birla sun life siddanna m balapgol

Birla Sun Life Insurance

PROJECT REPORT ON

STUDY OF PRODUCT PORTFOLIO

OF

SUBMITTED BY:

A report submitted in partial fulfillment of BBA programme at

2


ACKNOWLEDGEMENT

We would like to express our sincere gratitude and thanks to Mr.

Rajesh Rao, Agency Manager, Birla sun life insurance ltd,

Jaipur for giving us the guidance. We owe everything we have

gained from the project in terms of knowledge and experience to

them, as without their timely support and encouragement the

project would not have been as fruitful as it has been.

We also thank Mr. Ashwin saxena for his constant

encouragement and guidance at every stage of this project, acting

as my faculty guide. He has been kind enough to spare his

valuable time and share his corporate experiences, which helped

me to approach the project in the right way.

3


We are grateful also to the entire staff of Birla sun life insurance

ltd who helped us to collect the relevant data and get the real gist

of current scenario.

We would also like to extend sincere thanks to few people who

were not part of our project but without their help things would

not have been as easy as they were.

THANK YOU ALL

Bhanwar lal kumawat (BBA 3ndYear)

4


Parishkar college of Global Excellence.

CONTENTS

1. Introduction to insurance 5

2. Fundamental principles of insurance 6-8

3. Reasons for taking a life insurance policy 9-10

4. Vision, Mission, Values 11

5. Company Profile 12-16

6. Sales Procedure 17-19

5


7. Company’s Products 19-34 7.1 Flexi Plans 7.2Classic Life Premier 7.3 Gold plus II Plan 7.4 Supreme Life Plan 7.5 Platinum plus Plan

9. Funds by BSLI 34-39

11. Conclusion 40

12. Recommendation 41

13. Bibliography 41

14. Annexure 42-44

“Insurance, in law and economics, is a form of risk

management primarily used to hedge against the risk of a

contingent loss. Insurance is defined as the equitable

transfer of the risk of a loss, from one entity to another, in

exchange for a premium. An insurer is a company selling

the insurance. The insurance rate is a factor used to

6

http://en.wikipedia.org/wiki/Risk

http://en.wikipedia.org/wiki/Hedge_(finance)

http://en.wikipedia.org/wiki/Risk_management


http://en.wikipedia.org/wiki/Economics

http://en.wikipedia.org/wiki/Law


determine the amount, called the premium, to be charged

for a certain amount of insurance coverage. Risk

management, the practice of appraising and controlling

risk, has evolved as a discrete field of study and practice.”

The evolution of human beings from the primordial ‘wild’

stage to the ‘cave dwelling’ stage is nothing but their saga

of search for security. Their quest for security is eternal.

Life insurance is a device invented by them to seek security

against the most important hazards against which they

found themselves quite helpless. It will not be an

exaggeration to say that progress of civilization is due to

human beings’ unending pursuit for security.

Life insurance in its modern form is a western concept.

Although it started taking shape since last 300 years, it

came to India with the arrival of the Europeans .the first life

insurance company was established in India in 1818 as

oriental life insurance company mainly by Europeans to

provide for widows of Europeans. The companies that

followed mainly catered to Europeans and charge extra

premium on Indians lives. The first Indian company,

insuring Indian lives at standard rates, was Bombay mutual

life insurance company, which was formed in 1870.this was

the year also when the first Insurance Act was passed by

the British parliament. The years subsequent to the

Swedishi Movement saw the emerging of several insurance

companies.

The end of the year 1955, there were 245 insurance

companies and provident societies out of which 16 were

non-Indian companies. These companies were nationalized

7




in 1956 and brought under one umbrella – the life insurance

corporation of India, which enjoyed monopoly of life

insurance business, till almost up to the end of year

2000.By enacting the IRDA Act 2000,the government of

India effectively ended LIC’s monopoly and opened the

doors for private insurance companies

FUNDAMENTAL PRINCIPLES OF INSURANCE

Some useful terms in Insurance:

A) INDEMNITY

A contract of insurance contained in a fire, marine,

burglary or any other policy excepting life assurance and

personal accident and sickness insurance) is a contract of

indemnity. This means that the insured, in case of loss

against which the policy has been issued, shall be paid the

actual amount of loss not exceeding the amount of the

policy, i.e. he shall be fully indemnified. The object of

every contract of insurance is to place the insured in the

same financial position, as nearly as possible, after the loss,

as if his loss had not taken place at all. It would be against

public policy to allow an insured to make a profit out of his

loss or damage.

B) UTMOST GOOD FAITH

Since insurance shifts risk from one party to another, it is

essential that there must be utmost good faith and mutual

confidence between the insured and the insurer. In a

8


contract of insurance the insured knows more about the

subject matter of the contract than the insurer.

Consequently, he is duty bound to disclose accurately all

material facts and nothing should be withheld or concealed.

Any fact is material, which goes to the root of the contract

of insurance and has a bearing on the risk involved. It is

only when the insurer knows the whole truth that he is in a

position to judge

(a) Whether he should accept the risk and

(b) What premium he should charge.

If that were so, the insured might be tempted to bring about

the event insured against in order to get money.

