A SUMMER TRAINING PROJECT ON

LIFE INSURANCE AND TAXATION

Submitted JIWAJI UNIVERSITY GWALIOR (M.P.) i !"#ti"$ %u$%i$me t &% t'e "("#d &% de)#ee &% *"+'e$&# O% *u,i e,, Admi i,t#"ti&
(-.//0/1)
SU*MITTE2 TO SU*MITTE2 *Y

M,.T" u 3'"#e
SUMAN (%"+u$t4 )uide.) SEM

SARI3A **A V

JAIN GROUP O5 COLLEGES GWALIOR

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2ECLARATION

I SARI3A SUMAN Hereby Declare That The Summer Training Entitled LIFE INSURANCE AND TAXATION has been prepared as part of the degree of a BBA . JAIN GROUP O5 COLLEGES GWALIOR and it is beside on original wor as will be used academic purpose

2"te 6 SARI3A SUMAN P$"+e 6 G("$i&# Seme,te# **A V

AC3NOWLE2GEMENT

It gi"es me immense pleasure to e#press my deep sense of gratitude to GWALIOR mr. $.% &erma JAIN GROUP O5 COLLEGES for him "aluable guidance and consistent

super"ision throughout the course. I am also than ful to

M,.T" u 3'"#e my $ompany 'uide

of LIFE INSURANCE AND TAXATION( for his "aluable guidance for preparing the final )eport and also for pro"iding the necessary facilities. *inally I am indebted to our other faculty members+ my friends and my parents who ga"e their full, fledged co, operation for successful completion of my pro-ect. It was indeed learning e#perience for me.

2"te 6 SARI3A SUMAN P$"+e6 G("$i&# Seme,te# **A V

CERTI5ICATE O5 5ACULTY GUI2E

This is to certify that M,. SARI3A SUMAN student of **A V Seme,te# programme has completed his/her Summer Training of 01 Days prepared this report under my guidance. LIFE INSURANCE AND TAXATION.

2"te 60 P$"+e 60GWALIOR )uide.)

M,.T" u 3'"#e
(%"+u$t4

Table of Content
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1. 2. 3. 4. 5. !. &.

Contents
Certificate of supervisor...............................................................................3 Certificate of authentication.........................................................................4 Acknowledgement........................................................................................5 reface.........................................................................................................! "#ecutive $ummar%......................................................................................& 'b(ective and scope of research...................................................................) *ife +nsurance +ntroduction to +nsurance +ndustr%..................................................1, +-.A /The +nsurance regulator% and development authorit%0.............................................................11 Compan% profile of 1.2C3$tandard *ife...................................................................................................12 4oint 5enture....................................................................................15 Corporate 'b(ectives and 5alues.....................................................1! Corporate accolades and recognition................................................1&

Page. No.

roduct and services provided b% 1.2C life.........................................................................................1)

$6'T anal%sis of the organisation..................................................22 ). Comparative Anal%sis of +nsurance market in +ndia 7a(or la%ers in +ndian +nsurance 7arket................................................................................................24 A comparative stud% of different life +nsurance Companies operating in +ndia 2,11...................................................25 April 2,1, to 2eb 2,11......................................................................2! 8*+ $cenario....................................................................................2) 9. Ta#ation on life +nsurance A brief about ta#ation in life +nsurance sector..................................................................................3, 5arious sections related to +nsurance sector..................................................................................32 +nstruments that help us save ta#........................................................35 Ta# benefit on +nsurance and ension................................................................................................3& *ife +nsurance to cover future ta#es....................................................3& *ife +nsurance to shelter investment...................................................3) :rowth and income.............................................................................3) $ome ta# benefits from various plans.................................................3) 1,. 11. 12. Conclusion........................................................................................................4, Appendi#;Anne#ure..........................................................................................41 <ibliograph%......................................................................................................42

PREFACE
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The liberali=ation of the +ndian insurance sector has been the sub(ect of much heated debate for some %ears. The polic% makers where in the catch 22 situation wherein for one the% wanted competition> development and growth of this insurance sector which is e#tremel% essential for channelling the investments in to the infrastructure sector. At the other end the polic% makers had the fears that the insurance premia> which are substantial> would seep out of the countr%? and wanted to have a cautious approach of opening for foreign participation in the sector. As one of the rare occurrences the entire debate was put on the back burner and the +-.A saw the da% of the light thanks to the maturing polit% emerging consensus among factions of different political parties. Though some changes and some restrictive clauses as regards to the foreign participation were included the +-.A has opened the doors for the private entr% into insurance. 6hether the insurer is old or new> private or public> e#panding the market will present multitude of challenges and opportunities. <ut the ke% issues> possible trends> opportunities and challenges that insurance sector will have still remains under the realms of the possibilities and speculation. 6hat is the likel% impact of opening up +ndia@s insurance sectorA The large scale of operations> public sector bureaucracies and cumbersome procedures hampers nationali=ed insurers. Therefore> potential private entrants e#pect to score in the areas of customer service> speed and fle#ibilit%. The critics counter that the benefit will be slim> because new pla%ers will concentrate on affluent> urban customers as foreign banks did until recentl%. This seems to be a logical strateg%. $tart3up costs3such as those of setting up a conventional distribution network are large and high3end niches offer better returns. 1owever> the middle3 market segment too has great potential. $ince insurance is a volumes game. Therefore> private insurers would be best served b% a middle3 market approach> targeting customer segments that are currentl% untapped.

Executive Summary

As a management trainee + hereb% chosen insurance sector because it has large opportunities and gives me greater e#posure not onl% professionall% but morall% also and creates better relationship and social network. +nsurance sector is a vast sector and have huge potentialit% in +ndian market as demand for investment is growing up as people@s standard of living and per capita has risen up. +t is also a noble work as insurance as it secures the life of person financiall% and brings hope to polic%holder. +nsurance is need for ever% individual and group whether in form of famil%> business> spouse etc. 7odern time reBuires insurance to prevent unknown risk .The scenario is becoming more comple# da% b% da% one can use insurance for investment purpose. 6orking as a trainee + got to know the real picture behind the insurance sector in 1.2C life. 6e understand clients need in better manner and how to fulfill their needs. 1.2C life gave me perfect platform to understand the market as it is alread% renowned name in the market. +t is a (oint venture between 1.2C and a group of compan% of $tandard *ife. 1.2C life is one of the oldest private sector insurance compan% in +ndia and running successfull% with glor%. As an organisation it believes in creating standard and harmon% with emplo%ees and basic importance is customer satisfaction. Appro# 21 companies like LIC, SBI insurance ICICI prudential, Birla Sun life, Tata AIG, Aviva, Bajaj Allianz, Religare etc. are giving fierce competition and challenges to 1.2C life. +-.A regulates the various activities of insurance companies and it is autonomous bod%. The 8*+ plan and conventional plan gives a choice to polic%holders to invest according to market share and securities or use traditional insurance practices. +t covers risk of both individual and group.
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Objective and scope of researc

The focus is mainl% on what the customer wants> how the organisation works > where will we discover better opportunities> which is the best option to match the market > hen does the investor invest the most and for what purpose. The scope in +nsurance business is than one gains trust from others b% selling a concept .This will help in further growth and networking in future reBuirement. 6e know the insurance market and marketing in better manner. +nsurance and Ta# goes hand in hand. The ta# benefits under sections ),C and 1,/1,.0 of the +ncome Ta# Act> 19!1 puts on Buestion 1ow best we can utilise the benefit as per +-.A norms and give best to polic% holders.

