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INTRODUCTION
The project started with class room sessions involving lectures and interactionswith the
mentors Mr. Sanchit Sachdeva (SDM) and Mr. Hridesh Chauhan(BM). They explained all the
plans available with HDFC SLIC in detail andthe pension plan comparison of BIRLA SUN LIFE,
BAJAJ ALLIANZ & LIC.The classroom also involved role plays and games. The role plays
and gamesinvolved students being asked to play the roles of customers or clients and thatof a
person trying to persuade the customer to go in for a plan with
HDFCSLIC.These class room lectures and role-
plays helped me to gain a substantialunderstanding of the plans. This in turn helped me to
effectively explain these plans to people whom I meet or took appointment to meet.The
connect of life insurance has undergone several changes over the years andwhat has myriad
array of attractive options apart from the basic of life
cover.Life insurance schemes also offer tax benefits. In todays scenario lifeinsurance solves the
three objectives.
1.Security
2.Saving
3.Tax Benefit
EXECUTIVE SUMMARYThis project is based upon the fact & figure gathered from the websites about the plans of the
firm.In the first part of the report there are some plans which are frequently sold byH D F C
SLIC in the market , and then comparat ive study of pens ion p lan of d i f ferent
firm namely BIRLA SUN LIFE, BAJAJ ALLIANZ and LIC is there
OBJECTIVE OF STUDY1.Comparative study of HDFC SLIC, BIRLA SUN LIFE, BAJAJALLIANZ and LIC.2.To analyze the pension plan on the basis of features offered.
3.To observe working of various d epartments of the organization
EXECUTIVE SUMMARYThis project is based upon the fact & figure gathered from the websites about the plans of the
firm.In the first part of the report there are some plans which are frequently sold byHDFC
SLIC in th e mark et , and th en co mparat ive s tudy of pe nsion plan of different
firm namely BIRLA SUN LIFE, BAJAJ ALLIANZ and LIC is there
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.In the last part of the project I have given some of the findings and conclusionabout the life
insurance market and what is the potential of th e market. In the end I have give all
the sources from which I have collected all the information
COMPANY PROFILEHDFC LIMITEDHDFC was incorporated in 1977 with the primary objective of meeting a socialneed that of
promoting home ownership by providing long-term finance tohouseholds for their housing
needs. HDFC was promoted with an initial sharecapital of Rs. 100 million. Business ObjectivesThe primary objective of HDFC is to enhance residential housing stock in thecountry through the
provision of housing finance in a systematic and professional manner, and to promote home
ownership. Another objective is toincrease the flow of resources to the housing sector byintegrating the housingfinance sector with the overall domestic financial markets. Organizational GoalsHDFCs main goals are toa) Develop close relationships with individual households,b) Maintain
its position as the premier housing finance institution in thecountry,c) Transform ideas into viable
and creative solutions,d) Provide consistently high returns to shareholders,e) To grow through
diversification by leveraging off the existing client base.
HDFC STANDARD LIFEThe Partnership:HDFC is an organization that strives for excellence, with the twin objectives of enhancing
customer satisfaction and shareholder valueHDFC and Standard Life first came together for a
possible joint venture, toenter the Life Insurance market, in January 1995. At the outset it was
clear that both companies shared similar values and beliefs and a strong relationshipquickly
formed. In October 1995 the companies signed a 3 year joint ventureagreement.Around this time
Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next
three years were filled withuncertainty, due to changes in government and ongoing delays in
getting theIRDA (Insurance Regulatory and Development authority) Act passed
in parliament.Despite this both companies remained firmly committed to the venture.In October
1998, the joint venture agreement was renewed and additionalresource made available. Aroundthis time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd.
(IDFC). Standard Life alsostarted to use the services of the HDFC Treasury department to advise
themupon their investments in India.Towards the end of 1999, the opening of the market looked
very promising and both companies agreed the time was right to move the operation to the
nextlevel. Therefore, in January 2000 an expert team from the UK joined a hand picked team
from HDFC to form the core project team, based in Mumbai.
