Professional Documents
Culture Documents
CERTIFICATE
This is to certify that kapil soni student of BBA 3rd Year at Om Kothari
Institute of Management and Technology , has completed Tanning Project
Report entitled Platinum plus plan and its comparison
The project has been completed after study for one year in BBA course and
for partially fulfilling the requirements for award of degree of Bachelor of
Business Administration of University of Kota, Kota.
The Tanning Project Report has been completed under the guidance of Mr.
pradeep gupta of OKIMT and is as per norms and guidelines provided.
CERTIFICATE
This is to certify that kapil soni a student of BBA 3rd Year at Om Kothari
Institute of Management and Technology, has completed Training Project
Report entitled Platinum plus plan and its comparison
The project has been completed after study for one year in BBA course and for
partially fulfilling the requirements for award of degree of Bachelor of Business
Administration of University of Kota, Kota.
The Training Project Report has been evaluated and viva-versa conducted by
the undersigned panel of examiners. The project has been found
satisfactory/unsatisfactory and is recommended/not recommended for
acceptance.
Prof. Prof.
Internal Examiner External examiner
Kota
Date:
I am grateful for providing me lot of marketing tools the training period & in
completion of my project despite their pre-occupation with their work.
Its really very difficult to express feelings about BSLI staff for their help and
support. I am thankful to our colleagues for supporting helps me in my
work..
I am also independent all our faculty members for their valuable suggestion and
encouragement they give me whenever I required.
Submitted By
DATE: kapil soni
PLACE: BBA-3rd year
EXECUTIVE SUMMARY
Being a management trainee at BSLI for 3 months aim and wishes were to learn about
the different product of BSLI and experiences the concept of investment
The project file inculdes the conceptual framework of company in which the brief
history of company has been described.
I have taken the experience of plans deeply and have given the best performance i.e.
upto 10 new clients
And the project profile also includes the research methodology in which the research
database has been given.
And at last I have given some interpretation ,conclusions & some suggestion to the
project .Hence it is the brief executive summary of Project.
I hereby declare that the present report entitled Platinum plus plan and
its comparison is based on my original work and indebtedness to other
work / publication has been duly acknowledged at relevant places.
CERTIFICATES
PREFACE
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
DECLARATION
BIBLIOGRAPHY
QUESTIONNAIRE
COMPANY
PROFILE
Introduction
Introduction:-
The purpose of the project is to know about the market for Birla Sun Life
Insurace Company. Birla Sun Life Insurace Company is growing very fast. In
March month Birla Sun Life Insurace Company has maximum business from its
competitors.
In future life insurance sector going to give thousands of vacancies to the students
give their full efforts or 100% target in their summer internship program for
The prime objective of the study was to understand the market and analysis the
competitors.
To find out the market potential for life Insurance Policies in Kota.
To conduct the survey to know how many persons have Life Insurance Policies
or how many dont have.
Company profile: Birla sunlife
Established in 2000, Birla sun Life Insurance Company Limited (BSLI) is a joint venture
between the Aditya Birla Group, a well known and trusted name globally amongst Indian
conglomerates and Sun Life Financial Inc, leading international financial services
organization from Canada. The local knowledge of the Aditya Birla Group combined with
the domain expertise of Sun Life Financial Inc., offers a formidable protection for its
customers future.
With an experience of over 9 years, BSLI has contributed significantly to the growth and
development of the life insurance industry in India and currently ranks amongst the top 5
Known for its innovation and creating industry benchmarks, BSLI has several firsts to its
credit. It was the first Indian Insurance Company to introduce Free Look Period and the
same was made mandatory by IRDA for all other life insurance companies. Additionally,
BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players
in India. To establish credibility and further transparency, BSLI also enjoys the prestige to
development initiatives have helped BSLI be closer to its policy holders expectations,
which gets further accentuated by the complete bouquet of insurance products (viz. pure
term plan, life stage products, health plan and retirement plan) that the company offers.
Add to this, the extensive reach through its network of 600 branches and 1,75,000
reach and ears on ground, helped BSLI cover more than 2 million lives since it commenced
operations and establish a customer base spread across more than 1500 towns and cities in
India. To ensure that our customers have an impeccable experience, BSLI has ensured that
it has lowest outstanding claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the
best Turn Around Time according to LOMA on all claims Parameters. Such services are
well supported by sound financials that the Company has. The AUM of BSLI stood at Rs.
8165 crs as on February 28, 2009, while as on March 31, 2009, the company has a robust
Financial and its partners today have operations in key markets worldwide,
including Canada, the United States, the United Kingdom, Ireland, Hong Kong,
the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31,
2008, the Sun Life Financial group of companies had total assets under
A US $28 billion corporation, the Aditya Birla Group is in the league of Fortune 500.
different nationalities. In India, the Group has been adjudged "The Best Employer in
India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street
Journal Study 2007. Over 50 per cent of its revenues flow from its overseas
operations.