*+2" +C$8-ACC"

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!ntroduction "o !nsurance !ndustry "#E #!S"OR$ OF !N%!AN !NS&RANCE !N%&S"R$ '!FE !NS&RANCE

+n 1)1) the <ritish established the first insurance compan% in +ndia in Calcutta> the 'riental *ife +nsurance Compan%. 2irst attempts at regulation of the industr% were made with the introduction of the +ndian *ife Assurance Companies Act in 1912. A number of amendments to this Act were made until the +nsurance Act was drawn up in 193). Coteworth% features in the Act were the power given to the :overnment to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. 6hen the Act was changed in 195,> this meant far reaching changes in the industr%. The e#tra reBuirements included a statutor% reBuirement of a certain level of eBuit% capital> a ceiling on share holdings in such companies to prevent dominant control /to protect the public from an% adversarial policies from one single part%0> stricter control on investments and> generall%> much tighter control. +n 195!> the market contained 154 +ndian and 1! foreign life insurance companies. <usiness was heavil% concentrated in urban areas and targeted the higher echelons of societ%. D8nethical practices adopted b% some of the pla%ers against the interests of the consumersE then led the +ndian government to nationali=e the industr%. +n $eptember 195!> nationali=ation was completed> merging all these companies into the so3called *ife +nsurance Corporation /*+C0. +t was felt that Dnationali=ation has lent the industr% fairness> solidit%> growth and reach.E So!e of the i!portant !ilestones in the life insurance "usiness in India areF ()(*F The +ndian *ife Assurance Companies Act enacted as the first statute to regulate the life insurance business. ()*+F The +ndian +nsurance Companies Act enacted to enable the government to collect statistical information about both life and non3 life insurance businesses.
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(),+F "arlier legislation consolidated and amended to b% the +nsurance Act with the ob(ective of protecting the interests of the insuring public. ()-.F The market contained 154 +ndian and 1! foreign life insurance companies. (),+F reviewed and comprehensive legislation was enacted ()/,FCon3life insurance business was nationali=ed and :eneral +nsurance <usiness /Cationali=ation0 ACT 19&2 was promulgated. The efficient and Bualit% functioning of the ublic $ector +nsurance Companies. The untapped potential for mobili=ing long3term contractual savings funds for infrastructure. The /Congress0 government set up +nsurance set u an +nsurance -eforms committee in April 1993. The committee submitted its report in 4anuar% 1994> recommended a phased program of liberali=ation> and called for private sector entr% and restructuring of the *+C and :+C. " e !nsurance Regu0atory and %eve0opment Aut ority 1!R%A2 -eforms in the +nsurance sector were initiated with the passage of the +-.A <ill in arliament in .ecember 1999. The +-.A since its incorporation as a statutor% bod% in April 2,,, has fastidiousl% stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decision taken simultaneousl% to provide the supporting s%stems to the insurance sector and in particular the life insurance companies was the launch of the +-.A@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 e#pected to be introduced b% earl% ne#t %ear. $ince being set up as an independent statutor% bod% the +-.A has put in a framework of globall% compatible regulations. +n the private sector 12 life insurance and ! general insurance companies have been registered

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C'7 ACG -'2+*" '2 1.2C 3 $TAC.A-. *+2"

The compan% was incorporated on 14th August 2,,, under the name of 1.2C $tandard *ife +nsurance Compan% *imited. Their ambition from the beginning was to be the first private compan% to re3enter the life insurance market in +ndia. 'n the 23rd of 'ctober 2,,,> this Ambition was reali=ed when 1.2C $tandard *ife was the first life compan% to be granted a Certificate of registration. 1.2C are the main shareholders in 1.2C $tandard *ife> with )1.4H> while $tandard *ife owns 1).!H.1.2C $tandard *ife +nsurance Compan% *td. is one of +ndia@s leading private life insurance companies> which offers a range of individual and group insurance solutions. +t is a (oint venture between 1ousing .evelopment 2inance Corporation *imited /1.2C *td.0> +ndia@s leading housing finance institution and one of the subsidiaries of $tandard *ife plc> leading providers of financial services in the 8nited Iingdom. 1.2C +ncorporated in 19&& with a share capital of -s 1, Crores > 1.2C has since emerged as the largest residential mortgage finance institution in the countr% The corporation has had a series of share issues raising its capital to -s. 119 crores. The gross premium income for the %ear ending 7arch 31> 2,,& stood at -s. 2> )5! crores and new business premium income at -s. 1>!24 crores. The compan% has covered over )>&&>,,, lives %ear ending 7arch 31> 2,,&. 1.2C operates through almost 45, locations throughout the countr% with its corporate headBuarters in 7umbai> +ndia. 1.2C also has an +nternational 'ffice in .ubai> 8A"> with service associates in Iuwait> 'man and Jatar. $ome facts about the compan% are as follows3 K +ncorporated in 19&& as the first speciali=ed 7ortgage Compan% in +ndia. K Almost 9,H of initial shareholding in the hands of domestic institutes and retail investors. Current &&H of shares held b% foreign institutional investors. K <esides the core business of mortgage 1.2C has evolved into a financial conglomerate with holdings +nF
1.

 1.2C $tandard *ife insurance Compan%3 1.2C holds &).,& H. 1.2C Asset 7anagement Compan% L 1.2C holds 5,.1H 1.2C <ank3 1.2C holds 22.25H. +ntele net :lobal /<usiness rocess 'utsourcing0 L 1.2C holds 5,H.

1.2C Chubb :eneral +nsurance Compan% L 1.2C holds &4H.

