioning is not
properly done in the customers mind. 0he advertisement of 0A0A
AI- life insurance in 0I should contain briefly relevant message
about its policy and benefits of a policy. It should formulate
strategies for attracting customers though good promotional
activities and informative ads, so that common man can have an
idea of what 0A0A AI- is offering in a policy.
=. 0hough people generally to do the savings by various means, like
7ost 9ffice, ixed /eposit, 8utual und, -old, .eal 1state, and
!hare 8arket etc. 0his study focuses attention on the positive
affect of :nit ,inked 7lan as a part of inancial 7lanning.
?. 0he result of the study proves that :,I7! can enhance the
individual"s savings through their market investments. 0he study
highlights :,I7! as a part of 0ax #enefit for an individual. 0A0A
AI- :,I7! products are good when taken as long term investment
plans
??
CONCLU)ION)
rom the pro<ect analysis and interpretation the conclusions are3
1* 8ost untapped insurance market in India contains mostly middle
class and lower class people.
?A
+* 0he customers gives preference more to premium of policy and
benefits of the policy. #rand name and flexible payment options
are given less importance.
6* 1ven though the premium price is not within the customer budget,
if the benefits offered by policy are good customers is ready to take
the policy.
;* 0he customers want the premium price to be within the budget,
with good benefits.
=* 0he private insurance companies are unable to tap the untapped
insurance market certain strategies should be formulated to grab
the market.
?* 8ost customers feel that setting up of stalls at appropriate locations
and providing information regarding various policies and benefits
offered by the insurance company and create awareness about the
insurance company.
A* 0A0A AI- has an international brand image by their world wide
advertisement like formula one race and many other sports events
still it need to implement more marketing advertisement to attract
the customers.
'* 0he present study is an attempt to find the unit linked plan as a part
of financial planning, moreover to determine whether the unit
?'
linked plan would help the people to avail the tax benefit,
protection, and savings.
?UE)TIONNAIRE
A study of :nit ,inked ,ife Insurance plan as a part of financial
planning
Pease fi $he foo#in+ de$ais6
Na"e!
?&
A+e!
9ender!
?uaifica$ion!
Desi+na$ion!
)aary!
Na"e of $he Or+ani:a$ion @Wor.in+A!
Phone No6!
E"ai ID!
1. In which company you have ,ife Insurance 7olicyG
a* ,I% U V
b* 0A0A AI- U V
c* @/% U V
d* I%I%I U V
e* 9thers U V
+. Among various insurance companies why did you chose the above
mentioned company
a* /ue to reputation of the company U V
b* /ue to 7rice of premium of policy U V
c* /ue to benefit of the policy U V
d* lexible premium payment options U V
6. Is the premium within your budget
a* Des U V
b* 4o U V
;. /o you know about :nit ,inked ,ife Insurance 7lanG
a* Des U V
b* 4o U V
A>
=. 2hat is the best option of investmentG
a* :nit ,inked 7lan U V
b* ,ife Insurance U V
c* 8utual und U V
d* !hare 8arket U V
?. @ow much percentage of your salary are you saving monthly
a* 1>F5+>F U V
b* +>F56>F U V
c* 6>F5;>F U V
d* ;>F5=>F U V
A. what is your expected price of premium of the policy
a* ,ess than .s.=>>> U V
b* .s.=>>> to .s.1>>>> U V
c* more than .s.1>>>> U V
'. /o you find advertisement of 0A0A AI- life insurance are
informative and attractive
a* Informative U V
b* Attractive U V
&. 2hich promotional media do you think is the best one to make
people educate about an insurance policy
a* 0I advertisement U V
A1
b* @oardings U V
c* 7aper advertisement U V
d* #anners U V
1>./id you suggest your colleagues, relatives or any of your friends
about which is the best company to opt for an insurance policy
a* Des U V
b* 4o U V
If yes which company you suggestedG
%I%LIO9RAPH3
2ebsites3
www.google.com
www.0A0A AI-life.com
www.irdaindia.com
A+
www.bimaonline.com
www.marketresearch.com
#ooks3
,ife O @ealth Insurance
#y Jenneth #lack Lr., @arlod /. !kipper Lr.
8arketing 8anagement
#y 7hillip Jotler O Jevin ,ane Jeller
inancial 8anagement
#y 7rasanna %handra
A6