The Group operates in 25 countries India, UK, Germany, Hungary, Brazil, Italy,
is one of the three biggest producers of primary aluminium in Asia, with the
In India:-
Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success
does not come in the way of the need to keep learning afresh, to keep experimenting.
Rajashree Birla
Focusing on: health care, education, sustainable livelihood, infrastructure and
"We care".
Board of Directors
OTHER EXECUTIVES:-
Mr. Ajay Srinivasan
Chief Executive Financial Services Aditya Birla Group
Mr. Bishwanath Puranmalka
Director Financial Services Aditya Birla Group
PROJECT
PROFILE
Platinum plus
IV, which marks a breakthrough in innovation. The launch of this fund sets a
benchmark in the industry as it protects not only your NAV but also its growth. With
Platinum Plus Fund IV, you will enjoy the highest NAV recorded by the fund over the
through the Platinum Plus Fund IV. You are guaranteed the highest NAV recorded by
the fund over the seven year period th th 15 September, 2009 to 15 December, 2016.
employ in managing the Platinum Plus Fund IV, your premiums (net of premium
allocation charges) are used to purchase units in Platinum Plus Fund IV. Thus you will
be allocated units based on the unit price of the fund prevailing on that day.
Thereon the highest NAV ever recorded over 7 years on a day-to-day basis is your
Guaranteed Maturity Unit Price. The Guaranteed Maturity Unit Price starts at Rs. 10
on the first business day, which is 15 th September, 2009. Till 15 December 2016, the
Guaranteed Maturity Unit Price is increased on subsequent business days to the then
To participate in the fund, you must ensure that your application is th made on or
You may pay your policy premiums annually, half-yearly, quarterly or monthly. This is
subject to a minimum instalment premium of Rs. 50,000 for yearly, Rs. 25,000 for
half-yearly, Rs. 15,000 for quarterly, or Rs. 10,000 per month. For the monthly
payment option, you require to pay 3 monthly instalments at the time of issue of the
policy.
100% liquidity after 3 years
On completion of 3 years, you can opt for complete liquidation of your plan. You
can withdraw the entire amount without any charges or penalties. This means
you remain in control of your money and use it as and when you need to.
More benefits
Maturity Benefit:At maturity, you will receive the fund value. In addition, we
will pay an amount equivalent to the number of units multiplied by the excess, if
any, of the guaranteed maturity unit price and the unit price at the time of
maturity.
Plan Summary
Mode of Premium You can pay your policy premiums annually, half-
Payment yearly, quarterly or monthly, subject to a minimum
instalment premium of:
- Rs. 50,000 per annum
- Rs. 25,000 half-yearly
- Rs. 15,000 quarterly; or
- Rs. 10,000 per month (3 monthly instalments
required at issue)
Tax Benefits Under Section 80C and 10(10D) of the Income Tax
Act, 1961
Single premium, unit-linked insurance plans (SP Ulips) from life insurers have been
the preferred flavour for a lot of people who invest through insurance. Their main
draw is the tax break under Section 80C of the Income tax Act, 1961. For many, they
have filled the void left by the Life Insurance Corporations popular fixed-return,
However, there have been quite a few additions to the universe of financial
instruments in recent times, and equity-linked savings schemes (ELSS) are one of
them. They, too, give tax breaks and allow lump sum investment. So how do they
mutual funds (MFs). So, while part of your premium pays the administration charge,
the rest is invested in assets like equities or debt, depending on your choice.
Going by the way you pay your premiums, Ulips can be of two types. The first is the
regular premium paying option, where you pay a fixed amount every year (monthly,
quarterly, half-yearly or annually) for at least the first three years of the policy. The
second is the SP Ulip, where you have to pay a lump sum just once.
If you choose the regular premium option, in the first three years, the cost you have to
bear is about 60 per cent of the premium you pay. Alternatively, if you buy SP Ulips
for three consecutive years, it would cost you around 10 per cent of the premium you
pay every year. So, the SP Ulip is the obvious choice among the two.
The ELSS option. An ELSS is a diversified equity mutual fund scheme. You can
The similarities. For both SP Ulips and ELSS, you have to invest once and the
investment is locked in for three years. Under the present tax laws, what you get on
maturity is tax-free. While in ELSS your entire investment will be in equity, SP Ulips
give you the choice of investing in equity or debt instruments, or both, and the choice
The differences. The biggest difference is that SP Ulips give you a life cover, while
ELSS does not. So the mortality cost of insuring your life is deducted from the value
of the fund every month. When the plan matures, the value of the units, or fund value,
is yours. If a policyholder dies during the plan term, the higher of sum assured or fund
value is paid to the beneficiary. However, some plans like Met Smart Premier of
MetLife Insurance and Bajaj Allianz UnitGain Guarantee SP pay out both, albeit at a
higher cost.
