Summer internship Programme-2009

Reliance Money

Changing concepts of Life Insurance products from

traditional 1980’s to till date new plan.

ABSTRACT

This is the time of tough competition in the market, especially after the global
turmoil in the world economy that results in the slowdown of the various financial
sectors. Thus it is very important for the organizations to keep an eye on the
customers’ interest and preferences, and provide them the best facility than the
competitors so that organizations can retain the faith of the customers in the
services and products being provided to them.

The project titled-“Changing concepts of Life Insurance products from

traditional 1980’s to till date new plan.
This project will study the different rewards and schemes offered to its existing as
well as targeted customers of different companies.

Whether the insurer is old or new, private or public, expanding the market will
present multitude of challenges and opportunities. But the key issues, possible
trends, opportunities and challenges that insurance sector will have still remains
under the realms of the possibilities and speculation.

Result from this project will be of great use to the organization in order to find out
the real pit falls, where the organization has to work upon in order to make
themselves better than their counterparts.

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INTRODUCTION
Objective of the Project: To develop an understanding of
various Life
insurance products introduced by various life insurance companies.
 Scope:

• The study then goes on to evaluate and analyse the findings so as to present a clear
picture of trends in the Insurance sector.

• This study can be conducted by comparing the performances & products of three
private & government insurance players in insurance industry.
• It provides a high degree of exposure to the schemes available under different
insurance companies.

 METHODOLOGY:

• As the project is based on primary data analysis all of the data involved in the
study are collected directly by me.
• The study is based on primarily focusing on primary data collection i.e. through
questionnaires, personal interviews, market survey.

• The study involves both qualitative and quantitative analysis of the data collected.

 LIMITATIONS OF THE STUDY:

• Inadequacy of the information provided (few confidential matters may not
be furnished by the organization).

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• I wanted to conduct this project on a large scale basis that is on major cities
of India but due to financial and time constraint the study of my project is
limited to Indore city.

Industry Profile
“Insurance is a contract between two parties whereby one party called insurer
undertakes in exchange for 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. The primary purpose of Life Insurance is the protection of
the family. Insurance in it's various forms protects against such misfortunes by
having the losses of the unfortunate few paid by the contribution of the many who
are exposed to the same risk. This is the essence of insurance- the sharing of losses
and substitution of certainty for uncertainty. Insurance companies collect
premiums 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 of
the amount collected. In is a system by which the losses suffered by a few are
spread over many, exposed to similar risks.

 Insurance is defined as the equitable transfer of the risk of a loss, from one entity
to another, in exchange for a premium.

 Life insurance is a policy that people buy from a life insurance company, which
can be the basis of protection and financial stability after one's death. Its function
is to help beneficiaries financially after the owner of the policy dies.

In some sense we can say that insurance appeared simultaneously with

appearance of human society. In earlier economies, we can see insurance in the

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form of people helping each other. For example, if a house is burnt, the members
of the community help build a new one. Should the same thing happen to one’s
neighbor, the other neighbors must come to help? Otherwise, neighbors will not
receive help in the future.

History of life insurance.

Insurance in the modern sense, started as a methods of transferring or
distributing risk were practiced by Chinese and Babylonian traders as long ago
as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling
treacherous river rapids would redistribute their cargo across many vessels to
limit the loss due to any single vessel’s capsizing. The Babylonians developed a
system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and
practiced by early Mediterranean sailing merchants. If a merchant received a
loan to fund his shipment, he would pay the lender an additional sum in
exchange for the lender’s guarantee to cancel the loan should the shipment be
stolen.
Greek monarchs were the first to insure their people and made it official by
registering the insuring process in governmental notary offices. They invented the
concept of the ‘general average’. Merchants whose goods were being shipped
together would pay a proportionally divided premium which would be used to
reimburse any merchant whose goods were jettisoned during storm or sinking of
the vessel in the sea.
History of life insurance in India
The Greeks and Romans introduced the origins of health and life insurance c.
600 AD when they organized guilds called “benevolent societies” which cared for
the families and paid funeral expenses of members upon death. Guilds in the

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middle Ages served a similar purpose. Before insurance was established in the
late 17th century, “friendly societies” existed in England, in which people donated.
In India, insurance has a deep-rooted history. It finds mention in the writings of
Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya(
Arthasastra). The writings talk in terms of pooling of resources that could be re-
distributed in times of calamities such as fire, floods, epidemics and famine. This
was probably a precursor to modern day insurance. Ancient Indian history has
preserved the earlies traces of insurance in the form of marine trade loans and
carriers’ contracts.
Insurance in India has evolved over time heavily drawing from other countries,
England in particular.

1818 saw the advent of life insurance business in India with the establishment
of the Oriental Life Insurance Company in Calcutta. This Company however
failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance
business in the Madras Presidency. 1870 saw the enactment of the British
Insurance Act and in the last three decades of the nineteenth century, the Bombay
Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the
Bombay Residency
In 1914, the Government of India started publishing returns of Insurance
Companies in India. The Indian Life Assurance Companies Act, 1912 was the first
statutory measure to regulate life business.
In 1928, the Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life business
transacted in India by Indian and foreign insurers including provident insurance
societies.