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Around this time Standard Life purchased a further 5% stake in HDFC and a5% stake in HDFC
Bank. In a further development Standard Life agreed to participate in the Asset Management
Company promoted by HDFC to enter themutual fund market. The Mutual Fund was launched
on 20th July 2000.The company was incorporated on 14th August 2000 under the name:
HDFCStandard Life Insurance Company Limited.Their ambition from as far back as October
1995 was to be the first privatecompany to re-enter the life insurance market in India. On the
23rd of October 2000, this ambition was realized when HDFC Standard Life was the only
lifecompany to be granted a certificate of registration.HDFC are the main shareholders in HDFC
Standard Life, with 81.6%, whileStandard Life owns 18.4%. HDFC and Standard Life have a
long and closerelationship built upon shared values and trust. The ambition of HDFCStandard
Life is to mirror the success of the parent companies and be theyardstick by which all other
insurance companies in India are measured.HDFC Standard Life Insurance Company has been
signed on by Blue Star to provide insurance cover to its 1,805 employees across India and
overseas.HDFC Stand ard Life Ins uranc e is one o f th e le ading player s i n th e
gr ou p insurance segment of the life insurance business. Its group business hasgrownsignif icant ly s ince incept ion and now covers over 25,000 l ives ,
a c ro ss th e entire industry spectrum including software, FMCG, pharmaceuticals,
banking,consultancy, BPOs, retailing, and consumer electronics
MISSION:-HDFC Standard Life aims to be the top new life insurance company in themarket.This does not
just mean being the largest or the most productive company inthe market, rather it is a
combination of several things like:Customer service of the highest order
Value for money for customersProfessionalism in carrying out businessInnovative products to cater to different needs of different customers
Use of technology to improve service standardIncreasing market share
VALUES:-1.SECURITY:Providing long term financial security to its policy holderswill be the companys constant
endeavor. It will do this by offering lifeinsurance and pension products.2.TRUST
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: HDFC Standard Life appreciates the trust placed by its policyholders in it. Hence, it will aim
to manage their investments verycarefully and live up to this trust.3 . I NNOVATI ON: Recognizing the different needs of its customers, itwill be offering a range of innovativeproducts to meet these needs. Thecompanys mission is to be the best new life insurance
company in Indiaand these are the values that will guide it in this
Why HDFC Standard Life?There are many reasons why one may choose HDFC Standard Life InsuranceCompany Ltd. asyour partner in meeting your insurance needs:a) Innovative products to meet your needs. b)
Efficient customer service team.c) Good financial track record of both parentsHDFC and
Standard Life.d) Certified Financial Consultants to advise you.e) Professional approach in
managing your investments.f) Income Tax benefits for our insurance products.
FINANCE DEPARTMENT AT HDFC STANDARD LIFEThe finance department of HDFC Standard Life Insurance is headed by theGeneral Manager
(Finance), who reports to the MD and CEO. There are four other departments under the Finance
Departments. These are:1. Accounts Department2. Actuary Department3. InvestmentDepartment4. Underwriting DepartmentThe Accounts Department:The Accounts Department functions like any other Accounts department. It isconcerned with the
disbursement of salaries, reimbursements, incentives,commissions to agents. It also handles the
payments due to other agencies withwhich the Company interacts, viz. event management
companies etc. The work of an Accounts department assumes much importance in an insurance
company because it has to be able to pay the claims arising time to time.
The Actuary Department:The Actuary Department is the Pricing Department of an insurance company.It must be
understood that thebasic premise on which the insurance companieswork is use the corpus of
policy holders for disbursement for any claim.Based on this principle, this department decides
the amount of premium to becharged from a client for a particular policy. This is normally done
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with thehelp of Mortality Tables, which can either be prepared by the company itself,or the
company can use the existing tables available for its use. The IRDA(Insurance Regulation
Development Authority) has prescribed the use of themortality tables used by LIC for all other
companies.The Actuary Department is also responsible for Asset-Liability Management of the
insurance company. It must ensure that the Solvency margin (Assets-Liabilities) must be at least
Rs 50 crores, as prescribed by IRDA. 95% of thesurplus above this has to be distributed to the
investors a bonus. HDFCStandard Life has till now declared three bonuses to its policyholdersThe Investment Department:The Investment Department is responsible for the investment of the money of the investors.
Since the basic reason for the investors investing their money inLife Insurance is security, IRDA
has put certain regulations on such companiesfor investments so that the money of investors is
safe.
These guidelines are:
1. not less than 50% of the corpus will be invested in Government Securities(G-Sec)
2. Up to15% of the corpus will be invested in infrastructure, social and ruralsectors
3. Not less than 20% can be invested in government and other equities.
4. Remaining 15% can be invested in unapproved equities.Till recent time, HDFC has not been
investing in equities. But now it hasdecided to follow the footsteps of its Joint-Venture partner
Standard Life,which invests around 75% of its corpus in equities. The InvestmentDepartment is
also responsible for calculating the returns of the investment tothe investors. Here also the
insurance companies are bound by regulations andguidelines. According to IRDA, the returns
have to be in the range of 6 %-9 %.The Underwriting DepartmentThis department is responsible for taking the decision on whether to insure a person or not. For
this it must take into account the risk premium associated,the reinsurance opportunities etc.
normally, there are charts available with the people of this department on the basis of which they
can come to a viabledecision.