I"G *AG"-$

Mr.Deepak S Parekh

Mr.Keki M Mistry

3r. %eepa4 S Pare4 is the Chairman of the Compan%. 1e is also the "#ecutive Chairman of 1ousing .evelopment 2inance Corporation *imited /1.2C *imited0. 1e (oined 1.2C *imited in a senior management position in 19&). 1e was inducted as a whole3time director of 1.2C *imited in 19)5 and was appointed as its "#ecutive Chairman in 1993. 1e is the Chief "#ecutive 'fficer of 1.2C *imited. 7r. arekh is a 2ellow of the +nstitute of Chartered Accountants /"ngland M 6ales0. 3r. 5e4i 3. 3istry (oined the <oard of .irectors of the Compan% in .ecember> 2,,,. 1e is currentl% the 5ice Chairman and Chief "#ecutive 'fficer of 1.2C *imited. 1e (oined 1.2C *imited in 19)1 and became an "#ecutive .irector in 1993. 1e was appointed as its 7anaging .irector in 2,,,. 7r. 7istr% is a 2ellow of the +nstitute of Chartered Accountants of
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+ndia and a member of the 7ichigan Association of Certified ublic Accountants. :-'8 C'7 AC+"$ 1.2C <ankF 6orld Class +ndian <ank3 among the top private banks in +ndia. 1.2C A7CF 'ne of the top 3 A7Cs in +ndia3 referred investment manager. +ntelenet :lobalF < ' services for international customers. C+<+*F Credit +nformation <ureau +ndia *imited. 1.2C ChubbF 8pcoming :eneral +nsurance. 1.2C 7utual 2und 1.2C realit%.comF 1elps to search properties in all ma(or cities in +ndia 1.2C securities rivate companies in the field of

S"AN%AR% '!FE $tandard *ife is "urope@s largest mutual life assurance compan%. $tandard *ife> which has been in the life insurance business for the past 1)5 %ears is a modern compan% surviving Buite a few changes since selling its first polic% in 1)25. The compan% e#panded in the 19th centur% from kits original "dinburgh premises> opening offices in other towns and acBuitting other similar businesses. $tandard life currentl% has assets e#ceeding over &, billion under its management and has the distinction of being accorded DAAAE rating conseBuentl% for the si# %ears b% standard and poor. Currentl% 5 million polic% holders benefiting from the services offered.
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6oint 7enture
1.2C is considered as one of the first compan% to approach for private insurance certification in +ndia. +t has reached man% standards and won man% awards> respect and accolades from various trusts. 1.2C life is rated NAAA@ b% both C-+$+* and +C-A. $tandard life is also a leading compan% and has long e#perience and customer satisfaction in insurance and running successfull% for 1)5 %ears. $tandard life is mainl% a parent compan% who creates and guide the child compan% 1.2C life towards various aspects of insurance sector. $tandard *ife is rated NAAA@ b% 7ood%@s and $tandard and poor@s. The (oint venture of both the big firms creates a better brand image and trust worthiness. Through (oint venture it is also following the regulation of (oint venture of private companies under +-.A act. The asset base of 1.2C life and $tandard *ife is 15,,, crore and !,,,, crore respectivel% which reflects the strength of both the organisation in terms of capital asset value. 1.2C is the ma(orit% stakeholder in the insurance (v with )1.4H as staple and standard of as staple 1).!H. <oth the companies are long term pla%ers and gain trust ethicall% and bring financial strength through (oint hands of both.

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Corporate objectives and va0ues

7ision NThe most successful and admired life insurance compan%> which means that we are the most trusted compan%> the easiest to deal with> offer the best value for mone%> and set the standards in the industr%@. NThe most obvious choice for all@.

7a0ues

+ntegrit%3 adherence to moral and ethical principles.

+nnovation3"ncourage innovation continuousl% and Customer centric3<e friendl% with customer and win the trust of customer. Customer satisfaction is the basic importance in terms of values Team work3"ncourage better team work competition with harmon% in different groups. and health%

eople care one for all36ork for people ethicall% and earn a goodwill through best services.

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 4o% and simplicit%3To create a re(oicing and (o%ful environment in work place for better output and create simple functions for easiness with customer and emplo%ees both.

Corporate acco0ades and recognition

-ated b% O<usiness worldO as O+ndiaOs 7ost -espected rivate *ife +nsurance Compan%O in 2,,4. -ated as the P<est Cew +nsurer 3 2,,3P b% 'utlook 7one% maga=ine> +ndia number 1 personal in finance maga=ine. +n %ear 2,,) received some prestigious awards like $I7 Bold 166 and $I7 Security Awards for ris bearing and inno"ation+ %$ 8uest Best IT Implementation Award for "ast IT application on training+ in"entory+ licensing etc as a part of consultant corner+ sil"er abby at goa fest through AAAI for ad"ertisement and 9nit :in ed Sa"ings %lan Tops ;int Best T& Ads Sur"ey. -eceived C+' OThe +ngenius 1,, 2,,9O Award for 3 rd consecutive %ear for taking securit% to higher level of technological e#cellence and diamond edge award 2,,9 for its mobile workforce portal in the %ear 2,,9. :ot the laurel to be named among the top 5, companies to work with according to stud% conducted b% the :reat lace to 6orkQR +nstitute> +ndia in partnership with The "conomic Times. +t ranked 34th among 5, companies in +ndia in 2,1, edition. Also <=oungStar Super< &oted <%roduct of the
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=ear !616< according to consumer sur"ey of product inno"ation !616.

Product and Services provided by #%FC 0ife insurance

The tagline of 1.2C life N$ar 8tha ke (i%o@ trul% fits the activities done b% 1.2C life insurance. 'ne can feel the respect> securit% and emotion behind the words. 1.2C life gives benefit not onl% for future risk but ensures financial securities b% providing better returns through various popular plans. 1.2C offers plans for both risk cover and investment purpose. All the plans are mainl% based on following plans3 Conventional 8nit3*inked lan Conventional lan3These are plans which are traditionall% followed and returns are generall% fi#ed. Customer are used to conventional plan and are widel% used. The returns bonuses are paid after maturit% of the polic% but fle#ible plans are also available for customers. $ome of the best suited e#amples are children plans, retire!ent plans etc. The returns are stable and risk are ver% low. Su!#assured$ and 2und value with ter!inal "onuses$ are given on maturit%. 'ther benefits given are accidental aids benefit> risk protection of finance of sudden uncertainties. Covers$ are the rate at which sum assured is multiplied to give the actual rate of return for certain period.
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8nit3*inked lan L 8nit linked plan are also popularl% known as 8*+ plans. These plans are new concept which depends on securit% market. The plans rel% on highest CA5 /Cet Asset 5alue0 of market. The plans are mainl% for investment purpose and are designed for the need for customer who urges for higher return. The risk is high but return is high. olicies like Crest gives guarantee on higher return through highest return in the plan period. 'ther e#amples are pro growth super, new !one% "ac& polic% etc' There is also provision of funds like short ter! fund$, inco!e fund$, "alance fund$, "lue chip fund$ and opportunit% fund$ . The risk and returns increases respectivel% with different funds. The customer has option to choose an% of this fund and invest in it. The% also can use the option of switching in which the% can wholl% or partiall% transfer their mone% from one fund to another and nominal amount is charged for switching option of the fund.
/ NS@ denotes that look for anne#ure at the back0