C) Insurable Interest - A contract of insurance affected

without insurable interest is void. It means that the insured

must have an actual pecuniary interest and not a mere

anxiety or sentimental interest in the subject matter of the

insurance. The insured must be so situated with regard to

the thing insured that he would have benefit by its existence

and loss from its destruction. The owner of a ship run a risk

of losing his ship, the charterer of the ship runs a risk of

losing his freight and the owner of the cargo incurs the risk

of losing his goods and profit. So, all these persons have

something at stake and all of them have insurable interest.

It is the existence of insurable interest in a contract of

9


insurance, which distinguishes it from a mere watering

agreement.

D) Causa Proxima - The rule of causa proxima means that

the cause of the loss must be proximate or immediate and

not remote. If the proximate cause of the loss is a peril

insured against, the insured can recover. When a loss has

been brought about by two or

more causes, the question arises as to which is the causa

proxima, although the result could not have happened

without the remote cause. But if the loss is brought about

by any cause attributable to the misconduct of the insured,

the insurer is not liable.

E) Risk - In a contract of insurance the insurer undertakes

to protect the insured from a specified loss and the insurer

receive a premium for running the risk of such loss. Thus,

risk must attach to a policy.

F) Mitigation of Loss - In the event of some mishap to the

insured property, the insured must take all necessary steps

to mitigate or minimize the loss, just as any prudent person

would do in those circumstances. If he does not do so, the

insurer can avoid the payment of loss attributable to his

negligence. But it must be remembered that though the

insured is bound to do his best for his insurer, he is, not

bound to do so at the risk of his life.

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G) Subrogation - The doctrine of subrogation is a

corollary to the principle of indemnity and applies only to

fire and marine insurance. According to it, when an insured

has received full indemnity in respect of his loss, all rights

and remedies which he has against

Third person will pass on to the insurer and will be

exercised for his benefit until he (the insurer) recoups the

amount he has paid under the policy. It must be clarified

here that the

Insurer’s right of subrogation arises only when he has paid

for the loss for which he is liable under the policy and this

right extends only to the rights and remedies available to

the insured in respect of the thing to which the contract of

insurance relates.

H) Contribution - Where there are two or more insurance

on one risk, the principle of contribution comes into play.

The aim of contribution is to distribute the actual amount of

loss among the different insurers who are liable for the

same risk under different policies in respect of the same

subject matter. Any one insurer may pay to the insured the

full amount of the loss covered by the policy and then

become entitled to contribution from his co-insurers in

proportion to the amount which each has undertaken to pay

in case of loss of the same subject-matter.

In other words, the right of contribution arises when

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1) There are different policies, which relate to the same

subject matter

2) The policies cover the same peril which caused the

loss, and

3) All the policies are in force at the time of the loss,

and

4) One of the insurers has paid to the insured more than

his share of the loss.

Life Insurance Policy is a form of security for the person

who insures his life and his family. Life insurance policies

have helped trade and other economic activities to flourish

in a great manner. It has generated lots of job opportunities.

It is looked upon as a lucrative career option. Life

insurance companies have also entered the international

business scenario.

The following reasons substantiate why a life

insurance policy should be taken :

A) Early Deaths

The mortality rate is experiencing a declining trend in

many parts of the world. However it is also important to

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http://www.thriftyscot.com/life-insurance/


note that the age at which People die is also ever

decreasing. Some reasons for this include unhealthy living

style, stress, pollution, and some natural calamities. This

necessitates people to make adequate measures to yield

income for their family and dependents. This could be a

serious concern if the insured happens to be the sole

breadwinner. Some individuals see this as an option to plan

their retirement.

B) Advancements in Health Care

The mortality rate has declined rapidly even though the fact

remains that the number of people who die at an early age

is on the increase. This is mainly due to the advancement in

healthcare and the awareness on medical facilities. This

results in an increased spending at an old age. This

increased spending is also due to increase in the costs of

living apart from paying expensive medical bills. Unless

they invest in Life insurance or other forms of insurance

like health insurance it becomes next only too impossible to

meet the financial demands especially during the old days.

C) Increase in the Cost of Living and Spending

Power

The purchasing power of the consumers and the standard of

living has experienced a steep rise over the years. The

13


increase in National Income and gross domestic product are

Partly responsible for this. Individuals incur many

unexpected expenses due to the growing needs. Insurance

comes in handy to meet such an unexpected expense. It

also

Makes sure that an individual is able to meticulously plan

his finances.

Insurance option is more or less an interest free loan. An

individual can cancel his insurance policy and obtain a

huge amount if it is imperative in meeting an urgent

expenses and he does not have alternative sources for

finance. Life insurance companies therefore do the needful

to consumers.

D) Tax Concessions

Income tax concessions are available to individuals and

corporate houses that adopt insurance policies. Many have

been making investments in Insurance with the sole aim of

enjoying tax benefits. This naturally increases spending

power. Since the investments increases the economic

activities in the country automatically increases.

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VISION

To be a world class provider of financial security to individuals and corporates and to be amongst

the top three private sectors life insurance companies in India.

MISSION

To be the first preference of our customers by providing innovative, need based life insurance

and retirement solutions to individuals as well as corporates. These solutions will be made available

by well-trained professionals through a multi channel distribution network and

Superior technology.

Our endeavor will be to provide constant value addition to customers throughout their

relationship with us, within the regulatory framework.