The tax laws. According to the Insurance Regulatory and Development Authority
(Irda), the life cover of a SP Ulip has to be at least 125 per cent of the premium. But
under I-T rules, if the premium paid for a policy is more than 20 per cent of the sum
assured in a year, then deduction from taxable income will be allowed only up to 20
per cent of the sum assured. In other words, to get the entire premium deducted from
taxable income under Section 80C, make sure the cover is at least five times the
premium.
The costs. In an ELSS, the amount invested is subjected to only two charges. One is
the entry cost or the load, which is normally 2.25 per cent of the amount invested.
After the units are allotted, there are recurring charges also called the expense ratio.
For ELSS, the average is around 2.25 per cent of the fund value, while the maximum
For SP Ulips, first there is the premium allocation charge. Akin to the entry load for an
ELSS, it ranges from 2 to 4.5 per cent for amounts below Rs 1 lakh, and goes down
for higher amounts. Then there is fund management cost, which is similar to the MF
assured and the value of the fund. Some SP Ulips also carry a surrender charge for
exiting the plan in the fourth and fifth years as well. Then there is the policy
Irrespective of how the charges come in, the post-charges returns from most SP Ulips
is below that from the ELSS funds for lower amounts. Lower front-end costs often
come with higher mortality rates and policy administration charges, and so on.
The returns. Since both SP Ulips and ELSS have a three-year lock in, to compare
them, one should look at their three-year returns. However, since many of the SP Ulips
have been operating for less than three years, we have considered their last one-year
performance.
Of the 29 open-ended ELSS plans in the market today, the average return as on 16
April 2007 has been 3.90 per cent over the last one-year. Funds like Can Equity Tax
Saver and Prudential ICICI Tax Plan have delivered negative returns of 21.89 per cent
and 8.64 per cent, respectively, against the Sensex return of 18.74 per cent during the
same period. While none has managed to beat the benchmark Sensex, six funds have
managed double-digit returns with Fidelity Tax Advantage delivering highest return of
The 10 SP Ulip plans in operation for the last year have given average returns of 12.2
per cent. While none of them have given a negative return, individual returns are
between 6.55 per cent and 15.01 per cent. Over five years, the benchmark Sensex has
given returns of 32.01 per cent and out of 17 ELSS funds in existence since five years,
only four have underperformed the Sensex. The SBI Magnum Tax Gain Scheme 93
has delivered a compounded annualised return of 55.10 per cent. Meanwhile, ICICI
Prudentials Life Link, a SP Ulip, an early entrant, has just managed to beat the
benchmark by delivering compounded annualised return of 32.92 per cent over the
The decision. Given the cost structures and the return rates over the last few years,
ELSS emerges as the better option if you are looking purely at saving taxes through
investment. (In fact, if you need insurance you can buy a pure term life cover, which is
Costs in the MF industry are standardised, but not in insurance. So, for SP Ulips, there
are more charges and different companies factor them in differently. So it is tougher to
compare the nature of their impact on the investible part of your premium. Eventually,
based on factors like risk-adjusted returns. (See: Best Funds 2007, 30 April).
An SP Ulip may make sense in the longer term, as the costs are front-loaded. It may
make sense for larger amounts, too, since there would be no entry costs in most cases.
But purely to save taxes, that, by implication, limits investments to Rs 1 lakh, ELSS
will be the way to go till SP Ulips standardise and reduce their costs.
The contents of this Value Research Fund Card (the "Fund Card") published by Value
Research India Private Limited are not intended to serve as professional advice or
whatsoever for any investment decisions made or taken by the readers of this Fund
Card based on its contents thereof. You are strongly advised to verify the contents
before taking any investment or other decision based on the contents of this Fund
Card. The Fund Card is meant for general reading purposes only and is not meant to
serve as a professional guide for investors. The readers of this Fund Card should
exercise due caution and/or seek independent professional advice before entering into
entering into any financial obligation based on any information, statement or opinion
The Fund Card contains information, statements, opinions, statistics and materials that
have been obtained from sources believed to be reliable and the publishers of the Fund
Card have made best efforts to avoid any errors and omissions, however the publishers
of this Fund Card make no guarantees and warranties whatso-ever, express or implied,
contained and/or expressed in this Fund Card or of the results obtained, direct or
materials. The publishers of this Fund Card do not certify and/or endorse any opinions
contained, provided, published or expressed in this Fund Card. All disputes shall be
SINCE their launch, Unit Linked Insurance Plans (ULIP) have been a complete
rage; but that's not the case now. This year, thanks to the slowdown, insurers
Unlike non-guaranteed ULIPs, these newly launched plans shield you from the
He explains that these plans are like investing in fixed income products that
Subscription phase: During this phase, the plan is open for a limited time only.
For instance, SBIs Smart ULIP is open for a period of one year.