Protection p0ans The protection plan is for safeguarding well being of the famil% and protects from uncertain financial scarcit% in time of need. The protection plan mainl% covers the uncertain demises> critical illness> accidental assistance for finance> ma(or operations and transplants. This plan helps to protect famil% and individual for future. $ome of plans provide b% 1.2C life under this heading 3 1.2C Term Assurance lan 1.2C remium :uarantee lan

1.2C *oan Cover Term Assurance lan 1.2C 1ome *oan rotection lan

C i0dren8s p0an The children@s plan mainl% emphasis on benefit of child in future. The plan covers child to %oungsters .The plan is designed to secure a better
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life with protection from uncertainties and give financial strength for future development of the Children. +t indirectl% fulfil the need of education> marriage etc. $ome of plans provide b% 1.2C life under this heading 3 1.2C $* Goungstar $uper ++ 1.2C $* Goung$tar $uper remium

1.2C ChildrenOs lan

#ea0t P0ans 1ealth lans give the benefit for risk of health problems due to change in lifest%le> age> geographical condition> critical activities like e#posure to radioactive material. +t ensures the polic% holder is in safet% financial no matter how critical the illness is. $ome of plans provide b% 1.2C life under this heading L HD*$ $ritical $are %lan HD*$ Surgi$are %lan Saving and !nvestment P0ans A wise famil% will definitel% invest on securing the future and gain financial favour through its own investment and gain more return. +nvestment lans assures the customer lump sum amount as interest and bonus. The plan also motivates to save and invest more rather than spending. 2or faster growth and prosperit% saving and investment are best suited for customer. 7ainl% %oung entrepreneur can choose this option. The plan pave the wa% to financial goal. 1.2C life gives different financial consultanc% support on investment plans purposes through e#perts and suit the plan according to need of customer. $ome of plans provide b% 1.2C life under this heading 3 1.2C $* Crest
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1.2C $* ro:rowth $uper ++ 1.2C $* ro:rowth 7a#imiser 1.2C "ndowment Assurance lan 1.2C $* Cew 7one% <ack lan 1.2C $ingle remium 6hole of *ife +nsurance lan 1.2C Assurance lan 1.2C $avings Assurance lan 1.2C $* ro:rowth 2le#i 1.2C $* "ndowment :ain +nsurance lan 1.2C $* ClassicAssure +nsurance lan 1.2C *ife $ampoorn $amridhi +nsurance lan

Retirement P0ans )etirement plans mainly emphasis on financial stability and security after retirement of policyholder. The policy holder does not ha"e to face scarcity of money to fulfil his/her need or depend on others for money and he/she can lead a respectful life through this plans. )etirement %lan pro"ide them tool to accumulate their sa"ings from regular income. %ension plans are becoming more critical today as one>s li"ing standard+ inflation etc. $ome of plans provide b% 1.2C life under this heading 3

1.2C ersonal ension lan 1.2C +mmediate Annuit% 1.2C $* ension 7a#imus 1.2C *ife Classic ension +nsurance lan
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Rura0 Products and Socia0 Products

1.2C life also provides services to rural development and encourages small savings in rural areas. 1.2C life also insure development of large group and provide lump sum amount in times or reBuirement or maturit% whichever ends first .The dealing in this area is comparativel% lesser than other plans but it is raising for compan%. $ome of plans provide b% 1.2C life under this heading 3 -ural roducts

1.2C :ramin <ima Ial%an Go(ana 1.2C :ramin <ima 7itra Go(ana 1.2C <ima <achat Go(ana $ocial roducts

1.2C .evelopment +nsurance lan

S9O" ANA'$S!S OF "#E OR:AN!SA"!ON $T-"C:T1 $trong brand name which creates trust among the mass .omestic pla%er in the countr% therefore knows the market better 7ore competitive sense and better eBuipped with man power lo%alt%. 2irst mover advantage in +nsurance market in +ndia. $trong 2inancial hold in assets and securities. *iberali=ation and rivati=ation are giving e#posure towards foreign investment. *arge pool of technical knowledge> skilled and talented emplo%ees are available. Association with ver% highl% Bualified> e#perienced and trusted Compan% call $tandard life. 6"AIC"$$ eople rel% on private insurance less because it is new concept in +ndia and *+C is having alread% good hold in the market. Cost of management is heav% in managerial activities like recruitment> training> purchases as insurance sector definetl% reBuire this activities. The returns profit in starting is low as huge investment is done and returns began to come in later period which ma% sometime be difficult for compan% to operate in liBuidit% prospect
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oor retention tied up agents.

'-T8C+T+"$ *arge +ndian market which is une#plored and untapped even now. :rowing standards of people and open thinking of new generation of Nspending rather than saving@. 6orld class standard and e#pertise has a huge opportunit% towards setting standards. +nternational companies can help setting a trend and a standard. <etter outsourcing opportunities in +ndian market through technical skills of +ndian e#perts.

T1-"AT$ Cut throat competition b% the other leading pla%ers like *+C>$<+ +nsurance> <irla $unlife etc. Attraction towards +ndian market and entrance of big pla%ers like A+: through (oint venture with +ndian big pla%ers like TATA> -eliance etc. Attractive offers and rigorous innovation can divert the minds of customers towards other pla%ers. *arge number of competitors and still the number of competitors are growing.

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Comparative Anal%sis of +nsurance 7arket in +ndia 2,1,32,11

Some of t e major p0ayers in !ndian 0ife insurance mar4et < ic are <it competition to #%FC 0ife are as fo00o<s3

*ife +nsurance Corporation of +ndia /*+C0 $<+ *ife +nsurance Compan% *imited . 7a# Cew Gork *ife +nsurance Co. *td. +C+C+ rudential *ife +nsurance Compan% *td. 'm Iotak 7ahindra *ife +nsurance Co. *td. <irla $un *ife +nsurance Compan% *td. Tata A+: *ife +nsurance Compan% *td. +C: 5%s%a *ife +nsurance Compan% rivate *imited
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Allian= <a(a( *ife +nsurance Compan% *td. 7etlife +ndia +nsurance Compan% vt. *td. A7 $AC7A- Assurance Compan% *td. .abur C:8 *ife +nsurance Compan% vt. *td.

*+C and is at the pinnacle as it is the oldest running insurance giant in the countr% and government undertaking compan%. 'ther private companies which follow with high rise are Tata A+:> <irla sunlife> Iotak 7ahindra and <a(a( Allian=. The main reason behind *+C in top slot is that it had gained trust with the people for so man% %ears and build a big market share. eople are slowl% gaining trust on private pla%ers but are not full% confident on investing on private pla%ers. +n short *+C has built a monopol% in the market.$<+ life insurance compan% ltd. is also performing well as a government compan%. The private pla%ers have to compete more for establishing their name in the market. $o far man% private companies were established after 2,,, after government deregulated act for privati=ation of +nsurance. The private pla%ers are new to the market and are in process to gain some reputation and market share. 7an% private has collaborated with e#perienced foreign giants to give better output and gain e#perience and also following the regulations of +-.A to (oint venture with parent compan% of private companies.