We will provide career development opportunities to our employees and

The highest possible returns to our shareholders.

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VALUES

Integrity: Honesty in every action.

Commitment: Deliver on the promise

Passion: Energized action Seamlessness: Boundary less in

letter & spirit Speed: One step ahead always

COMPANY PROFILE

Birla Sun Life – A Coming Together Of Values

Birla Sun Life is a joint venture between The Aditya

Birla Group, one of the largest business house in India and

Sun Life Financial Inc., a leading International Financial

Services Organization. The local knowledge of the Aditya

Birla Group combined with the expertise of Sun Life

Financial Inc. offers a formidable protection for our future.

16


The Aditya Birla Group is led by its chairman- Mr. Kumar

Manglam Birla. The Group has over 88000 employees

across all its units worldwide. Some of the key

organizations with the group are Hindalco, Grasim, Aditya

Birla Nuvo, etc.

The group is India's leading business house with a number

of key organizations. These are as follows:

1. Grasim

2. UltraTech Cement Ltd

3. Hindalco

4. Indian Aluminium Company Ltd

5. Aditya Birla Nuvo

6. Idea Cellular Ltd.

7. Birla Sun Life Insurance Co.Ltd

8. Birla Sun Life Asset Mgmt. Co.Ltd

9. Birla Sun Life Distribution Co. Ltd

10. PSI Data Systems

11. Indo Gulf Fertilizers Ltd.

12. Birla Global Finance Ltd

Sun Life Financial Inc. and its partners today have

operations in key markets worldwide, including Canada,

the United States, the United Kingdom, Hong Kong, the

Philippines, Japan, Indonesia, India, China and Bermuda.

Sun Life Financial Inc. is a leading player in the life

insurance market in Canada.

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Share Holding Pattern:

In Birla-Sun Life, the two companies are having

shareholding pattern as follows:

74 %--> Aditya Birla Group

26 %--> Sun Life Financial Inc.

The group has 3 businesses:

1. Mutual Funds

2. Wealth Management

3. Life Insurance

Birla Sun Life Insurance co ltd. is the Life-Insurance

arm of Birla-Sun Life

Birla Sun Life Insurance in its 7 successful years of

operations has contributed significantly to the growth and

development of life insurance industry in India. It

pioneered the launch of Unit Linked Life Insurance plans

amongst the private players in India. It was the first player

in the industry to sell its policies through the

Bancassurance route and through the Internet. It was the

first private sector player to introduce a Pure Term plan in

the Indian market. This was supported by sales practices,

which brought a degree of transparency that was entirely

new to the market. The process of getting sales illustrations

signed by customers, offering a free look period on all

policies, which are now industry standards were introduced

by BSLI. Being a customer centric company, BSLI has

covered more than a million lives since inception and its

18


customer base is spread across more than 1000 towns and

cities in India. All this has assisted the company

in cementing its place amongst the leaders in the industry in

terms of new business premium income. The company has

a capital base of more than Rs.672 crores.

Many ONEs with Birla Sun Life Insurance:

BSLI is a company that has a very unique contribution in

the history of Insurance sector. The company not only has

varying plans and funds, rather also is a pioneer in many

aspects. These pioneering features of BSLI are as follows:

1. Free Look Period: BSLI offers its policyholders

with a free look period of 15 days. Client gets

freedom to have an in-depth look over all the terms

and conditions regarding his/her life-insurance

policy. If he finds policy not worth opting for, he

can also return the policy, but at BSLI, co. people

ensures this not to happen.

2. Bancassurance: BSLI pioneered Bancassurance in

India. Bancassurance means to include Banks as

one of the distribution channels with the company.

BSLI is the first company, which realized that

banks, with their huge customer base and strong

customer loyalty, are a readymade platform to

acquire new business on a more cost effective and

sustainable basis.

19


3. Unit Linked Life Insurance Plans: BSLI was the

first in India to introduce Unit Linked Plans. A

ULIP is an auspicious coming together of security

from life

4. insurance and earnings from investment. Which

means, apart from securing the future they offer

efficient returns. These plans provide the customer

with a certain number of units, in the same way as a

mutual-fund holder gets units. ULIPs offer market-

linked returns to policyholders.

5. Sales Illustrations: BSLI is the first company to

introduce Sales Illustrations in the Insurance

Industry. Sales people of BSLI give demonstrations

of fund

6. Performance on two points of projections i.e. on 6%

and 10%. Now IRDA has also made it mandatory to

have sales illustrations.

BSLI’s has launched Century SIP, a unique systematic

investment plan offering an opportunity to create wealth

with as little as Rs 1000 per month plus a life insurance

cover of up to 100 times the monthly installment.

20


This plan comes along with free term insurance for an

individual up to 55 years of age.

The life insurance cover comes at no extra cost to the

investor. The cover is hassle free. The investor need not go

thru any medial test to avail of the life cover. All an

investor needs to do is enroll for CSIP & sign a

“Declaration of Good Health”. In case of unfortunate

demise of investor the insurance claim will be directly paid

to the nominee by the insurance company (Birla Sun Life

Insurance Company).

Announcing the launch of Century SIP, Anil Kumar, CEO,

and Birla Sun Life MF said,

“This offering touches all aspects of an investor’s financial

planning needs. We wish to encourage the investment habit

among investors by providing them life insurance cover.”