Premium paying phase: In this phase, you pay premium only for a fixed term,
which is 3 years. However, SBIs Smart ULIP allows you to choose the
NAV build-up phase: During this phase, the reset dates, set by the companies
month on the reset date decided by them whereas SBI has two reset dates
Accumulation phase: The remaining policy term i.e. the tenure left after all the
Whats unique about guaranteed ULIPs is that they offer the highest Net Asset
Benefits:
The is highest recorded NAV is the higest NAV among all reset dates.
Death benefits: In case of your untimely death, either fund value or sum
paying term plans, the charges on the former are on the higher side. The table
below explains this. It shows the net amount invested at the end of three years
after deducting the policy allocation charges. The sum assured for the plan is
Charges(%)
SBI Life Birla Sunlife Tata AIG Life
Note: The calculation for Tata AIG has been done taking into account the
charges for 1st year only because InvestAssure Plus is a single premium
product. However, for information purpose, Invest Assure Apex shows figures
These plans don't have a switching option. They also have only one choice of
fund that invests in a mix of debt and equity. An investor is at the mercy of the
fund manager because on one hand, his money is locked in while on the other,
Conclusion:
Harsh Roonga, CEO, Apnapaisa.com says, "If you want to invest in safe
avenues there are better options like public provident fund, bank deposits; why
term investment plan which promises good returns in the long term.
Yes, the plan which we are recommending is a ULIP, but this one comes with
fantastic opportunity to really make your money work as hard as you do.
- You make a regular investment of Rs. 1 Lakh for 3 years. Thats the
investment avenues.
- Now, it gets interesting hereThe Fund records its NAV for every month
- On Maturity the Fund pays you the units at the highest NAV recorded in
the 88 months.
- On the other hand, The complete money you have invested is guaranteed
The NAV recorded on reset dates in the 88 months moves from Rs. 8 in the
32nd month to 25 in the 65th month and goes down to Rs. 9 in the 88 month.
Now, as per the plan the investor will get the money at an NAV of Rs. 22.
Say the NAV remains lower than 10 the entire 88 months [which is a distant
possibility] , then Suresh will be paid complete Rs. 3 Lakhs as the guaranteed
maturity value.
chip companies while using debt instruments and derivatives to lock-in capital
appreciations. The use of derivatives will be for hedging purposes only and as
approved by IRDA.
magine two funds that grow at the same rate, 15 per cent a year, for 20 years, but have
different costs: 2 per cent and 2.5 per cent a year. This difference in costs of half a
percentage point (50 basis points) might look insignificant, but has a huge impact: a
loss of Rs 6.11 lakh in the costlier fund if Rs 1 lakh is invested every year in both the
funds for 20 years. Costs are very important, specially in financial products, where
they are invisibly bundled into the product. Costs are also important in the case of
financial products like unit-linked insurance plans (Ulip) that are long term in nature
where they can make one plan great and another average.
Ulips are structured in such a way that the impact of costs is more in the initial years
of the policy. This is why an exit from the policy in the initial years will end up as a
loss for the investor in most cases. A Ulip should be run for at least 10 years with
Our annual mutual fund ranking devotes much less time to costs than the ranking of
Ulips. The reason for this is that costs are fewer and standardised in mutual funds,
making comparisons very easy. Ulips, on the other hand, are plagued by multiplicity of
costs and vague regulations on cost limits. We believe it is more a fault of the
regulator, Insurance Regulatory and Development Authority (Irda), than the industry.
Ticking off the costs in Ulips, our count went all the way up to four cost heads. A look
at what these costs are and what their impact on your returns will be.
TYPE I ULIPS
TYPE II ULIPS
its deduction is invested in units of the funds chosen. The insurer uses this to meet
most of its expenses. In some Ulips, it is as high as 60 per cent, in others it is nil. A
common misconception is that this charge is a crucial indicator of the overall costing
Mortality Charges
This is the actual cost of the life coverage opted for and is deducted from the fund value
on a monthly basis. It depends on a number of factors, including the age of the buyer,
the state of his health and the amount of coverage sought. The basis of this charge
depends on the type of Ulip. In Type I Ulips, this charge is initially deducted from the
entire sum assured. It is later charged on the sum-at-risk, that is, the difference between
the sum assured and the fund value. As a result, mortality expenses fluctuate as the fund
value changes. In Type II Ulips, the mortality charge is levied on the sum assured
investments of the funds. It is the most important charge in Ulips, as gradual rise in
fund value over the years keeps on making the impact larger.
This is deducted from the fund value every month. It can be a fixed amount throughout
The surrender and fund-switching charges are incidental and may not be levied in
certain circumstances.