Underwriting is done on the basis of two grounds
Financial Grounds: here the underwriters decide on the worth of the person by taking into account his tax returns
of the last three years. On this basis theyare able to assess the premium paying ability of that
person and accordinglytake a decision.
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Medical Grounds:each new customer is required to undergo acomprehensive medical test, which determines the
persons general health. Onthe basis of this report, the underwriters decide upon the premium to
becharged from customer.Functions of InsuranceThe functions of Insurance can be bifurcated into three parts:1. Primary Functions
2. Secondary Functions
3. Other FunctionsThe primary functions of insurance include the following:1)Provide Protection- The primary function of insurance is to provide protection against future risk, accidents and
uncertainty. Insurance cannotcheck the happening of the risk, but can certainly provide for the
losses of risk.
Insurance is actually a protection against economic loss, by sharing the risk with others.2)Collective bearing of risk - Insurance is a device to share the financial lossof few among many
others. Insurance is a mean by which few losses are sharedamong larger number of people. All
the insured contribute the premiumstowards a fund and out of which the persons exposed to a
particular risk is paid.3)Assessment of risk - Insurance determines the probable volume of risk byevaluating various factors
that give rise to risk. Risk is the basis for determining the premium rate also 4) Provide Certainty- Insurance is a device, which helps to change fromuncertainty to certainty.
Insurance is device whereby the uncertain risks may bemade more certain. The secondary functions of insurance include the following:1)Prevention of Losses- Insurance cautions individuals and businessmen toadopt suitable device to
prevent unfortunate consequences of risk by observingsafety instructions; installation of
automatic sparkler or alarm systems, etc.
Prevention of losses causes lesser payment to the assured by the insurer andthis will encourage
for more savings by way of premium. Reduced rate of premiums stimulate for more business
and better protection to the insured.
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2)Small capital to cover larger risks- Insurance relieves the businessmenfrom security investments,
by paying small amount of premium against larger risks and uncertainty.
3)Contributes towards the development of larger industries- Insurance provides development
opportunity to those larger industries having more risksin their setting up. Even the financial
institutions may be prepared to givecredit to sick industrial units which have insured their assetsincluding plantand machinery.
The other functions of insurance include the following:1)Means of savings and investment- Insurance serves as savings andinvestment, insurance is a
compulsory way of savings and it restricts theunnecessary expenses by the insured's For the
purpose of availing income-taxexemptions also, people invest in insurance.
2)Source of earning foreign exchange- Insurance is an international business. The country can earnforeign exchange by way of issue of marineinsurance policies and various other ways. 3)Risk Free trade- Insurance promotes exports insurance, which makes theforeign trade risk
free with the help of different types of policies under marineinsurance cover
SOME TERMS ABOUT ULIP PLANS
Fund ManagementThe crux of the entire product is the returns that this product can generate andthis is dictated by
the management of the fund. There is no great value in doingwell in all other aspects of the
product delivery if the fund does not performwell.The insurance company has two options
with regards to the management of thefu nd i. e . ex t er n al an d in te rn al . Ex t er n al
funds usually have a proven track record that could be used as a significant
marketing too. In India many of theinsurance companies, which are apart of th e
lar ger financial servi ces groups, already have a sister fund Management Company and they
could bank on their performance. For others, they would usually be having an in-house
investment
team and this could be extended to management of the funds too. The
e x p e n s e s a n d h e n c e t h e c o s t s h o u l d b e k e p t i n m i n d a s b y n a t u r e t h e u
n i t l i n k e d insurance product is a very transparent product and hence this would become
asignificant selling point in the long run.Charges and ExpensesThere are different charges
that can be levi ed by the insurance companies, some of the more common ones
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are:1 ) I n i t i a l c h a r g e s 2 ) A n n u a l c h a r g e s 3 ) In v es t me nt c h ar ge s 4 ) M o r a l i t y
c h a r g e s 5 ) S u r r e n d e r c h a r g e s Initial chargesInitial charges are applied at the time of setting up the policy; this could be inthe fo rm o f ab ind o f fe r sp read and a l so in the fo rm of a l loca t ion o f un i t s known as the
allocati on facto r. It is also possi ble to be levying a per member level charge.Annual chargesThe annual charges can either be fixed or can be linked to the size of the fund.It could also be
linked to the number of members in the scheme. This charge isusually taken to cover the
maintenance expenses of the insurer.