Insurance cover to the investor would continue even after

the SIP’s minimum maturity tenor of 3 years. Any

individual between 18 to 46 years of age may invest in this

plan. Investment in this plan may be made through

Electronic clearing system (ECS), direct debits or post

dated cheques.

7. Others: Some other ONEs with BSLI are:

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http://www.moneycontrol.com/india/news/mf-news/birla-sun-life-mf-launches-century-sip/17/50/342146




1st to issue daily NAVs of funds for better

transparency.

1st to have a distinct CRISIL benchmark.

1st to disclose portfolio on a monthly basis.

Policyholders can view their policy details

online; they can be accessed from BSLI

website using your unique password.

Out of every 100 claims intimated to BSLI

98.28 stands cleared.

Also the average Turn Around Time (TAT) :

(i) From the receipt of the last

requirement till dispatch of

cheque is 5 days and

(ii) From intimation of claim till its

decision & dispatch of cheque

is 36 days.

22


Sales Procedure of Insurance in BSLI:

BSLI ensures that its policyholders get the best out of the

policy offered to them by their Advisors. For this, BSLI

follows a set procedure of selling Insurance to the clients.

The sales procedure can be diagrammatically presented as

follows:

23


This procedure can be stepped down as follows:

1. Pitching the customer: The first and foremost thing is

that, client should be ready to purchase the Insurance plan.

Insurance is not a very preferable product yet in India. And,

thus, co. has to be very vigilant. Advisors, at BSLI,

maintain relationships and make the most of their

Goodwill. Insurance is a Relationship oriented business.

Keeping this in mind BSLI also initiated Bancassurance,

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SUSPECTING

PROSPECTING

APPOINTMENT

FIRST SALES CALL

FOLLOW UPS

SALES CLOSED

OFFICE WORK


where Banks’ image of being loyal to the customers, plays

a major role in pitching the customer to buy Insurance.

BSLI uses following routes for distributing their Product to

general public:

a. Direct Personal Contacts (through Advisors)

b. Bancassurance (through Banks)

c. Personal Relations (through co. employees)

d. Existing Policyholders.

2. Sales Illustration: BSLI is the first company to give

demonstration of the fund performance i.e. how a certain

policy will perform or will give returns. BSLI Advisors

give sales illustration. Fund performance is shown on 6%

and 10% projections. If client find these projected returns

suitable to his/her risk profile, he go for purchasing the

policy.

3. Proposal Form : Now as client is ready to get

insured, advisor gives him the proposal form and

asks for all the documents required. Proposal form

is a 4 page document that contains all the necessary

information related to the Insured and the Owner of

the policy. Documents required along with the

proposal form are:

Date-Of-Birth Proof

Address & ID Proof

Income Certificate

Medical Certificates (only if Insurer is a senior

citizen)

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4. After Sales Service : Now after the Insurance is

sold, follow-ups are required. Advisor needs to

maintain good relations with the policyholder.

Insurance co. can

Generate further business, only if, existing

policyholders are satisfied with the services being

provided by the advisor of the co. Thus, BSLI keeps

this in mind and Business Development Executives

continuously track the needs of the policyholders. BSLI

provides the policyholders with monthly updates of the

fund performance and

also discloses the asset portfolio of the fund. This

assists the policyholders to manage their policy

according to their risk profile. They can, thus, change

their fund allocation as well as the asset allocation in

any fund, chosen by them.

COMPANY PRODUCTS /

PLANS

All the plans associated with BSLI are Unit Linked Plans.

Flexi Plans

Flexi Plans have three variants. These variants are:

26


1. Flexi Save Plus (Endowment Plan)

2. Flexi Cash Flow (Money Back Plan)

3. Flexi Lifeline (Whole of Life Plan)

Features:

• This is a Unit Linked Plan with guaranteed returns.

• Provides flexibility with Top-Up Facility.

• For Quarterly modal premium less than Rs.5000,

payment can be made through ECS.

• Policyholder can attach riders to the plan according

to his/her needs.

• Liquidity in the form of Partial withdrawals.

• Three Investment Fund options are available with

the policy and policyholder is free to switch

between funds anytime during the tenure of the

policy.

• The Sum Assured may be increased once in every 5

policy years, starting from the 6th policy year.

• Premium can be paid annually, semi-annually,

quarterly and monthly

Premium Invested: Collected Premium is invested in three

Investment Fund Options. These funds are:

1. Protector

2. Builder

3. Enhancer

27


Benefits:

1. Maturity Benefits : At maturity, Policyholder gets

the higher of the guaranteed fund value (min. 3% on

premium) or the Total Fund value.

2. Survival Benefits :

(i) At the end of every 5th Coverage Benefit Period

and the remainder on maturity, an amount

equals to the minimum of (a) or (b) mentioned

below will be reduced from the guaranteed fund

value and transferred to the holding account for

the purpose of partial withdrawals, where-

(a) Guaranteed Fund Value

(b) Sum Assured % as stated below:

• 30% if the Coverage Benefit

Period is 10 years.


Period is 15 years.


Period is 20 years.


Period is 25 years.

If survival benefits are not withdrawn, they will

continue to be a part of the Fund Value.