Not only do costs vary with products, but also change in one product with the age and
health of the investor, the tenure and sum assured chosen and the features and riders of
the policy. We assumed the sum assured, the buyers age and sex and the term of the
most popular Ulips to create a common ground for a comparison of costs (see How We
Did It on page 32). We found that the internal rate of return (IRR) is the best parameter
for the total impact of costs for the policyholder, as it is the return left over after all the
costs have taken their bites. The regulator mandates assumed rates of return of 6 and
10 per cent on the premium invested for all the projections, known as benefit
illustrations, that agents share with prospective investors. An example will bring out
the impact of costs. Assume that you invest Rs 1 lakh a year in a Ulip for 15 years. At
an annual rate of return of 10 per cent, you get back Rs 26.88 lakh after 15 years. With
zero costs, you would have got back Rs 34.95 lakh. That means costs ate up Rs 8.07
lakh.
We took the IRR, the real return, on annual assumed rates of return of 6 and 10 per
cent, from all life insurers in the fray. The greater the gap between the IRR and the
assumed rate of return, the higher the costs of the policy. It is impossible to cover each
plan in a ranking like this, but do take away this tool. Ask your insurance company for
the IRR of the policy you already have or are planning to buy. Financial products are
sunildhawan@outlookindia.com
HOW WE DID IT
The 2008 edition of the Outlook Money Ulip (unit-linked insurance plan) Ranking had 18 life insurers as
contenders. The parameters used were cost and return. This section deals with cost. We chose to
compare cost through the Internal Rate of Return (IRR), which is derived by deducting the costs from
The track record of new players like AEGON Religare Life, IDBI Fortis Life and DLF Pramerica Life is
not long enough for judging performance, but they were considered for the ranking on the basis of
cost. We took into account at least one plan per life insurer. Only generic Ulips, and not children, whole
life or pension plans, which cater to specific needs, were ranked. Single premium Ulips and plans that
have an in-built waiver of premium feature were not considered. The idea was to prevent the wrinkles
associated with a comparison of products of different types. Of course, our ranking of child policies that
accompanies the annual Kids Special issue will continuethe next one will happen in early 2009.
The cost structure of Ulips varies according to the age of the buyer, tenure, sum assured and fund
options chosen. We compared the figures for a 35-year-old male, a term of 15 years, annual premium
of Rs 50,000 and sum assured of Rs 5 lakh. We assumed investment of 100 per cent of the premium
in the all-equity fund of the insurer. Using this profile, we collected benefit illustrations (or year-on-year
return projections and costs) of each Ulip of every insurer. Plans in which all the assumptions chosen
were not possible were removed. The exclusions included Birla Sun Life Insurances Platinum Plus
(minimum annual premium: Rs 1 lakh), Bajaj Allianzs Family Assure (maximum annual premium: Rs
15,000), Avivas LifeBond 5, LICs Profit Plus (maximum premium paying term for both: five years),
Birla Sun Life Insurances Gold-Plus II (maximum term: eight years) and ING Vysyas Platinum Life
(maximum term: 10 years). In Outlook Moneys opinion, insurance is a long-term product and needs a
The next step was to separate Type I and Type II plans. The fray had 32 Type I Ulips (these provide
the higher of sum assured and fund value to nominee if policyholder dies during the term) and 10
Type II Ulips (these give both the sum assured and the fund value to the nominee on death). Care
was taken to measure and rank the Ulips on equal ground without much variation in the underlying
factors. We considered the fund value at the end of the 15th year to arrive at the IRR for 10 per cent
and 6 per cent growth rates. The maximum sum assured is proportional to the term in some plans. In
a few of these cases, a term of 15 years did not allow the sum assured figure of Rs 5 lakh that we
had chosen for comparisons. For such plans, we kept the term as 20 years and took into
The IRR was used as a parameter because life insurance products are not standardised and, hence,
not easily comparable. We considered the fund corpus after taking into account all the charges,
including those for premium allocation, policy administration, fund management and mortality. The
study factored in the mortality charges for the illustrations that had excluded them. The difference
between the 6 and 10 per cent mark and the respective IRR shows the chunk lost to costs. This gap
will be the smallest for the most cost-effective plan, yielding the highest IRRs.
At a time when investors are no longer willing to risk their money to the uncanny ways of the
market, as in the case of unit-linked insurance plans, insurers have reverted to selling
Sales of unit-linked plans have declined sharply in the current financial year. Hence,
almost all the schemes launched by insurers in the last few months were guaranteed
plans only.
In vogue
Guaranteed return plans have worked wonders for life insurers. Take for example the
Life Insurance Corporation of India. The public sector insurer launched Jeevan Aastha,
a single premium plan with guaranteed additions, early this year. During the limited
offer period of 45 days till January 21, the scheme mopped up more than Rs 10,000
crore in premium.
The success of Jeevan Aastha prompted the LIC to launch another close-ended
The LIC, whose market share had been steadily eroding and was around 50 per cent in
November last year, expects to increase its share to 60 per cent after the launch of the
Insurance, ICICI Prudential Life Insurance and a few others had also launched similar
plans offering guaranteed returns last year to attract investors looking for secured
investments.