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In 1938, with a view to protecting the interest of the Insurance public, the earlier
legislation was consolidated and amended by the Insurance Act, 1938 with
comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However,

there were a large number of insurance companies and the level of competition
was high. There were also allegations of unfair trade practices. The Government
of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalising the Life

Insurance sector and Life Insurance Corporation came into existence in the same
year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident
societies—245 Indian and foreign insurers in all. The LIC had monopoly till the
late 90s when the Insurance sector was reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in

the west and the consequent growth of sea-faring trade and commerce in the 17th
century. It came to India as a legacy of British occupation. General Insurance in
India has its roots in the establishment of Triton Insurance Company Ltd., in the
year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd,
was set up. This was the first company to transact all classes of general insurance
business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance
Associaton of India. The General Insurance Council framed a code of conduct for
ensuring fair conduct and sound business practices.

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In 1968, the Insurance Act was amended to regulate investments and set
minimum solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalisation)

Act, general insurance business was nationalized with effect from 1st January,
1973. 107 insurers were amalgamated and grouped into four companies, namely
National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd and the United India Insurance Company Ltd.
The General Insurance Corporation of India was incorporated as a company in
1971 and it commence business on January 1sst 1973.
The General Insurance Corporation of India was incorporated as a company.
General insurance business was nationalized with effect from 1st January 1973.
107 insurers were amalgamated and grouped into four companies namely
1)National Insurance Company Ltd.,
2).The New India Assurance Company Ltd.,
3). The Oriental Insurance Company Ltd
4).The United India Insurance Company Ltd.

In 1993 The Government set up a committee under the chairmanship of RN

Malhotra former Governor of RBI to propose recommendations for reforms in the
insurance sector.
In 2000 The IRDA was incorporated as a statutory body in April 2000.
Foreign companies were allowed ownership of up to 26%.
In 2000-Insurance Industry had 16 new entrants, 10 in Life and 6 in General
Insurance
In 2001- Insurance Industry had 5 new entrants, 2 in Life and 3 in General.

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In 2003- Insurance Industry had 1new entrant, Sahara India Insurance Company
Ltd.
In Life Insurance category
In 2004-2005 Insurance Industry had 1new entrant, Shri Ram Insurance company
Ltd.
In 2005-Bharti Axa Life insurance company was granted Certification of
Registration in July,
In 2006-Bharti Axa Life insurance company commenced its operations the newest
player in the insurance sector.
The Insurance Regulatory and Development Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill
in Parliament in December 1999.
The IRDA since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private
sector insurance companies.
The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies were the launch of
the IRDA’s online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that
the insurance companies would have a trained workforce of insurance agents in
place to sell their products, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations.

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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

• Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to

spread the message of life insurance in the country and mobilise people’s savings

for nation-building activities. LIC with its central office in Mumbai and seven

zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and

Bhopal, operates through 100 divisional offices in important cities and 2,048

branch offices. LIC has 5.59 lakh active agents spread over the country.

The Corporation also transacts business abroad and has offices in Fiji, Mauritius
and United Kingdom. LIC is associated with joint ventures abroad in the field of
insurance, namely, Ken-India Assurance Company Limited, Nairobi; United
Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance
Corporation (International), E.C. Bahrain. It has also entered into an agreement
with the Sun Life (UK) for marketing unit linked life insurance and pension
policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion
while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's

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income grew at a healthy average of 10 per cent as against the industry's 6.7 per
cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the
poverty line, with 50 per cent subsidy in the premium rates. LIC's claims
settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of
global average of 40 per cent. Compounded annual growth rate for Life insurance
business has been 19.22 per cent per annum

HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life
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 The
Standard Life Assurance Company, a leading provider of financial services from
the United Kingdom. Their cumulative premium income, including the first year
premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov
2005. They have managed to cover over 11,00,000 individuals out of which over
3,40,000 lives have been covered through our group business tie-ups.

Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings
together two large forces - Max India Limited, a multi-business corporate,
together with New York Life International, a global expert in life insurance. With
their various Products and Riders, there are more than 400 product combinations
to choose from. They have a national presence with a network of 57 offices in 37
cities across India.

ICICI Prudential Life Insurance Company Ltd.

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ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse and Prudential plc, a leading international
financial services group headquartered in the United Kingdom. ICICI Prudential
was amongst the first private sector insurance companies to begin operations in
December 2000 after receiving approval from Insurance Regulatory Development
Authority (IRDA). The company has a network of about 56,000 advisors; as well
as 7 bancassurance and 150 corporate agent tie-ups.

Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between

Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of
expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001
to conduct General Insurance business (including Health Insurance business) in
India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj
Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

Existing Insurance Companies in India

 1. HDFC Standard Life Insurance Company Ltd.

 2. Max New York Life Insurance Co. Ltd.

 3. ICICI Prudential Life Insurance Company Ltd.

 4. Kotak Mahindra Old Mutual Life Insurance Limited.

 5. Birla Sun Life Insurance Company Ltd.

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 6. Tata AIG Life Insurance Company Ltd.

 7. SBI Life Insurance Company Limited.

 8. ING Vysya Life Insurance Company Private Limited.

 9. Met life India Insurance Company Ltd.

 10. Royal Sundaram Life Insurance Company Limited.

 11. Aviva Life Insurance Co. India Pvt. Ltd.

 12. Sahara India Insurance Company Ltd.

 13. Shriram Life Insurance Company

 14. Life Insurance Corporation of India.

 15. Reliance Life Insurance Company Limited.

 16. Bharti AXA Life Insurance Company Limited.

 17.Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.