(ii) If the life insured is a minor,

policyholder can withdraw the survival

28


benefit payout within one month from

the scheduled payout date from the fund

value.

3. Death Benefits :

Age at time of

DeathDeath Benefits

30 days to 1 year Fund Value Only

Age 1 Year to 60

Year

Higher of Sum Assured less all partial withdrawals made in 24

months preceeding the death of life insured or the fund value or

the guaranteed fund value.On or After

attainment of 60

Years

Higher of Sum Assured less all partial withdrawals made since

the life insured attained the age 58 or the fund value or the

guaranteed fund value.

Charges:

1. Mortality Charges : These charges are deducted by

canceling units on a monthly basis at the prevailing

NAV. The annual mortality charges per 1000 sum

assured for sample ages are as follows:

Age 20 30 40 50 60Male 1.01

6

1.17

1

2.15

0

5.53

2

13.732

Female 0.89

6

1.16

3

1.65

7

4.03

0

10.660

29


2. Partial Withdrawal Charges : 2 withdrawals in a

policy year are free of charge. Rs100 for every

additional partial withdrawal are charged.

Classic Life Premier

This is the plan that not only helps to save for the future but

also helps to get rich benefits from the investments,

especially at a time when the need for family protection

reduces significantly.

Features:

• The plan is a unit linked, non-participating plan.

• This plan has the option of seven-investment fund

with the flexibility to allocate the premiums in

varying proportions into the different Fund Option.

• Top up facility is there. The minimum amount of

top ups is 10000.

• The plan offers further benefits in the form of

additional units, which will be added to the Fund

value at the end of the 10th policy year.

• There is high liquidity in the form of Partial

Withdrawals and Surrender Benefits.

• Death Benefits, which will be higher of the Fund

value or Sum Assured, reduced by the applicable

partial withdrawals.

Eligibility:

• Entry Age:

30


Minimum: 30 days for 20 & 30 term

8 years for 10 terms

30 years for whole life

Maximum: For 10 years term- 60 years

For 20 years term- 50 years

For 30 years term- 40 years

For Whole Life- 60 years

• Duration:

Minimum: 10 years

Maximum: 70 years (assuming whole life to

be 100 years)

• Maturity Age: 70 years for the term- 10,20,30 years

100 years for whole life

• Premium Payment Term: For 10 years term- 3, 5yrs

or regular coverage

paying period.

For 20 yrs, 30yrs term

and Whole Life- 5yrs, 10

yrs or regular coverage

paying period.

Premium Investment: Premium collected is invested in

Seven Investment Fund Options:

1. Assure

2. Protector

3. Builder

4. Enhancer

5. Creator

31


6. Magnifier

7. Maximiser

Benefits:

1. Guaranteed Addition : It is in the form of additional

units, which is added to the fund value on the 10th

policy anniversary and on every 5th policy

anniversary thereafter, while policy is in effect.

2. Partial Withdrawal Options : Partial Withdrawals

can be made after 3 policy years or when the life

insured attains maturity, whichever is later. The

minimum partial withdrawal amount is Rs.10000

3. Surrender Benefits : Policy offers the flexibility of

surrendering the policy, if the need arises. There is

no surrender charge after 6 completed policy years.

However, if the policy is surrendered within 3 years

from inception, the surrender value is paid after the

completion of the third policy anniversary.

4. Death Benefits :

• Below 5 years: If the death of the life

insured take place before 5 years, only the

fund value shall be payable to the policy

owner.

32


• Between 5 to 60 years: Higher of the fund

value or the sum assured less all applicable

partial withdrawals made in the last 24

months preceding the death of the life

insured.

• 60 years and Above: Higher of the fund

value or the sum assured less all applicable

partial withdrawals made since the life

insured attained the age of 58.

5. Maturity Benefits : On maturity of the policy, the

fund value is payable. Under the whole life option,

on maturity of the policy, when the life insured

attains the age of 100, then fund value is payable

and the policy will be terminated.

6. Tax Benefits : Tax benefits on premium payment are

governed by section 80C of the Income Tax Act

1961. Tax Exemptions on the amount received on

maturity in the unfortunate event of death and the

withdrawals are governed by section 10(10D).

7. Addition of Riders : Policy holder can customize the

plan by adding any of the following 6 riders:

1. Accidental Death & Dismemberment Rider

2. Term Rider

3. Critical Illness Rider

4. Critical Illness Plus Rider

5. Critical Illness Women Rider

6. Waiver of Premium Rider

33


Charges:

1. Premium Allocation Charges : These charges during

the premium paying term are as under:

Policy Year 1 2 or 3 Thereafter

Charge 13% 4% 2%

This charge on Top-up and underwriting extra is 2%.

2. Mortality Charge : This charge will be deducted by

cancellation of units on a monthly basis at the

prevailing NAV. The Annual Mortality charge per

1000 of the Sum at risk for sample ages are as

follows:

Age 25 35 45 55 65

Female 1.023 1.162 2.385 6.441 15.92

Male 1.083 1.363 3.110 8.571 21.06

3. Fund Management Charge : This is charged by

adjustment of the daily NAVs. The charge is:

• 1% p.a. for Assure, Protector, Builder and

Enhancer Fund.

• 1.25% p.a. for Creator, Magnifier and

Maximiser Fund.