Recently, Bajaj Allianz Life Insurance and Tata-AIG Life Insurance Company have
come out with their guaranteed plans Bajaj Allianz Century Plus II and
The concept of guaranteed returns was in vogue before the life insurance sector was
After private players took the centrestage with their unit-linked plans, they came out
with capital protection (return of premium) guarantees. Almost every private player
However, Birla Sun Life changed the form of guarantee in Ulips with the launch of
Platinum Plus in June last year. The scheme promises a guaranteed unit price on
maturity. This guaranteed unit price or unit NAV (net asset value) will be the highest
NAV recorded on 88 reset dates (the 15th day of each calendar month till June 2015).
Now, Tata AIG Life Insurance has launched a unit-linked plan similar to Birla Sun
Lifes Platinum Plus. In the case of Tata AIGs InvestAssure Apex plan, there will be
Guaranteed plans may be the flavour of the season, but are these really good for you or
Guarantees come with a cost, said Sunil Kakkar, chief financial officer of Max New
York Life Insurance Company. A policy buyer should clearly understand what the
guarantee actually means to him because most of these guaranteed amounts are
payable only on maturity of the policy. A policyholder should also understand the costs
Life insurance is a long-term investment and over a period of 15-20 years equity-
linked investments are self-guaranteed in the sense that the volatility in equity prices is
Most of these guaranteed return policies have a maximum tenure of 10 years. This
means if you buy a guaranteed plan now for investment purposes and not for
insurance, youll have to buy another policy after 10 years at a much higher premium.
For example, a 20-year-old person has to pay an annual premium of Rs 14,738 for a
Rs 5-lakh basic endowment policy for 30 years. But the annual premium is Rs 23,978
Premium prick
The premium rate of a guaranteed return plan is also higher than a non-guaranteed
plan.
Take for example LICs Jeevan Varsha. A 30-year-old person will have to pay an
annual premium of Rs 78,497 for a sum assured of Rs 5 lakh for 12 years under this
plan. But the premium is only Rs 37,850 under the companys non-guaranteed money
Similarly, the minimum premium for Tata AIG Lifes InvestAssure Apex plan is Rs
90,000, while the minimum premium is only Rs 12,000 for its InvestAssure Care plan
Apart from high premium rates, other policy related charges for fund management,
policy administration and surrender are also higher for guaranteed plans. For example,
investment units, in Tata AIGs InvestAssure Apex plan is Rs 93.75 on the first Rs
For Tata AIG's InvestAssure Insta plan, the policy administration charges are Rs 75 on
the first Rs 1,000 sum assured and Rs 3.25 every Rs 1,000 sum assured thereafter. The
fund management charges are also higher in InvestAssure Apex than in InvestAssure
Insta.
In Birla Sun Lifes Platinum Plus plan, the minimum annual premium is Rs 1,00,000,
while it is just Rs 50,000 in its Gold Plus II plan. Policy administration charges are
also much higher in Platinum Plus plan than Gold Plus II plan.
The word guarantee may sound great, but it comes at a cost. As a policy buyer, you
must understand and compare well what is the guarantee you are getting and at what
cost. Moreover, these guaranteed return plans mostly invest in debt instruments. Given
a 10-year investment horizon, you should determine whether you want to lock in your
funds in debt instruments or equities that have historically given much higher return in
. Since their launch, Unit Linked Insurance Plans (ULIP) have been a complete rage;
but that's not the case now. This year, thanks to the slowdown, insurers are seeing
So to maintain the spark in ULIPs, insurance companies are trying to entice buyers by
Unlike non-guaranteed ULIPs, these newly launched plans shield you from the
He explains that these plans are like investing in fixed income products that offer
secured returns.
Subscription phase: During this phase, the plan is open for a limited time only. For
Premium paying phase: In this phase, you pay premium only for a fixed term, which is
3 years. However, SBIs Smart ULIP allows you to choose the premium paying term
for 3 or 5 years.
NAV build-up phase: During this phase, the reset dates, set by the companies are
exercised. Reset dates are pre-decided dates fixed by insurance companies to record
NAVs. Birla Sun Life and Tata AIG record NAV once a month on the reset date
decided by them whereas SBI has two reset dates every month to record NAV.
Whats unique about guaranteed ULIPs is that they offer the highest Net Asset Value
Benefits:
The is highest recorded NAV is the higest NAV among all reset dates.