 18. Aegon Religare Life Insurance Company Limited.

 19. DLF Pramerica Life Insurance Company Limited.

 20. Star Union Dai-Ichi Life Insurance Company Limited.

 21. Future Generali India Life Insurance Company Limited.

 22. IDBI Fortis Life Insurance Company Ltd.

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Reliance Money

Company Profile

Reliance Money, a Reliance Capital company, is part of the Reliance Anil

Dhirubhai Ambani Group. It is a comprehensive financial services and solution
provider providing customers with access to Equity, Equity and Commodity
Derivatives, Portfolio Management Services, Mutual Funds, IPOs, Life and
General Insurance and Gold Coins. Customers can also avail Loans, Credit Card,
Money Transfer and Money Changing services.

The largest broking house in India with over 2.5 million customers and a wide
network of over 10,000 outlets and 20,000 touch points in 5,000+ locations.
Reliance Money endeavors to change the way investors transact in financial
markets and avails financial services. The average daily volume on the stock
exchanges is Rs. 2,000 crores, representing approximately 3% of the total stock
exchange volume.

Reliance Capital is one of India's leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector financial
services and banking groups, in terms of net worth.

Sector: Financial
Brokerage firm
Industry:

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Employees (last reported count): More than 20,000

Reliance Money has over 22 lakhs customers and more then 10'000 branches in
around 5000 cities in India. Company is among the largest broking and
distribution house of financial products and having share of more then 3% of total
stock market volume at BSE & NSE.

RelianceMoney.com is the web based investment portal (with Online Stock

Trading) from Reliance Money. This website enables its customer to invest &
manage most of the services provided by Reliance Money including Equity
(Stock) Trading, Commodity Trading, Derivatives, Mutual Fund Investment, IPO
Investment, Life Insurances, General insurances, Money Transfer, Forex
exchange, Gold Coins and Credit Cards Services. Company recently entered in to
Wealth Management with tools like investment in equity-linked portfolio
management services, structured products, insurance and mutual funds.

Strong National Network

The company at present has an enviable network of over 10000 branches spread
over 5000 cities across India. All branches are linked on an online real-time basis.
Customers in over 120 locations are also serviced through Telephone service. The
company’s expansion plans take into account the need to have a presence in all
major industrial and commercial centers where its corporate customers are
located.

Advantages of Reliance Money

1. Extra security features with 'Security Token'', which is the most secure and tested
technology in computer world.
2. Simple, easy and fast online stock trading.
3. Almost all investment options are available under one account including Equity
Trading, Derivatives, Forex, Commodity, IPO, Mutual Funds and Insurance.
4. Branches are available in all major cities and the number is growing.

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Benefits of reliance money

 It's Cost-effective
Lower transaction fees. A flat fee of just Rs. 500/- and transact through
Reliance Money.
 It offers Single Window Access to almost all financial products.

 Its Convenient - Reliance Money's services are through the Internet, Transaction
Kiosks and over the phone.
 It's Safe
Accounts are safe guarded with a unique security number that changes every 32
seconds. This number works as a dynamic password to keep your account extra
safe.
 It provides you a 3...in...l facility
of Banking, Trading and Demat Account through a single window and transfer
funds across accounts seamlessly.

 About Reliance Life Insurance Company Limited:

 Reliance Life Insurance Company Limited is an associate company of Reliance

Capital. Limited, a part of the Reliance - Anil Dhirubhai Ambani Group.
 Reliance Capital is one of India's leading private sector financial services companies.
 Reliance Capital has interests in asset management and mutual funds, stock broking,
life and general insurance, proprietary investments, private equity and other activities
in financial services.
 Reliance - Anil Dhirubhai Ambani Group also has presence in Communications,
Energy, Natural Resources, Media, Entertainment, Healthcare and Infrastructure.

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Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of

the Reliance – Anil Dhirubhai Ambani Group. The company acquired 100 per cent
shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking
over AMP Sanmar Life provided Reliance Life Insurance a readymade
infrastructure and a portfolio.

AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the
Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices
across the country, 9,000 agents, and more than 900 employees.

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance – Anil Dhirubhai Ambani Group. Reliance Life Insurance is another step
forward for Reliance Capital Limited to offer need based Life Insurance solutions
to individuals and Corporate.

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth. Reliance Capital Ltd. has
interests in asset management, life and general insurance, private equity and
proprietary investments, stock broking and other financial services.

Whatever your career goal, Reliance Life Insurance is a company big enough for
your dreams. We, along with the other businesses of Reliance Capital, enjoy a
strong position in the financial services category. And this may be the place where
you can have the career you always wanted.