4. Policy administration Charge : The charge is

deducted by canceling units on a monthly basis at

34


the prevailing NAV. The annual charge differs

according to the Life Insurance Coverage Sum

Assured and Life Insurance Coverage Paying

Period. The maximum charge is 6.10 and the

minimum charge is 0.00

5. Surrender Charge : These charges are levied as the

percentage of the annual life insurance coverage

Premium payable. Charges are as follows:

Policy Year 1 2 3 4 5 6 7+

Surrender

Charge30% 20% 15% 10% 8% 6% NIL

6. Rider Premium Charge : If the riders are attached,

this charge will be realized by cancellation of units

on a monthly basis based on the equivalent monthly

rider coverage premium payable, when rider

coverage payment period equals the rider coverage

benefit period.

Gold Plus II Plan

35


The plan gives much more than a good insurance cover, an

opportunity to grow investment for the medium term. It is

worth more than Gold.

Features:

• It is a Unit Linked, Non-Participating, Insurance

plan.

• Duration of plan is 8 years.

• Premium paying term of 3 years with the flexibility

to reduce premium up to Rs. 10000 from the second

policy year.

• Plan also has Top-up facility.

• Liquidity in the form of Partial Withdrawals and

Surrender Benefits.

• Plan has 7 fund options.

• Free unlimited fund switching and premium

redirection

Eligibility:

• Entry Age: 18 to 70 years.

• Minimum Premium: Rs.50000

• Minimum sum Assured: 5 x Annual Premium

Premium Investment: Premium collected is allocated in

varying proportions in seven investment fund options.

Policyholder can switch between the fund options anytime

during the tenure of the policy. The seven Investment

Funds available are:

1. Assure

36


2. Protector

3. Builder

4. Enhancer

5. Creator

6. Magnifier

7. Maximiser

Benefits:

1. Maturity Benefits :

On maturity fund value will be paid to the

policyholder.

2. Death Benefits :

In the Unfortunate event of the Death of the Life

Insured prior to the maturity date of the policy, the

nominee gets the greater of

(a) Fund Value

(b) Sum Assured reduced for partial withdrawal

as follows:

• Before the life insured attains the

age of 60, the sum assured payable

on death is reduced by partial

withdrawals made in the

preceeding years.

• Once the Life Insured attains the

age of 60, the Sum Assured

payable on death is reduced by all

partial withdrawals made from age

58 onwards.

3. Tax Benefits :

37


Policyholder is eligible for tax benefits U/S 80C and

U/S 10(10D) of the Income Tax Act 1961.

• U/S 80C- Premium up to Rs.100000 is

allowed as deduction from taxable income

each year.

• U/S 10(10D) - The Benefits received under

plan are exempted from tax.

Charges:

1. Premium Allocation Charges:

It is deducted from premium when received and

before allocation of units.

Policy

Charges

Policy Years

1 2 3 4+On Policy

Premium 8% 4% 4% On top-up

Premium 2% 2% 2% 2%

2. Fund Management Charges :

Fund Management charge not exceeding 1.5% per

annum of the fund value will be charged by

adjustments of the daily unit price. The charge is

• 1% p.a.- Assure, Protector, Builder and

Enhancer

• 1.25% p.a. – Creator, Magnifier and

Maximiser

38


3. Policy Administration Charges :

These charges are recovered by canceling units on a

monthly basis proportionately from each investment

fund. The annual Rate per 1000 of Sum Assured is:

Policy

Charges

Policy Years

1 2 3 4+Policy

Administration

Charge *

19.4 19.4 19.4 14.4

* An additional 5 per 1000 will be charged in the

first 3 policy years only on any excess Sum Assured

over Rs. 50000

4. Mortality Charges : These charges are deducted on a

monthly basis. These charges are taken by canceling

units proportionately from each of the investment

funds at that time. The annual rate per 1000 of Sum

Assured less fund value for sample ages are:

Age 25 35 45 55 65

Female 1.023 1.162 2.385 6.441 15.92

Male 1.083 1.363 3.110 8.571 21.06

39


5. Surrender Charges :

These charges are applied when the policyholder

surrender their policy in the first 3 policy years. The

surrender charge as a percentage of the annual

policy premium chosen at issue is

Policy

Charges

Policy Years

1 2 3 4+Surrender

Charges15% 12.5% 10% nil

Supreme Life Plan

Features:

• The plan is a Unit Linked Insurance Plan.

• It provides the nominee with an increased sum

assured and builds savings faster.

• The plan offers more protection of money at

supremely low cost.

• Provides with Supreme Accidental TPD (Total

Permanent Disability).

• Policyholder gets freedom to choose premium

amount as low as Rs.25000

• The plan provides with 6 Investment Fund Options.

• The plan is flexible as it provides the policyholder

with Top-Up Premium facility to ensure faster

growth in the Fund Value.

40


• Partial Withdrawals, are allowed, after 3 years to

meet liquidity needs of the policyholder

Duration:

• Policy Term : 10, 15, 20, 25, 30, 35, 40 Years.

• Premium Payment Term : Policyholder can choose

to pay premium at short or regular intervals.