A Comparative stud% of different life insurance companies operating in +ndia 2,11

.iagram Courtes%F www.freepress.in

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As per the diagram the biggest pie is possessed b% *+C with 5,H share. +C+C+ prudential is the second in share with 1,H and first in private sector to have the bigger pie. 1.2C life market share has overall !H. 1.2C life has increased its share from 4.!H /2inancial %ear32,,)0 to !H /2,1, .ecember0 which is appreciable. The share ma% look tin% but is e#pected to grow to 9H due to rise in market shares and growing trust among people on 1.2C life. The returns are also coming back after long investment graduall% for the compan% which shows positive sign. <ut comparing to man% rivate companies e#cept +C+C+ prudential 1.2C life market share is comparativel% is in descent =one and can be placed in second in private sector market share as per diagram. 'ther companies like -eliance> <a(a(> 7a#> <irla> Tata> 7et and Iotak are holding market shares of 5H> 4H> 3H> 4H> 2H> 1H and 2 H respectivel%. 'ther pla%ers holds ) H of total market share.

Apri0 *=(= to February *=(( As per the statistics released b% the +nsurance -egulator% and .evelopment Authorit% /+-.A0> the life insurance industr% collected weighted new business premium income of -s5&4 billion in the first eleven months of 2G2,1,311 /April 2,1, to 2ebruar% 2,110. rivate sector life insurers witnessed a decline of 15.1 per cent in their weighted new business premium in this period> while state3owned insurer *+C registered a significant increase of !1., per cent in its weighted new business premium collection. As a result> the weighted new business market share of private sector life insurers decreased to 4,., per cent compared to 55.9 per cent in the corresponding period of 2G2,,931,.
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.espite e#periencing a negative growth of 12.9 per cent> +C+C+ rudential maintained its position as the market leader> a position which it has held since the beginning of this financial %ear. $<+ *ife ranked second> with a negative growth of 33.2 per cent> down from its position as the market leader in 2G2,,93 1,. 1.2C *ife> which was ranked fourth in the same period the previous financial %ear> registered a 13., per cent growth and progressed to the third position. 'f the 22 private life insurers> onl% eight registered positive growth in weighted new business premium in the first eleven months of 2G2,1,311. This list of positive performers includes three companies among the top 1, 3 1.2C *ife> 7a# Cew Gork *ife and Canara 1$<C '<C *ife> with the rest being smaller pla%ers with less than one per cent market share. 6ith insurers reported to increase focus on single premium business through more single premium product launches> business under single premium domain witnessed an increase of about 31 per cent in the period April 2,1, to 2ebruar% 2,11 as compared to the same period in the previous fiscal. 7a(or increase was due to the private pla%ers which saw an increase in single premiums of about 21, per cent in this period. The graph given below compares the weighted new business premium income written b% private sector life insurers in the first eleven months of 2G2,1,311 with the same period of 2G2,,931,.

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&'!P Scenario> 8*+ s Contribution To olicies $old +n 2,1,311 /8p To ) 7arch> 2,110

As per *ife +nsurance Council data> an industr% bod% of life insurance companies in +ndia> *ife insurance industr% paid -s 1,954 crore in commission to insurance agents in 9 months during April3.ecember 2,1, period. Total commission paid to agents fell to 5.)) per cent of the total premium collected> against !.41 per cent in the same period last %ear. The number of agents also dipped b% 2>&3>9)4 to 2&>1,>3,1> as compared to 29>)4>2)5 in 2,,9. *ife +nsurance Corporation> the onl% state3owned life insurer> also reduced its agent strength b% !2>95! during the calendar 1.2C life has performed well in 8*+ sector and earned profit from 8*+ plans. 1.2C see better earnings in 8*+ plans therefore tr%ing to concentrate more in 8*+ through various e#isting market securities .8*+ is growing trend in +ndian +nsurance market. A tie with $"<+ and +-.A regulation are followed b% companies to earn faster profit and growth. There is competition in 8*+ sectors .

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Ta#ation on *ife +nsurance

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A brief about taxation in 0ife insurance sector

The life insurance market is overflowing with variet% products like pure life insurance> health insurance> children insurance plan> pension plan etc. giving %ou a wide spectrum to choose from. *ife insurance is an ama=ing ta#3saving tool and an indispensable part of an individualOs financial planning e#ercise. *ife +nsurance is a critical part of an individualOs personal insurance portfolio. +tOs a strategic part of the future securit% that one must provide for oneOs famil% in the face of the inevitable. +nsurance is an important part of +ncome ta# regulation. The proper t%pe and the appropriate level of life insurance can be a matter of life and death. $ecuring the long3term financial securit% and Bualit% of life for the people %ou love most is crucial> and the first step in securing it is life insurance. 7an% individuals also look at life insurance from ta# planning perspective.

INCOME-TAX SURCHAR E RATE AS PER INCOME OF INDI!IDUAL AND HUF

A? !NCO3E>"A@ RA"ES FOR ASSESS3EN" $EAR *=((>*=(* 1F!NANC!A' $EAR *=(=>*=((2 "ax Rates !ncome S0abs !ndividua0 A #&F 9oman be0o< age of .-!ndividua0 above age of be0o< age of .- years .- years years +ncome -s.1>!,>,,, -s.1>!,>,,1 -s.5>,,>,,, -s.5>,,>,,1 -s.)>,,>,,, upto +ncome upto -s.1>9,>,,, +ncome upto -s.2>4,>,,, C+* to -s.1>9,>,,1 -s.5>,,>,,, to -s.5>,,>,,1 -s.)>,,>,,, Above -s.)>,,>,,1 to-s.2>4,>,,1 -s.5>,,>,,, to -s.5>,,>,,1 -s.)>,,>,,, Above -s.)>,,>,,1 to1,H to 2,H 3,H

Above -s.)>,,>,,1

Education Cess B An additional surcharge called as N"ducation Cess@ is levied at the rate of 2H on the amount of +ncome ta# and surcharge /if an%0 in all cases shall be levied. Secondary and #ig er B An additional surcharge> called the P$econdar% and 1igher "ducation Cess on income3 at the rate of 1H of income3ta# and surcharge /not including the D"ducation Cess on +ncome3ta#E0 in all cases shall be levied.
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6ith the introduction of the .irect Ta# Code /.TC0> to be implemented from the ne#t financial %ear i.e. April 2,11 onwards> onl% the approved pure life insurance products and annuit% schemes would fall under the """ ta# status. As per the """ ta# regime the investments made into the life insurance polic%> the earnings and the withdrawal all are e#empt from ta#. As per the .TC> rest of the life insurance schemes apart from those stated above would fall in the ""T /"#empt> "#empt> Ta#0 categor% i.e. the withdrawals under these schemes would no longer be ta# free. .TC deals with calculating the income eligible for ta#ation.