COMPANY PRODUCT

Product Details of Reliance Life Insurance

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Products:-

Individual Plans

Reliance Wealth + Health Plan

Reliance Secure Child Plan

Reliance Automatic Investment Plan

Reliance Money Guarantee Plan

Reliance Endowment Plan

Reliance Special Endowment Plan

Reliance Cash Flow Plan

Reliance Child Plan

Reliance Term Plan

Reliance Whole Life Plan

Reliance Market Return Plan

Reliance Golden Years Plan

Reliance Golden Years Plan Value

Reliance Golden Years Plan Plus

Reliance Simple Term Plan

Reliance Special Term Plan

Reliance Credit Guardian Plan

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Reliance Connect 2 Life Plan

Employee Benefit Plans

Group Term Assurance Policy

Reliance EDLI Scheme

Reliance Group Gratuity Policy

Reliance Group Superannuation Policy

1.Automatic investment plan:-

The Key benefits of Reliance Automatic Investment Plan are as follows:

• A smart plan which adapts to your changing risk profile with increasing age
• Option to lower the average cost of units through systematic transfer of your funds
• Flexibility to switch between funds and plans
• Options for additional Insurance cover available through riders

Key Features Reliance Automatic Investment Plan

• Two plan options to choose from Ready-made and Tailor-made

• Life Stage asset allocation to ensure automatic change in investment patterns,
under the Ready-made Plan option
• Freedom to decide your own fund mix based on your risk profile under the Tailor-
made Plan
• Regular, limited, single premium paying options
• Unmatched flexibility through our ‘Exchange Option’
• Liquidity in the form of partial withdrawal

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Reliance Money

• Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability

and Term Insurance riders

How does this Plan work?

As a customer you will have the liberty to choose between the Ready-made and
Tailor-made Plan options. The premium contributions made by you, net of
Premium Allocation Charges and Sum Assured Related Charges are invested in
fund/funds of your choice and units are allocated depending on the price of units
for the fund/funds.

The Fund Value is the total value of units that you hold in the fund/ funds. The
Mortality Charges and Policy Administration Charges are deducted through
cancellation of units, whereas the Fund Management Charge is priced in the Unit
Value.

Reliance Automatic Investment Plan at a glance

Basic Plan Minimum Maximum

Age at Entry 30 days 65 years last

birthday

Age at 18 years last birthday 80 years last

Maturity birthday

Premium 5 years 30 years

Paying Term

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Min Sum Regular / Limited Premium: Annualised Premium for 5 years or

Assured Annualised Premium for half of the policy term, whichever
higher

Single Premium 125% of the single premium amount

Max Sum No Limit

Assured
Minimum premium

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Regular
Premium
option

Rs
10,000

Rs5,000

Rs 2,500

Rs 1,000

Limited
Premium

Rs
20,000

Rs10,000

Rs 5,000

Rs 2,000

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Reliance Money

Reliance Super Market

Return Plan
UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT
PORTFOLIO IS BORNE BY THE POLICYHOLDER.
You have always aspired for the best in life. And we help you achieve just that.
With Reliance Super Market Return plan you can have the twin advantage of
insurance protection as well as reaping the benefits of investment growth. It is a
flexible plan which works all through your life and meets the changing
requirements like additional protection, liquidity through cash, option to invest in
different asset class, steady golden years and many more.
Key features:
 Twin benefit of market linked return and insurance protection
 A Unit Linked Plan, different form traditional Life Insurance
 products, with maximum maturity age of 80 years last birthday
 Option to create your own portfolio depending on your risk appetite
 Choose form eight different investment funds
 Flexibility to switch between funds
 Option to pay regular as well as single premium & Top-ups
 Option to package policy with Reliance Major Surgical Benefit
Rider, Reliance Critical Conditions (25) Rider, Reliance Term Life
Insurance Benefit Rider, Reliance Accidental Death and Total and
Permanent Disablement Rider.
 Liquidity through partial withdrawals.
How does this Plan work?

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Reliance Money

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

fund/funds of your choice and units are allocated depending on the price of units
for the fund/funds.
The Fund Value is the total value of units that you hold in the fund/funds. The
Mortality Charges and Policy Administration Charges are deducted through
cancellation of units whereas the Fund Management Charge is priced in the unit
value.

Benefits

Life Cover Benefit: In case of unfortunate loss of life, your

Beneficiary will get sum Assured or Fund Value, whichever
is higher.
You can choose the basic Sum Assured within the minimum
and maximum levels mentioned below.
Minimum Sum Assured:
 Regular Premium: 5 times of the annualized premium.
 Single Premium: 110% of the single premium .

Maximum Sum Assured and Regular Premium

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Single premium

Rider Benefit: The following optional riders are available on payment of

additional premium on the life of the Life assured;
1. Reliance Major Surgical Benefit Rider: Provides lump sum amount to cover
surgical expenses from a list of 33 surgeries including Open Heart surgery, Kidney
Transplant, Cornea transplantation, Transplant of Lungs and many more.

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Reliance Money

2. Reliance Critical Conditions (25) Rider: Provides lump sum amount to take
care of 25 critical conditions including Cancer, Heart Attack, Paralysis, Major
Organ transplant and many more.
3. Reliance Term Life Insurance Benefit Rider: Provide additional death benefit
depending on the sum assured selected under the rider.
4. Reliance Accidental Death and Total and Permanent Disablement Rider:
Provide additional death/disability benefit if the death/disability occurs as a result
of an accident. Also, the Waiver of Premium benefit under the rider continues the
plan incase of disability.