Premium Investment: Premium Collected is investment in

six investment fund options. These funds are:

1. Assure

2. Protector

3. Builder

4. Enhancer

5. Creator

6. Magnifier

Benefits:

1. Death Benefits :

• Double Death Benefits i.e. Death Benefits=

Sum Assured + Savings

• Increasing Death benefits i.e. Death Benefit=

Sum Assured + 25% every 5th year

2. Accidental TPD Benefit :

• Policyholder immediately gets the original sum

assured up to Rs.50 lac

• Co. pays the future premiums up to age 60.

3. Switches & Redirection :

41


• Policyholder gets flexibility to switch between

the fund options. Two switches are free per

annum.

Charges:

1. Mortality Charges : Charges are deducted monthly

by canceling units from the associated fund option.

The charge is 95%

2. Policy Administration Charges : These charges are

deducted monthly by canceling units from the

investment fund. The annual charge is Rs. 720 on

the first 1000 Sum Assured in all years i.e. Rs.3.60

per 1000 Sum Assured p.a. The additional charges

for years 1-5 are as follows:

Term Band 1 Band 2 Band 3

10/15 4.75 4.25 4.00

20+ 3.75 3.25 3.00

3. Premium Allocation Charges : These charges are 5%

for the 1st policy year and 2% for subsequent policy

years.

4. Fund Management Charges : These charges are 1 –

1.25% p.a. for all associated funds.

Platinum Plus Plan

Features:

42


• This plan is a Unit Linked, Non-Participating,

Insurance plan.

• A policy term of 10 years.

• A premium paying term of 3 years.

• One Innovative Investment fund, namely Platinum

Plus Fund I.

• Full Liquidity after three policy years to meet any

cash needs.

• Unique Guaranteed Maturity Unit Price

representing the highest unit plus price of Platinum

Plus Fund I recorded on 88 reset dates starting on

March 17, 2008 and ending on June 15, 2015.

Eligibility:

• Entry Age of Life Insured: 18 to 70 Years.

• Minimum Annual Premium: Rs. 1,00,000

• Minimum Sum Assured: 5xAnnual Premium.

Premium Collected is invested in the Equity & Debt

Market according to the preset Asset Allocation of the

Platinum Plus Fund I.

Benefits:

1. Guaranteed Maturity Unit Price

• Minimum of Rs. 10 on the first Reset Date

• At maturity, is the highest Unit Price recorded on 88

Reset Dates

2. Maturity Benefits

43


• Number of units multiplied by higher of Guaranteed

Maturity Unit Price or prevailing Unit Price at

maturity

3. Surrender Benefits

• Full liquidity after 3 policy years –100% Fund

Value*

4. Death Benefits

• Higher of Fund Value (as per the then

prevailing unit price) or Sum Assured (less

applicable partial withdrawals)

5. Tax Benefits

• U/S 80C- Premium up to Rs.100000 is

allowed as deduction from taxable income

each year.

• U/S 10(10D) - Benefits from the plan are

exempted from tax.

Charges:

1. Premium Allocation Charges : 10% of

premium in the first year and 4% of

premium in subsequent years.

2. Fund Management Charges : 1.00%-1.50%

p.a. for Assure & 1.50%-2.00% p.a. for

Platinum Plus Fund I.

3. Policy Administration Charges : These

charges are deducted monthly by canceling

44


units from the investment fund Assure first

and then, from Platinum Plus I, if required.

The annual charge is Rs. 720 on the first

1000 Sum Assured in all years plus Rs.6 per

1000 Sum Assured in years 1 to 3 only.

4. Mortality Charges : Charges are deducted

monthly by canceling units from the

associated investment funds. The Annual

Charges for sample ages are as follows:

Attained

Age25 35 45 55 65

Female1.02

3

1.16

2

2.38

5

6.44

115.920

Male1.08

3

1.36

3

3.11

0

8.57

121.060

5. Surrender Charges : This charge, as a

percentage of the annual premium at issue,

is 16%, 13% and 10% for policy year 1, 2

and 3 respectively.

6. Revival Charge : The charge for policy

revival is Rs. 100-1000 per revival

45


FUNDS BY BSLI

Birla Sun Life Insurance, a leading Life Insurance

company, offers its clients with a long range of Funds.

These funds are designed to cater to a variety of needs of

people who are from different life stages. BSLI offers a

broad range of 12 funds, each having differing asset

allocations.

12 funds offered are:

1. Individual Protector

2. Individual Assure

3. Individual Balancer

4. Individual Builder

5. Individual Creator

6. Individual Enhancer

7. Individual Life Maximiser

8. Individual Magnifier

9. Individual Multiplier

10. Pension Nourish

11. Pension Enrich

12. Pension Growth

A new fund named Platinum Plus Fund I is also added in

this list of funds.

Asset Allocation is decided by the Fund Managers of the

company. These fund managers continuously tracks the

movements of volatile market and combine this volatility

46


with the fund requirements of the policyholders.

Accordingly he decides allocation of assets in 5 major

investment options:

Government Securities

Corporate Debt

Securitized Debt

Equity

Money Market Instruments

Proportion of allocating the fund in these options, vary

according to the needs and fund requirements of

policyholders. The most important thing to be noticed here

is that this portfolio is decided, based on the regulations of

IRDA. Performances of these funds are rated by the rating

agency-CRISIL.

All the 12 funds by BSLI are described below along with

their respective Asset Allocations.