Some of t e introductions as per t e %"C are >

The Section -.1*21f2 of t e %"C> states that amount that is received from life insurance polic% including an% amount received as bonus on the polic% will be ta#ed under Ogross residuar% incomeO. The Section -/1,2 of t e %"C deals with deductions applicable on Tgross residuar% income@. According to this section> bonus and an% other amount received on the life insurance polic%> e#cept in case of ke% man +nsurance> will be e#empted from ta# if the premium paid is up to a ma#imum of 5H of the sum assured. Also the receipt from life insurance should be onl% after the completion of the polic% term or in case of death of insured.

.TC is framed with a view to improve the +ndian Ta#ation $%stem> making it at par with the international standards

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!ncome "ax on !nsurance> A Revie<

As we alread% completed the financial %ear march 2,1,311> we start to worr% about planning our investments to ensure ma#imum ta# savings. The fear of finishing and furnishing our +ncome Ta# details> and filing the +T returns on time engulfs us.

7arious Sections re0ating to !ncome "ax

As per The +ncome Ta# Act 19!1> amended in 2,,)> there are 9 ma(or sections 1. Section +=CF
Section 80L used to allow deduction of interest earned on, say, a National Savings Certificate or a bank deposit up to a limit of Rs 1 ,000! "ut now all t#ese are gone !$n t#eir place #as come Section 80C %% &u's 80CCC, ( u's 80CC)&, as t#e *inance "ill puts it! +#us, t#e new Section 80C of t#e $ncome +a, -ct proposed in .nion "udget gives you a bigger ta, break t#an w#at t#e current regime offers!

Deduction in respect of :ife Insurance %remia + $ontribution to %ro"ident *und+ etc. )s 1 la h can be in"ested under this section without any indi"idual sub, limits e#cept in the case of )s 16+666 in pension funds. Sections 44+ 46:+ 46$$$ and 46$$D in. is clubbed

S+'eme, e$i)ib$e %&# Se+ti&

7.C be e%it,

%%* E:SS , ;utual *unds ?S$ @&% :ife Insurance Senior $itiAen Sa"ing Scheme !660 %ost 7ffice Time Deposit Account

Note : % Section 80CCC is for deduction in respect of contribution to certain /ension *unds! Section 80L is for deductions in respect to $nterest on certain Securities, )ividends, etc

Se+ti& , "b&$i,'ed %#&m U i& *ud)et -..80.9 44 B)ebate on :ife Insurance %remia+ $ontribution to %ro"ident *und+ etc.C 46: BDeductions in respect to Interest on certain Securities+ Di"idends+ etc.C

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Note :Rebate of Rs 0,000 for women and Rs 0,000 for senior citi1ens #ave been wiped off!

T'e :e4 %e"tu#e, &% t'e e( !#&;i,i& E#emption a"ailable to all ta#payers irrespecti"e of income brac et ,earlier Section 44 did not pro"ide benefit to those ha"ing income e#ceeding )s 166+666. ?o e#emption/ad-ustment for interest income

All sa"ing modes/options under Section 44 co"ered and also 46$$$ and 46$$D co"ered.

5&$$&(i ) be e%it, (i$$ +& ti ue i##e,!e+ti;e &% +'" )e, Interest paid on housing loan for self,occupied house property. ;edical insurance premium. BAdditional deduction of )s 11666 u/s 46D to an indi"idual paying medical insurance premium for his/her parentBsC

Specified e#penditure on disabled dependant. E#penses for medical treatment for self or dependant or member of an H9*. Deduction in respect of interest on loans for pursuing higher studies , Section 46E. Deduction to person with disability.

7inimum eriod of 1oldingF 8nit3linked +nsurance lan 33 5 %ears> *ife +nsurance remium 33 2 %ears Cost of construction or purchase of residential propert% 33 5 %ears Time deposit in ost 'ffice -ules> 19)1 33 5 %ears $enior Citi=en $aving $cheme -ules> 2,,4 33 5 %ears.

*. Section +=CCCB .eduction for Contribution to ension 2unds ,. Section +=%B. 1ealth +nsurance premiums paid for insuring %our own health> or that of %our spouse> parents and children also allows %ou to avail of ta# rebates C. Section +=%%B An% e#penses incurred on the treatment of a handicapped dependent fall under this section.
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5. Section +=%%<F The deduction is allowed onl% for the diseases; ailments prescribed in -ule 11...

.. Section *C B The interest paid for a personal loan taken for acBuisition> construction and renovation of the house can be claimed for ta# deduction up to -s. 1.5 lakh. /. Section +=EB .eduction in respect of repa%ment of loan taken for higher education ). Section +=:F .eduction in respect of donations to certain 2unds> Charitable +nstitutions etc. 9. Section(=1,,2 .ividends from mutual funds are full% e#empt from income ta# under $ection 1,/330. "Buit% funds /schemes that invest 5, per cent of their funds in eBuit%0 are also e#empt from dividend ta#. This means that unlike companies> the% do not have to pa% ta# at the rate of 1,.2 per cent on the dividend that the% distribute. 1,. Section++ 8pto 31 7arch 2,,5> rebates were available on the ta# pa%able under three sections. According to the section> 3, per cent or 2, per cent or 15 per cent of the amount invested in certain schemes /schemes referred in $ection ),C0 was available as a rebate on the ta# pa%able. 3, per cent of the amount invested was available as rebate onl% if the salar% income of the individual was less than -s. 1 lakh and if it constituted 9, per cent or more of the assessee@s gross total income. 2, per cent of the amount invested was available as rebate if the gross total income of the individual was less than -s 1.5 lakh and the case did not fall under the above mentioned case. +f gross total income was more than -s. 1.5 lakh but less than -s 5 lakh of the individual> a rebate of 15 per cent of the amount invested was available.
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+f gross total income was more than -s 5 lakh of the individual> then there is no rebate.

((. Section ++D 8nder this section> an individual resident in +ndia and above the age of !5 %ears was allowed to a ma#imum rebate of -s. 2,>,,, on the ta# pa%able. 12. Section++C 8nder this section a lad% resident in +ndia> aged below !5 %ears> was allowed a ma#imum rebate on the ta# pa%able of -s 5>,,,. 13. Section+) 1(2 This is available to an emplo%ee when he receives salar% in advance or in arrear or when in one financial %ear> he receives salar% of more than 12 months or receives Oprofits in lieu of salar%O 6.e.f. 1.!.)9> relief u;s )9/10 can be granted at the time of T.$ b% emplo%ees of all companies co3operative societies> universities or institutions as well as govt.;public sector undertakings. The relief should be claimed b% the emplo%ee in 2orm Co. 1," and should be worked out as e#plained in -ule 21A of the +ncome Ta# -ules.