The eight different funds offered are

Fund
Name
Target
Investment Objectives Asset Category (%)
Asset
Allocation

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Reliance Money

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Reliance Money

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Reliance Money

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Reliance Money

Range (%)Reliance Money Guarantee Plan

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE
BY THE POLICYHOLDER.
Key Features
Capital Guarantee: The sum of all premiums paid is guaranteed on maturity or on
death before the maturity.
Capital Guarantee is available on both the basic premiums as well as on top-up
premiums.
Unique Return Shield feature to protect your returns.
Choice to invest from 3 pre-packaged investment fund options.
Unmatched flexibility through our ‘Exchange Option’ to move between the
Reliance Life Insurance Unit Linked products offered, as you grow up the ladder.
Liquidity in the form of partial withdrawals from top-up fund .
Option to package with Accidental Death & Disability and Term Insurance riders.

Some product of LIC

1. Jeevan aannad

Product summary:

This plan is a combination of Endowment Assurance and Whole Life plans. It

provides financial protection against death throughout the lifetime of the life
assured with the provision of payment of a lump sum at the end of the selected
term in case of his survival.

Premium: Premiums are payable yearly, half-yearly, quarterly, monthly or through

salary deductions as opted by you throughout the selected term of the policy or till
earlier death.
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Bonuses:

This is a with-profit plan and participates in the profits of the Corporations life
insurance business. It gets a share of the profits in the form of bonuses. Simple
Reversionary Bonuses are declared per thousand Sum Assured annually at the end
of each financial year. Once declared, they form part of the guaranteed benefits of
the plan. Bonuses will be added during the selected term or till death, if it occurs
earlier. Final (Additional) Bonus may also be payable provided the policy has run
for certain minimum period.

2. Jeevan saral

This is an Endowment Assurance plan where the proposer has simply to choose
the amount and mode of premium payment. The plan provides financial protection
against death throughout the term of the plan. The death benefit is directly related
to the premiums paid. The Maturity Sum Assured depends on the age at entry of
the life to be assured and is payable on survival to the end of the policy term. It
also offers the flexibility of term and a lot of liquidity.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, or monthly through salary

deductions as opted by you throughout the term of the policy or till earlier death.

Loyalty Additions: This is a with-profits plan and participates in the profits of the
Corporations life insurance business. It gets a share of the profits in the form of
loyalty additions which are terminal bonuses payable along with death benefit or
maturity benefit. Loyalty Additions may be payable from the 10th year onwards
depending upon the experience of the Corporation.

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BENEFITS:

On Death: 250 times the monthly premium, plus return of premiums excluding
extra/rider premium and first year premium, plus the loyalty addition, if any.

On Maturity: Maturity sum assured, plus The Loyalty Additions, if any

SPECIAL FEATURES:

High risk cover at low premium

Extended risk cover for one year after 3 years premium payment.

Optional higher cover through Term Riders

The policyholder can choose a maximum term but can surrender at any time
without any surrender penalty or loss after 5 years

Any number of withdrawals through partial surrendering

OTHER ELIGIBILITY CONDITIONS:

Premium : Minimum premium of Rs.250/- per month for entry age upto 49
years.

and Rs.400/- per month for entry age 50 years and above.

The maximum premium will be Rs.10,000/- per month.

3. Jeevan Tarang

This is an Endowment Assurance plan where the proposer has simply to choose
the amount and mode of premium payment. The plan provides financial protection

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ICFAI BUSINESS SCHOOL
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Reliance Money

against death throughout the term of the plan. The death benefit is directly related
to the premiums paid. The Maturity Sum Assured depends on the age at entry of
the life to be assured and is payable on survival to the end of the policy term. It
also offers the flexibility of term and a lot of liquidity.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, or monthly through salary

deductions as opted by you throughout the term of the policy or till earlier death.

Loyalty Additions:

This is a with-profits plan and participates in the profits of the Corporations life
insurance business. It gets a share of the profits in the form of loyalty additions
which are terminal bonuses payable along with death benefit or maturity benefit.
Loyalty Additions may be payable from the 10th year onwards depending upon
the experience of the Corporation.

BENEFITS:

On Death: 250 times the monthly premium, plus return of premiums excluding
extra/rider premium and first year premium, plus the loyalty addition, if any.

On Maturity: Maturity sum assured, plus The Loyalty Additions, if any

SPECIAL FEATURES: High risk cover at low premium

Extended risk cover for one year after 3 years premium payment.

Optional higher cover through Term Riders

The policyholder can choose a maximum term but can surrender at any time
without any surrender penalty or loss after 5 years

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Any number of withdrawals through partial surrendering

OTHER ELIGIBILITY CONDITIONS:

Premium : Minimum premium of Rs.250/- per month for entry age upto 49
years.

and Rs.400/- per month for entry age 50 years and above.

The maximum premium will be Rs.10,000/- per month.

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Different types of plan

Endowment Assurance Plan

 Endowment assurance plan is a participating (with profits) insurance plan

that offers the following features:

 Provides financial support to the family by way of a lump sum payment in

case of the unfortunate death of the life assured within the term of the policy.

 provides a lump sum payment to the life assured on survival up to maturity

This plan is with profits saving plan and is well suited for saving money for your
long term financial goals. This plan also helps provide for the needs of your family
in your absence by paying out a lump sum in the event of your unfortunate death
during the term of the policy.