Individual Assure

Objective: The primary objective of this fund is to provide

Capital Protection, at a high level of safety and liquidity

through judicious investments in high quality short-term

debt.

Strategy: Generate better return with low level of risk

through investment into fixed interest securities having

short-term maturity profile.

47


Asset Allocation:

SECURITIES HOLDING

Corporate Debt 59.57%

Money Market Instruments 17.97%

TOTAL 100.00%

HOLDING

59.57%

17.97%

100.00%

Corporate Debt

Money MarketInstruments

TOTAL

Individual Balancer

Objective: The objective of this fund is to achieve value

creation of the policyholder at an average risk level over

medium to long-term period.

48


Strategy: The strategy is to invest predominantly in debt

securities with an additional exposure to equity,

maintaining medium term duration profile of the portfolio.

Asset Allocation:

SECURITIES HOLDINGS

Government Securities 10.67%


Equity 23.44%


TOTAL 100.00%

HOLDINGS

10.67%

39.04%

23.44%

26.85%Government Securities

Corporate Debt

Equity


Pension Growth

Objective: This fund option is designed to build the capital

and to generate better returns at moderate level of risk, over

49


a medium or long-term period through a balance of

investment in equity and debt.

Strategy: Generate better return with moderate level of risk

through active management of fixed income portfolio and

focus on creating long term equity portfolio which will

enhance yield of composite portfolio with low level of risk

appetite.

Asset Allocation:

SECURITIES HOLDINGS



Equity 18.63%

Money Market Instruments 22.06%TOTAL 100.00%

HOLDINGS

13.90%

45.41%18.63%

22.06%


Corporate Debt

Equity


50


Pension Enrich

Objective: Helps to grow the capital through enhanced

returns over a medium to long-term period through

investments in equity and debt instruments, thereby

providing a good balance between risk and return.

Strategy: To earn capital appreciation by maintaining

diversified equity portfolio and seek to earn regular return

on fixed income portfolio by active management resulting

in wealth creation for policyholders.

Asset Allocation:

SECURITIES HOLDINGS



Equity 32.69%


TOTAL 100.00%

51


HOLDINGS

14.35%

39.40%32.69%

13.57%


Corporate Debt

Equity


CONCLUSION

Our training was a very enriching experience for us, we

have learnt so many things, and we got insight into the

insurance world. Insurance sector today playing a major

role in everyone’s life lot more than ever before life

currently there is a comprehensive range of products

covering each type of policy available in the market. We

have studied various insurance plans covered under BSLI,

and their features. BSLI also gives various Riders, which

provides extra benefits to the customers. And we came to

52


know about the pioneering features of BSLI, like sales

procedure, SIP, etc.

While most insurance plans block money for certain period

of time, a BSLI plan gives the double benefit of life

insurance along with easy liquidity through lump sum

cash.

Birla Sun Life Insurance (BSLI), one of the largest private

life insurers, is gearing itself to take advantage of the vast

rural opportunity that has opened up as a result of the

revised definition of rural areas by the IRDA. Over the last

four years, BSLI has painstakingly built its rural

infrastructure to create a cost-effective distribution

network across the country.

Our training gave us corporate exposure, and helped in

improving our communication skills. We learnt to deal

with customers, we made them aware about various plans,

and their respective features, even helped them to select

the best plan as per their requirements.

RECOMMENDATIONS

1. Competition from public sector and foreign banks remains a

key challenge for private sector banks. They need to reorient

53


their staff and effectively utilize technology platforms to retain

customers.

2. They have to update their portfolio timely.

3. Birla Sun Life Insurance Ltd should have proper division of

departments under heads.

4. Birla Sun Life Insurance Ltd should have more pension plans.

5. Birla Sun Life Insurance Ltd should have more children plans,

and more help line plans

6. They should provide more information to the customer so that

they become more aware about insurance

BIBLIOGRAPHY

1. www.birlasunlife.com Dated 13/6/08 Time 3:30

2. www.Paisawaisa.com/LifeInsurance Dated 13/6/08 Time 4:00

3. Company brochure

4. Company brochure/ GOLD- PLUSII PLAN/ Ver 01/12/07

5. Company brochure/ Classic Life Premier/ Ver 8/9/07

54

http://www.Paisawaisa.com/LifeInsurance%20Dated%2013/6/08%20Time%204:00


ANNEXURE

1. Do you make investments?

A.Yes

B.No

2. How much you earn annually?

A. Below 50,000

B. 50,000-100,000

C.100, 000-1, 50,000

D. Above 150000

3. Do you know about insurance?

A. Yes

B. No

4. Do you know about BSLI?

A. Yes

B.No

55


5. How did you came to know about it?

A Newspapers

B. Online

C. Personal Reference

D. Other

6. What assets do you own?

A. Personal house

B.Car

C.Credit card

7. Where would you like to invest?

A. Mutual Fund

B.Stocks

C.Real estate

D.Insurance

56


8. What would u like to insure?

A. Vehicle

B.Life insurance

9. Which insurance plan of BSLI are

you interested in?

A.Saral Jeevan

B.Gold Plus II

C.Platinum Plus

D.Classic Life Premier

10. How do you rate our plans?

A. Average

57


B. Good

C. Excellent

58


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60


61


62


63


64


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