NoteB The ke% point to be remembered in all the cases is that the above e#emptions can be availed onl% if the polic% serves the minimum lock in period term i.e. 3 %ears which is now raised to 5 %ears. +f an individual withdraws the polic% beforehand> these provisions are no longer applicable.

!nstruments t at e0p us Save "ax

*ife +nsuranceF All investments made towards *ife +nsurance are eligible for are bate u;s ),C of the +ncome Ta# Act. *ife +nsurance products with a minimum lock in period of 3 %rs onl% are eligible for the rebate. remiums paid under pension plans of various life insurers are also eligible for Ta# rebate. The ma(or advantage of a *ife +nsurance product is that the% provide ta# free interest income. "Buit% *inked $aving $chemesF These are 7utual 2und products and carr% market risk. These too> like life insurance products> are eligible for ta# rebate u;s ),C> if the% have a lock in period of 3 %ears. A ma(or disadvantage of these instruments is that the% do not provide life cover. ublic rovident 2undF These are 15 %ear long investments and provide ta#3free returns. The current rate of returns is )H. 7a#imum investment allowed under this instrument is -s. &,> ,,,> which is eligible for a rebate u;s ),C.
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 <ank .epositsF Ta# rebate is available for 5 %rs deposits in an% scheduled bank. The point to remember is that the entire interest income is ta#able. Cational $aving CertificatesF :overnment sponsored securities certificates> which are available in denominations of -s. 1,,> -s.5,,> -s. 1,,,> -s.5,,, M -s. 1,>,,, ma% be purchased from an% post office> either directl% or through authori=ed agents. The% currentl% provide a rate of interest U ).1!H p.a. compounded half %earl% and paid after the maturit% period of si# %ears along with principal. +nterest accruing annuall% is automaticall% reinvested and such re invested interest also Bualifies for rebate u;s ),C of +ncome Ta# Act. The interest earned is completel% ta#able.

1ome *oansF $ection 24 of the +ncome Ta# Act allows %ou to deduct the total interest paid on %our home loan from %our ta#able income for the same financial %ear. Gou can also claim arebate u;s ),C for the principal amount repaid on the home loan. Tuition 2eeF The entire tuition fee paid for up to two children is e#empted from ta#. .onations of an%kind like development fee etc. are e#cluded from the same. *oan on 1igher "ducationF Those servicing a loan taken for higher education can claim a deduction on the interestpaid for the loan u;s )," of the +ncome Ta# Act. Currentl% there is no ceiling on theinterest amount that can be claimed under this section. The principle amount is however completel% ta#able 1ealth +nsurance lansF -ebate is available u;s ),. of the +ncome Ta# Act> for premiums paid for self> spouse> children and parents. A limit of -s.15> ,,, is fi#ed for premiums paid for self> spouse and children@s. There is an additional benefit of -s. 15>,,, on premiums paid for parent/s0 and in case the parents are senior citi=ens> the upper limit increases to -s.2,>,,, . "n(o% .ual Ta# <enefits with *ife +nsuranceF $ave ta# on -egular remium pa%m ents 3 All the premiums paid towards insuring %our life are e#empted from ta# up to -s. 1>,,>,,,;3 as specified in section ),C of the +ncome ta# act. "n(o% Ta# free 7aturit% returns 3 'ne of the biggest advantages of investing in *ife +nsurance policies is that> the complete maturit% amount is ta# free.
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Thus> %ou save ta# not onl% at the time of investing in a life insurance plan> %ou also get completel% ta# free returns after maturit%.

"ax Denefits on !nsurance and Pension

*ife insurance and retirement plans are effective wa%s to save ta#es when doing %our %earend ta# planning. To assist in ta# planning> the ta# breaks that are available under our various insurance and pension policies are described belowF 1. 1.2C life@s life insurance plans are eligible for ta# deduction under $ec. ),C. 2. 1.2C life@s ension plans are eligible for a ta# deduction under $ec. ),CCC. 3. 1.2C life@s health insurance plans;riders are eligible for ta# deduction under $ec. ),.. 4. The proceeds or withdrawals of our life insurance policies are e#empt under $ec1,/1,.0> sub(ect to norms prescribed in that section. A life insurance ta( shelter uses investments in life insurance to protect income or assetsfrom ta# liabilities. *ife insurance proceeds are not ta#able in man% (urisdictions. $ince mostother forms of income are ta#able /such as capital gains> dividends and interest income0>consumers are often advised to purchase life insurance policies to either offset future ta#liabilities> or to shelter the growth of their investments from ta#ation

'ife insurance to cover future taxes

+n those (urisdictions where life insurance proceeds are onl% ta# free at death> ta# liabilities that come due at death are often offset b% a polic% of the same si=e. $ince the mathematics reBuired to compare different strategies is Buite comple#> most consumers defer to an accountant or life insurance agent for advice. 1owever> there are often vast differences of opinion between these professionals> even given the same starting conditions. This should not be surprising> given the huge future differences that even small variances in starting conditions can make. 2or e#ample> assume that an individual is likel% to owe V1,,>,,,.,, in ta#es at death. +f a permanent life insurance polic% with a V1,,>,,,.,, death benefit costs V1>,,, per %ear /remaining level for life0> and the life e#pectanc% of the person is 3, %ears> then thefollowing events could occur.
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The individual could die earl%. +n this case> it is unlikel% that an% alternative investment of the V1,,, per %ear would have %ielded the reBuired V1,,>,,,.,, at death. The individual could live much longer than e#pected. The individual could have built up a significant cash value within the polic%> depending on investment selection. As such> the individual would have access to these cash values ta#3free regardless of growth> provided it is set up properl%. $ince one normall% does not know which of these will occur /see adverse selection0 calculations must be based on e#pected life e#pectancies for people of similar gender> ph%sical condition> and behaviour.

'ife insurance to s e0ter investment gro<t and income

+n an attempt to achieve the Pbest of both worldsP /protection in the case of earl% death> and additional ta#3protected returns in the case of long life0> life insurance policies were created containing investment accounts having preferential ta# treatment. This is most often done with a 5ariable universal life polic%. $ee that article for some discussion of the ta# issues.