Death benefits: In case of your untimely death, either fund value or sum assured will
When you compare guaranteed ULIPs to single premium or limited premium paying
term plans, the charges on the former are on the higher side. The table below explains
this. It shows the net amount invested at the end of three years after deducting the
policy allocation charges. The sum assured for the plan is assumed to be Rs 5 lakh and
premium Rs 1 lakh
Charges(%)
Birla Tata AIG
SBI Life
Sunlife Life
Insurance
Insurance Insurance
Smart Platinum InvestAssure
Policy year
ULIP Plus II Apex
Policy term
10 years 10 years 10 years
of the plan
Year 1 15 10 9.5
Year 2 5 4 4
Year 3 5 4 4
Net
investment
Rs Rs
at the end Rs 88,060
272,800 265,800
of
3 years
Gold Plus InvestAssure
Policy year SBI Elite
II Plus
Policy term
10 years 8 years 15-30 years
of the plan
Year 1 10 8 9.5
Year 2 7 4
Year 3 7 4
Net
investment
Rs Rs
at the end Rs 96,750
275,400 276,306
of
3 years
Note: The calculation for Tata AIG has been done taking into account the charges for
1st year only because InvestAssure Plus is a single premium product. However, for
information purpose, Invest Assure Apex shows figures for 2nd and 3rd years also.
These plans don't have a switching option. They also have only one choice of fund that
invests in a mix of debt and equity. An investor is at the mercy of the fund manager
because on one hand, his money is locked in while on the other, he has not flexibility
to switch.
Conclusion:
Harsh Roonga, CEO, Apnapaisa.com says, "If you want to invest in safe avenues there
are better options like public provident fund, bank deposits; why pay a charge for it."
And anyway, he adds,"Its always better to keep your insurance and investment needs
separate."
Multilevel Marketing
The Concept
Chapter-3
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and secondary data. Primary data
is defined as data that is collected from original sources for a specific purpose.
Secondary data is data collected from indirect sources. (Source: Research
Methodology, By C. R. Kothari)
PRIMARY SOURCES
These include the survey or questionnaire method, telephonic interview as well as the
personal interview methods of data collection.
SECONDARY SOURCES
These include books, the internet, company brochures, product brochures, the
company website, competitors websites etc, newspaper articles etc.
SAMPLING
Sampling refers to the method of selecting a sample from a given universe with a view
to draw conclusions about that universe. A sample is a representative of the universe
selected for study.
SAMPLE SIZE
The sample size for the survey conducted was 270 respondents. This sample size was
taken on 95% confidence level and 6 significant levels. Data universe for this sample
is 10,00,000 which is approx population of kotar excluding people below age of 18
years.
SAMPLING TECHNIQUE
PLAN OF ANALYSIS
Tables were used for the analysis of the collected data. The data is also neatly
presented with the help of statistical tools such as graphs and pie charts. Percentages
and averages have also been used to represent data clearly and effectively.
STUDY AREA
ANALYSIS
AND
INTERPRETATION
PLATINUM PLUS FUND - 1
Portfolio as on 30th September 2009 About the Fund
Objective: optimi the participation in an manag wel
SECURITIES HOLDING To
diversified ze
equity activelyof fundamentally strong
portfolio ed l
blue
chip companies while using debt instruments &
derivatives to lock-in capital appreciations
GOVERNMENT SECURITIES 0.60%
Strategy:: The strategy of the fund is to have an optimum
mix of equities &
10.45% GOI 2018 0.60% fixed income instruments, with up to 100% exposure in
both equities & fixed
income assets & up to 40% in Money Market
NATIONAL BANK FOR
ORPORATE EBTAGRI. & RURAL 0.90
5.56%
DEV 2018 HOUSING BANK 2018
NATIONAL %
0.82% G-Secs MMI
8.65% NTPC LTD. 2019 0.60% 4.36%
NCD
5.56%
0.63% NATIONAL BANK FOR AGRI. & RURAL DEV 2019
0.57%
10.85% POWER FINANCE CORPORATION LTD 2018 0.28%
10.85% RURAL ELECTRIFICATION CORP LTD 2018 0.23%
Equities
89.49%
EQUITY
BHARAT HEAVY ELECTRICALS LTD. 89.49%
5.09%
INFOSYS TECHNOLOGIES 4.65 Rating Profile
LTD.
LARSEN & TOUBRO LTD. %
4.53%
BHARTI AIRTEL 4.38
LTD.
HOUSING DEVELOPMENT FINANCE COR LTD % P1+ / A1+
Sovergin 10%
4.27% ITC LTD 9%
3.94% HDFC BANK LTD.