Optional benefits
You can add the following optional benefits to customise your policy to suit your
needs:

• Critical Illness (CI) Benefit provides an amount, equal to the sum assured
chosen under this optional benefit, on diagnosis of any one of the 6
common critical illnesses(1). The sum assured is payable if you survive for
30 days after the date of the claim. Once such a claim has been met, no
further Critical Illness Benefit is payable. However, your basic policy
continues even after we pay a claim On this benefit.
• Additional Term Benefit (ATB) provides an additional amount equal to
the sum assured chosen under this optional benefit, in case of your
unfortunate death.

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• Accidental Death Benefit (ADB) provides an additional amount, equal

to the sum assured chosen under this optional benefit, in case of your
unfortunate death:
-due to an accident and within 60 days of an accident.
• Waiver Of Premium (WOP) Benefit waives the premium for you in case
you become totally disabled. The waiver is applicable during the period of
total disability.
This plan can be taken on a single life basis or a joint life (first claim)
basis.

Eligibility

This plan can be taken as a single life basis or a joint life (first claim) basis. The
eligibility ages are as follows:

Basic Policy Basic policy with optional benefits

CI ATB ADB WOP
Min. age of entry 12 18 18 18 18
Max. age of entry 60 5 60 55 50
Max. age of expiry 75 70 75 65 60

Minimum term: 10 years Maximum term: 30 years

Tax Benefits

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Tax benefits described in Section 88, Section 80D and Section 10 (10D) of the
income Tax Act are applicable.

Applicable to premium paid for CI and WOP

Payment options
you have the choice of paying your premium either in yearly, half-yearly or
quarterly modes, depending on your convenience

Unit Linked Endowment Plan:

The unit linked endowment plan is an insurance policy that is designed to pay a
lump sum on maturity or on earlier death. The Unit Linked Endowment Plan also
gives the option of additional protection against the six common critical illnesses,
as well as additional protection if death is as the result of an accident.

Your premiums are invested in units of the investment fund of your choice, based
on the prevailing unit price. On maturity you receive the value of your units. On
death (or critical illness, if chosen) you receive the greater of the value of your
units and your selected basic sum assured.

Premiums

Premiums can be paid either quarterly, half-yearly or annually, throughout the

term of the policy. The minimum premium amount is Rs. 10,000 each year.
Premiums can be paid by cash, cheque or demand draft.

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Benefits

There are 4 different options available to choose from:

1. Life Option

On death within the policy term, the greater of the Sum Assured and the
value of the unit-linked fund will be paid to your nominee.

On survival to the end of the policy term the value of the unit linked fund will
be paid to you.
2. Life and Health Option

On death or earlier diagnosis of any one of six common critical illnesses

within the policy term, the greater of the Sum Assured and the value of the
unit-linked fund will be paid to your nominee.

On survival to the end of the policy term the value of the unit-linked fund
will be paid to you.
“The illnesses covered under this option are cancer, coronary artery by
pass graft surgery, heart attack, kidney failure, major organ transplant (as
recipient) and stroke

3. Extra Life Option

This option pays the same benefits as the Life Option but, should death
occur within the policy term as the result of an accident, an extra benefit
equal to the Sum Assured will be paid.

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4.Extra Life and Health Option

This option pays the same benefits as the Life and Health Option but,
should death occur within the policy term as the result of an accident, an
extra benefit equal to the Sum Assured will be paid.

Levels of protection

Depending on your age at entry, you may choose between 3 levels of cover – Low,
Medium or High. For each level the Sum Assured is based on the amount of
premium you pay each year.

The Sum Assured can’t be changed during the term of the contract.
Functions of Insurance

The functions of Insurance can be bifurcated into three parts:

1. Primary Functions

2. Secondary Functions

3. Other Functions

The primary functions of insurance include the following:

1) Provide Protection - The primary function of insurance is to provide protection

against future risk, accidents and uncertainty. Insurance cannot check the
happening of the risk, but can certainly provide for the losses of risk. Insurance is
actually a protection against economic loss, by sharing the risk with others.

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2) Collective bearing of risk - Insurance is a device to share the financial loss of

few among many others. Insurance is a mean by which few losses are shared
among larger number of people. All the insured contribute the premiums towards a
fund and out of which the persons exposed to a particular risk is paid.

3) Assessment of risk - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for determining the
premium rate also.

4) Provide Certainty - Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks may be
made more certain.

The secondary functions of insurance include the following:

1) Prevention of Losses - Insurance cautions individuals and businessmen to adopt

suitable device to prevent unfortunate consequences of risk by observing safety
instructions; installation of automatic sparkler or alarm systems, etc. Prevention of
losses causes lesser payment to the assured by the insurer and this will encourage
for more savings by way of premium. Reduced rate of premiums stimulate for
more business and better protection to the insured.

2) Small capital to cover larger risks - Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks and
uncertainty.

3) Contributes towards the development of larger industries - Insurance

provides development opportunity to those larger industries having more risks in

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their setting up. Even the financial institutions may be prepared to give credit to
sick industrial units which have insured their assets including plant and machinery.

The other functions of insurance include the following:

1) Means of savings and investment - Insurance serves as savings and

investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing income-tax
exemptions also, people invest in insurance.
2) Source of earning foreign exchange - Insurance is an international business.
The country can earn foreign exchange by way of issue of marine insurance
policies and various other ways.
3) Risk Free trade - Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under marine
insurance cover.

TAXATION
TAX BENEFITS OF INSURANCE AND PENSION PLAN.