S&me im!&#t" t t"< be e%it, ";"i$"b$e u de# ;"#i&u, !$" , &% $i%e i ,u#" +e "#e 'i)'$i)'ted be$&(0

D? SO3E !3POR"AN" !NCO3E "A@ DENEF!"S A7A!'AD'E &N%ER 7AR!O&S P'ANS OF '!FE !NS&RANCE ARE #!:#'!:#"E% DE'O9B (2 %eduction a00o<ab0e from !ncome for payment of 'ife !nsurance Premium 1Sec. +=C2. /a0 *ife +nsurance premia paid in order to effect or to keep in force an insurance on the life of the assessee or on the life of the spouse or an% child of assessee M in the case of 182> premium paid on the life of an% member thereof> deduction allowed upto 2,H of capital sum assured during an% financial %ear. /b0 Contribution to deferred annuit% lans in order to effect or to keep in force a contract for deferred annuit%> on his own life or the life of his spouse or an% child of such individual> provided such contract does not contain a provision to e#ercise an option b% the insured to receive a cash pa%ment in lieu of the pa%ment of annuit% is eligible for deduction. /c0 Contribution to ension;Annuit% lans 3 Cew 4eevan .hara3+ M 4eevan Aksha%a 3 5+
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*2 6eevan Nid i P0an A Ne< 6eevan Sura4s a > ! P0an 1&Es. +=CCC2 A deduction to an individual for an% amount paid or deposited b% him from his ta#able income in the above annuit% plans for receiving pension /from the fund set up b% the Corporation under the ension $cheme0 is allowed. NO"EB The premium can be paid upto -s.1>,,>,,,;3 to avail deduction u;s.),C> ),CCC M ),CC. /),CC.3 .eduction in respect of contribution to pension scheme of Central :overnment.0. 1owever> there is no sectoral cap i.e. the limit of -s.1>,,>,,,;3 can be e#hausted b% pa%ing premium under an% of the said sections. ,2 !nvestment under 0ong>term infrastructure bonds notified by t e Centra0 :overnment. 1Sec. +=CCF2 A deduction up to -s. 2,,,,;3 is available to individuals and 182 for amount paid or deposited as subscription to long3term infrastructure bonds notified b% the Central :overnment. This is in addition to -s. 1 lakh deduction available under section ),C. ,2 %eduction under section +=% 1. .eduction allowable upto -s.15>,,,;3 if an amount is paid to keep in force an insurance on health of assessee or his famil% /i.e. $pouse M children0 2. Additional deduction upto -s.15>,,,;3 if an amount is paid to keep in force an insurance on health of parents 3. +n case of 182> deduction allowable upto -s.15>,,,;3 if an amount is paid to keep in force an insurance on health of an% member of that 182
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C2 6eevan Aad ar P0an 1Sec.+=%%2 B .eduction from total income upto -s.5,,,,;3 allowable on amount deposited with *+C under 4eevan Aadhar lan for maintenance of an handicapped dependent /-s.1>,,>,,,;3 where handicapped dependent is suffering from severe disabilit%0 -2 Exemption in respect of commutation of pension under 6eevan Sura4s a A 6eevan Nid i P0ansB 8nder $ection 1,/1,A0 /iii0 of the +ncome3ta# Act> an% pa%ment received b% wa% of commutations of pension out of the 4eevan $uraksha M 4eevan Cidhi Annuit% plans is e#empt from ta# under clause /23AA<0. .2 !ncome tax exemption on 3aturityE%eat C0aims proceeds under Section (=1(=%2 8nder the provisions of section 1,/1,.0 of the +ncome3ta# Act> 19!1> 7aturit%;.eath claims proceeds of life insurance polic%> including the sum allocated b% wa% of bonus on such polic% /other than amount to be refunded under 4eevan Aadhar +nsurance lan in case of handicapped dependent predeceases the individual or amount received under a Ie%man +nsurance lan0 is e#empted from income3ta#. 1owever an% sum /not including the premium
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paid b% the assessee0 received under an insurance polic% issued on or after the 1st da% of April> 2,,3 in respect of which the premium pa%able for an% of the %ears during the term of the polic% e#ceeds 2,H of the actual capital sum assured will no longer be e#empted under this section.

DDDDDDDDDDDDDDD

$7?$:9SI7?

:ife Insurance plays a "ital role and has become an important part in our life. This is a popular medium which assures us hope to lead a better life with financial security and strength and ma e us care free from un nown financial ris such as scarcity in times of need in future. It is truly a noble -ob. Eith change in time the face of insurance sector has changed and grown to better le"el because of the comple#ity in the social+ political and culture. Insurance has become a new medium of in"estment. The best part is that ta# is not le"ied in life insurance plans. So many in"estors ta e it as a better option to in"est for sa"ings and relief from ta#. :ife Insurance is surely beneficial and encourages sa"ing. The purpose behind life Insurance is not only in"estment or ta# sa"ing but also to create "alue for money. It promises stability of our hard earned money and gi"es e#tra benefits in return li e

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bonus+ accidental aids+ bonus+ sa"ings+ child and retirement benefits etc. The pri"atisation of Insurance companies by go"ernment of India created a milestone in booming of Insurance mar et in India. $ompanies li e HD*$ life has are new born babies in this sector but they ha"e huge scope in future to come. The main strength of HD*$ life is nowing of domestic mar et better so it should ta e more ad"antage from its strength. The standard in ser"ice of Insurance mar et is flourishing due to entry of many pri"ate companies but competition has grown in much faster pace. Therefore new born companies and foreign companies has to be more competiti"e+ alert+ aware and inno"ati"e to sur"i"e in such scenario.

Appendi#

Da0anced fund A t%pe of fund for d%namic eBuit% e#posure to enhance the returns while the debt allocation reduces the volatilit% of returns. D0ue C ip Fund "#posure to large3cap eBuities and eBuit% related securities Cover /pg no.1)0 6ord for insurance? it also refers to the amount of insurance. This is generall% multiplied with sum assured to get certain insured amount.+t can also be refered as rate. !ncome Fund /pg no.1)0 2und which has higher potential returns due to higher duration and credit e#posure. S ort "erm Fund /pg no.1)0
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*ow Capital risk as e#posure is onl% to short3term securities /ma# 33%ear residual maturit%0 Sum assured /pg no.1)0 The amount of cover taken under a life insurance polic%> it is the minimum amount that will be paid on death of the polic%holder during the polic% term. "ermina0 bonus /pg no.1)0 A one3time bonus paid on maturit% of a with3profit plan Opportunity fund /pg no.1)0 "#posure to mid cap eBuities and eBuit% related securities

Bibliography

websites
www.mone%control.com www.hdfclife.com www.irdaindia.com www.wikipedia.com www.authorstream.com www.scribd.com www.investmentmone%.com
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www.incometa#india.gov.in

4ournals and books eraswam%> .> rinciples and ractices of +nsurance> 1st edition> 1imala%a ublishing house 2,,3.

'utlook mone% "conomic times

SSSST1ACI G'8SSSS

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