3.67% STATE BANK OF INDIA
3.60% OTHER EQUITY
MMI 4.36%
AAA
81%
Sectoral Allocation
BANKING 18.16%
TELECO 7.72%
M
6.99%
FMCG
6.28%
IT
5.58%
FINANCIAL SERVICES
4.52%
POWER
4.19%
PHARMA
3.60%
Maturity Profile AUTO
2.20%
METAL
1.75%
59.61% CEMENT
40.39% 1.66%
DIVERSIFIE
D 1.66%
CONSTRUCTIO 1.50%
N
Less than 2 years 7years & above
PLATINUM PLUS FUND - 2
Portfolio as on 30th September 2009 About the Fund
ObjectiveTo optimize the participation in an actively
SECURITIES HOLDING managed well
diversified equity portfolio of fundamentally strong blue
GOVERNMENT SECURITIES 0.00% chip companies while using debt instruments & derivatives
to lock-in capital appreciations:
CORPORATE DEBT 3.24% fixed income instruments, with up to 100% exposure in
Strategy: The&strategy
both equities fixed of the fund is to have an optimum
NATIONAL HOUSING BANK 1.20 mix of equities &
2019 %
EQUITY 90.11%
42.51%
P1+ / A1+
10%
MMI 6.64%
AAA
84%
Sectoral Allocation
BANKING 18.45%
TELECO
7.76%
M
7.54%
IT
6.34%
FMCG
5.36%
FINANCIAL SERVICES
4.65%
POWER
Maturity Profile 4.46%
METAL
75.21%
4.28%
PHARMA
3.95%
AUTO
24.79%
1.73%
CEMENT
1.64%
REAL
Less than 2 years 7years & above ESTATE
INFERENCES
AND
CONLUSION
CONCLUSION
After completion of research, we conclude that: -
Segmentation of target market is best way to work in.
Womens are proving better advisor.
Cut throat competition as new insurance companies are also opening branch.
Private insurance sector making their place in insurance sector.
Advisor should be approach according to need.
In short can be said that Advisor have to do more for their good future as it is on
a good position as private insurance is concerned. According to survey there are
various player in market ( Kota ) and really it is difficult to survive on the basis
of brand name for different products.
So there is not much awareness in Kota city about BSLI as it started working
from August 2011. What we think Birla Sun Life Insurance just need
promotional activities.
During our promotional activities when we found that Birla Sun Life Insurance
could capture big market in Kota. They would be on one . One position in Kota
because the benefits and flexibility which Birla Sun life providing is not
provide by any other insurance company in Kota. ICICI prudential is the only
private player, which is there in competition with TATA-AIG. As ICICI
prudential launch first so it capture the market very soon , And LIC is
concerned they have advantage of public mentality a very safe investment
At last we want to state that Birla Sun Life Insurance need promotional actives
and the benefits should be given to the customers. Customer satisfaction should
be first preference.
.
OPPORTUNITY:
People have started turning towards private insurance sector as they know
that security and growth of money is better then another insurance company.
Market is fully to capture because the branch has set up in near years , so
there be chances to grow.
THREATS:
As LIC has strong market position so it is little bit difficult to capture the
market.
Customer is still find risky to place its money in private insurance sector.
SUGGESTION
Advisor should be given more training time to time to have better
knowledge for change in market.
Mass insurance policy should be launched
Untapped areas should be cover.
There are more than 75 crores population in villages. This represents a vast
potential.
Advisor should be supervise regularly so that their work can be improved
and made effective and efficient.
The advisor should be keeping in constant touch with his policy holder to
become aware of the change in his situation including marriage. Death of
relatives. Releases of mortgages.
Any one of them may necessitation some changes like title to policy moneys
or more insurance. The contact conveys a message that agent and company
cares for the policy holder and the family mouth publicity it increase
acceptability.
Private insurance companies should highlight that they are managed
privately but completely governed by IRDA.
To capture major chunk of business they need to open more branches in sub
urban so that they can fulfill all need of customers.
Aware should be created among the masses through advertising.
Annexure 1 : The Malhotra committee customer Service
Report & IRA BILL
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI
Governor R.N. Malhotra, was formed to evaluate the India insurance
industry and recommend its future direction in 1994, the committee
submitted the report and gave the following recommendations: -
Structure
Government stake in the insurance companies to be brought down to
50%.
Government should take over the holdings of GIC and its subsidiaries
so that these subsidiaries can act its independent corporations.
All the insurance companies should be given greater freedom to
operate.
Competition: -
Private companies with a minimum paid up capital of Rs. 1bn should
be allowed to enter the industry.
No company should deal in both life and general insurance through a
single entity.
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
Post Life insurance should be allowed to operate in the rural market.
Only one state- level insurance company should be allowed to operate
in each state.
Regulatory Body :-
The insurance Act should be changed.
An insurance regulation body should be set up.
Controller of insurance (currently a part of the Finance Ministry)
should be made independent.
Investment: -
Customer Service: -
www.birlasunlife.com
www.amfi.com
www.financialplanning.com
www.financialexpress.com
www.valueresearchonline.com
www.mutualfundindia.com
www.goole.com
Age.. Contact no
Address.............................
Qualification.
(a) yes ( )
(b) no ( )
(a) yes ( )
(b) no ( )
(a) private ( )
(b) goverment ( )
(a) yes ( )
(b) no ( )
(a) yes ( )
(b) no ( )
Q6. if you not tried BSLI then why?
(d) other ( )
(a) LIC ( )
(b) ICICI ( )
(c) BSLI ( )
(a) service ( )
(b) product ( )
(c) advertisement ( )
(d) schemes ( )
(a) occasionally ( )
(b) anytime ( )
(c) quarterly ( )
(a) self ( )
(b) others ( )
Thank you