Life insurance and retirement plans are effective ways of saving

taxes. The tax breaks that are available under various insurance
and pension policies are described below:

1. Life insurance plans are eligible for deduction under Sec.

80C.
2. Pension plans are eligible for a deduction under Sec.
80CCC.
3. Health riders are eligible for deduction under Sec. 80D.

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4. The proceeds or withdrawals of life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

Tax Rates for Individuals

The rates of income tax for FY 2005-06 are as follows:

Rate of tax
Total Income (Rs.) Senior Women Other
citizen below 65 s
years
Nil Nil Nil
Up to Rs 1, 10,000/-
Above Rs 110,000/- to Nil Nil 10%
125,000/-
Above Rs 125,000/- to Nil 10% 10%
150,000/-
Above Rs 150,000/- to 20% 20% 20%
250,000/-
Above Rs 250,000/- 30% 30% 30%

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ICFAI BUSINESS SCHOOL
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Reliance Money

HDFC PENSION-II VS BIRLA FLEXI SECURE LIFE

RETIREMENT VS BAJAJ ALLIANZ UNIT GAIN VS LIC
BIMAPLUS AND RELIANCE LIFE

BIRLA Flexi Allianz Bajaj Reliance

Featur HDFC Secure Life Unit gain LIC Bima Life
es PENSION Retirement Plus {MRP}

Age 18 - 60 18 - 60 years 0 – 60 years 30days

years 12 - 55 to 65
years year
Term 10 - 30 Minimum Term Choice rests 10year(m
years of 10 years with the in) and
consumer 30year
with a (max.)
minimum
premium
payment
term of 3
years 10 years
Sum Only 5, Minimum Sum Minimum Maximum 58 times
Assure 10, 20 Assured is Rs. Sum Assured limit up to of
d (age- 50,000. Zero is 5 times Rs. 2 lakhs premium
based) Death Benefit the premium
multiples is also paid.

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are available.
allowed as
Sum
Assured.
Surviv Value of Unit Value is Value of Value of
al units used to Fund at Bid units
benefi partly in purchase an price partly in
t cash annuity cash
partly partly
converted Bid Value converte
to annuity. of the fund d to
units annuity.
Death Value of Value of units Higher of Death Max of
benefi units, no in this case Sum Assured during the S,A,
t sum the Sum or value of first 6
Andfund
assured is Assured is units. months -
value
given. zero. 30% of SA
+ value of
units, next
6 months -
60% of SA
+ value of
units.
Death
after 1st
year - SA

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+ value of
units.
Death
during the
10th year -
105% of
SA + value
of units.

Partial or Premature Partial or

complete withdrawal complete
Withdr No Partial No Partial
withdrawal allowed withdraw
awal withdrawa withdrawals
at bid price after one al at bid
benefi ls are are available
after 3rd year (after price
t available.
year applying after 3rd
bid-offer year
spread.

Contri Minimum: Minimum Rs. Minimum: Minimum:

bution Rs. 5,000 p.a. Rs. 10,000 Rs.
/ 10,000 p.a. Minimum 10,000
premi p.a. Rs. 10,000 p.a.
um p.a
Flexibl Available Not available Only an Not Available
e increase in available

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ICFAI BUSINESS SCHOOL
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contri contribution
bution is allowed
Invest 5 Fund Nourish, Equity Fund, Balanced, 8 funds
ment Options- Growth and Debt Fund, Secured &
option Balanced, Enrich Balanced Risk
s Defensive Fund, Cash
Managed, Fund
Safe
Managed,
Liquid &
Growth
Surren The Surrender is A selling / Partial 4th yr 5%
der surrender available from purchase surrender
5th yr 3%
Value charge is the 1st year price spread up to 50%
25% of 3 itself. In the of 5% will be of bid Nil

years of 1st year applicable value of therafter

regular surrender from the 3rd units

premium. charges are year allowed
No 75%, in the onwards after 3
charges 2nd year the years from
after 3 charges are date of
years 50%, in the commence
3rd year the ment
charges are
25%..
Top-up Available Available, with Available Available 2500

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ICFAI BUSINESS SCHOOL
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with a a minimum
minimum top-up of Rs.
top-up of 10,000
Rs 5,000
and
(Charges:
maximum
1.5% of
of 20% of
the top-up)
sum
assured.
Switch 24 Switches 2 free switches Three free 52 switches
are free. every year. Every switches every
Free p.a.
additional switch policy year.
will be charged at Subsequent
0.5% of the switch switches would No free
amount. be charged switches.
@1% of switch Cost of
amount or Rs. switching is
100, whichever 2% of the
is higher. fund value.
Initial Charges Charges Charges Charges
Charge
1st yr-27%, 20% of the initial 1st year - 70%; Not 4th yr 5%
2nd yr- 27%, premium in the 1st 2nd year - 2%; Disclosed
5th yr 3%
3rd yr year and 2% of the 3rd year - 1%;
onwards- 1% premium from the No charges Nil therafter

2nd year onwards. from the 4th

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year onwards
Admin Admin Policy admin fee Annual admin 1.5%-1.75%
Charge charges of of Rs. 20 per charges of
Rs.180 fixed month 1.25% p.a. of
charge net assets
Not
Per annum. applicable
Fund Least in the A fund based fee Annual 1% of the Rs40 p.a.
Manage industry of 2.25 % p.a. of investment fund per
ment 0.8% of the the policy fund. charge of 1% annum
Charges fund per p.a. of fund.
annum
Bonus Available Not Available Not Available Available Not
Available
units

DATA ANALYSIS & INTERPRETATION

 DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE

COMPANIES
NO.OF
COMPANY’S NAME SHARE (%)
RESPONDENT
L.I.C. 78 78
RELIANCE LIFE
3 3
INSURANCE
ICICI PRUDENTIAL 10 10
SBI LIFE 7 7
HDFC 2 2
TOTAL 100 100

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7 2
10 LIC
3 REL
ICICI
SBI
HDFC
78

INTERPRETATION

 78% of the people contacted prefer LIC policy to any other and therefore it

is ranked no.1 by that percent of respondents.

 DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY

RESPONDENTS

NO.OF
BENEFITS RESPONDENT SHARE (%)
S
Cover Future Uncertainty 55 55
Tax Deductions 20 20
Future Investment 25 25
TOTAL 100 100

25%
Cover Future
Uncertainty
Tax Deductions
55%
Future Investment
20%
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INTERPRETATION

 55% of the respondents believe that covering future uncertainty is the

biggest benefit of an insurance policy.

 Whereas, 20% and 25% of them believe that the other benefits are Tax

deduction and future investments respectively.

 DATA PROVIDES FEATURES OF INSURANCE POLICY THAT

ATTRACTED RESPONDENTS

FEATURE NO.OF SHARE (%)

RESPONDENTS
Money Back Guarantee 15 15
Larger Risk Coverance 37 37
Easy Access to Agents 7 7
Low Premium 30 30
Company’s Reputation 11 11
TOTAL 100 100

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FEATURES OF INSURANCE POLICY

MONEY BACK
GUAARENTEE

LARGER RISK COVERANCE

11%
15%
EASY ACCESS TO AGENTS
37%
30%

LOW PREMIUM
7%

REPUTATION OF COMPANY

INTERPRETATION

 Majority of the respondent (37%) found Larger risk coverance as the

most attracted feature of the all.

 DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE

RESPONDENTS

POLICY TYPE NO. OF SHARE (%)

RESPONDENTS

LIFE POLICY 75 75

NON LIFE 25 25
POLICY

BOTH 45 45

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NATURE OF POLICY

45

LIFE
POLICY
NON LIFE
75
POLICY
BOTH

25

INTERPRETATION

 75% of the respondents have Life Insurance Policy while 45% have both. (The

% is calculated out of 280 positive response)

 DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

RESPONSE NO. OF SHARE

RESPONDENTS (%)

A saving tool 81 81%

A tax saving device 74 74%

A tool to protect your family 100 100%

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81
100

SAVING
TOOL

TAX SAVING
TOOL

74 FAMILY
PROTECTIO
N

INTERPRETATION

• 81% of the respondents have perception of Insurance being a saving tool.

• And 74% of the respondents have perception of Insurance being a tax saving

device.

• But 100% of the respondents are with the view that Insurance is a tool to

protect your family.

 DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF SHARE (%)

30% RESPONDENTS

Yes 70 70%

No 30 30%

100 100%
70%

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INTERPRETATION

• Of the sample size of 400 surveyed respondents 70% of the respondents are
having Insurance policy.

• 30% of the respondents are either not having any Insurance policy at present or
their policy is already matured.

Experiences at Reliance money

This project is helping me to learn how to communicate when work has to be done
at the front-end. Some prospects will listen to you and will give positive response.
Its not easy to work at the front-end one has to be patient and calm. If one is a good
listener than make sure that your half work is done.

While on the other hand some customers will not even listen to you and will give
reactions that one will not even dare to go back to them. It hard sometimes to take
appointments and when its given then person is not available. The golden rule is
“how well you communicate” to your customers.

RECOMMENDATIONS

• As the people think that insurance is a tool to protect their family & a tax
saving device. They are aware of the fact & realizing its, importance. The
company should try to expand & build up its infrastructure because there is a
large potential for insurance in India.

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• Company should come up with its branch in various cities. With the objective
and goals to meet the demands & expectations of the public. Because the
entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.

• Since Reliance Life Insurance is leading with several companies’ policies it

should be easy for them to penetrate into the market and secure a good position
if they pay greater attention to the service part provided to their customer and
thereby forming a long and trusted relationship.

• As seen from the survey that at present 70% of the customer are having
insurance policy out of which 87.5% of the customer are planning for new
investments. So it can be a good potential for the company and they should
make an attempt to trap these customers.

• 43% of the customer is even ready to go for insurance if a service provider

away from their home is providing it. But intend they should provide good
products and services. The company should try to convince these customers
and get them in its favor.

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting
trends which can be seen in the above analysis. A general impression that we
gathered during Data collection was the immense awareness and knowledge among
people about various companies and their insurance products. People are beginning
to look beyond LIC for their insurance needs and are willing to trust private players
with their hard earned money.

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In these type of market conditions the ULIP plan are giving better return to
investor.
Todays ULIP product are better than mutual fund because in this we have
switching options .

References

 www.reliancemoney.com

 Google search engine

 World economic forum

 IRDA website

 www.reliancelife.com

 Hdfc.com

 www.licindia.com

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