A fund management charge i s l ev ied to t ake ca re o f the fund
m an ageme nt expenses depending upon whether the fund is managed internally or externally.Mortality chargesI t i s poss ib le to have an insurance e lement bu i l t in to the super
an nu at io ncontract and in case of a gratuity there would be an element of insurance
thedegree and the form could differ from company to company.The insurance premium can be
taken as a part of the gratuity contract of it can b e admi n i s t e red o u ts id e t hi s b u t
p ac ka ge d t o l oo k as i f i t is a wh ol e s om e product offering gratuity and insurance to
the employees of the organization.
Surrender ChargesThe surrender charges can be used in multiple ways. It could be used as a wayof recouping the
initial outlay of the insurer in case the company decides towithdraw in the early years
of the contract or it could be used as a deterrent for the company to shift the service provider at
any point of the contract. Usuallythe surrender charges/ penalty would decrease over a period oftime and would be expressed as a percentage of the fund.
Administration
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The un i t l inked po l ic ies a re s ign i f i can t ly complex to admin is te r and
alsowould need a very highly technically trained customer service department
tohandle enquiries. Much of the administer the policy, As the allocation of unitsw o uld b e
ti me d epe nde nt i t is ext rem ely imp ort ant to hav e a ver y ro bus t system that can
take care of allocation, de allocation and reallocation of units.
PLAN BENEFIT
Savings Plans
Endowment Assurance PlanUnit LinkedEndowment PlanChildrens PlanMoney Back PlanUnit
Linked Young Star Plan
Life Insurance with SavingsLife Insurance & Savinwith choiceof investment fundsFinancial Security
for your childFinancial security for your child
withchoice of investment fundsLife Insurance wit
Savings
Investment Plans
S i n g l e P r e m i u m W h o l e o f L i f e
P l a n
I n v e s t m e n t w i t h L i f e I n s u r a n c e
Protection Plans
Term Assurance PlanLoan Cover Term Assurance Plan Life Insurance customized for homeloansLife
Insurance at an affordable price
Retirement Plans
Personal pension planUnit Linked Pension Plan Savings for retirementRetirement Savings with achoice of investment funds
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It is essential to have a s ystem that would be able to talk/ interact with
other s y s t e m s t o c a p t u r e t h e u n i t p r i c e d e t a i l s , t o g i v e o u t p u t s t o a
c c o u n t i n g packages, report generators etc.
INDIVIDUAL PRODUCTS:Each of us leads a unique life and so has unique needs. HDFC Standard Lifeoffers a range
of products and invites you to choose the one that suits you best. PLAN BENEFITSavings PlansEndowment Assurance PlanUnit Linked Endowment PlanChildrens PlanMoney Back PlanUnit
Linked Young Star PlanLife Insurance with SavingsLife Insurance & Savings with choiceof
investment fundsFinancial Security for your childFinancial security for your child withchoice of
investment fundsLife Insurance with SavingsEndowment Assurance PlanEndowment assurance plan is a participating (with profits) insurance plan thatoffers the
following features:Provides financial support to the family by way of a lump sum payment
incase of the unfortunate death of the life assured within the term of the policy.provides a lump
sum payment to the life assured on survival up to maturityThis plan is with profits saving plan
and is well suited for saving money for your long term financial goals. This plan also
helps provide for the needs of your family in your absence by paying out a lump sum in the event
of your unfortunate death during the term of the policy.Optional benefits
You can add the following optional benefits to customise your policy to suityour needs: Critical Illness(CI) Benefit provides an amount, equal to the sumassured chosen under this optional benefit, on
diagnosis of any one of the 6 common critical illnesses(1). The sum assured is payable if
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yousurvive for 30 days after the date of the claim. Once such a claim has been met, no further
Critical Illness Benefit is payable. However, your basic policy continues even after we pay a
claim On this benefit.Additional Term Benefit(ATB) provides an additional amountequal to the sum assured chosen under this optional benefit, in
case of your unfortunate death.
Accidental Death Benefit(ADB) provides an additional amount,equal to the sum assured
chosen under this optional benefit, in case of your unfortunate death:-due to an accident and
within 60 days of an accident.Waiver Of Premium(WOP) Benefit waives the premium for you incase you become totally
disabled. The waiver is applicable during the period of total disability.This plan can be taken ona single life basis or a joint life (first claim) basis.
EligibilityThis plan can be taken as a single life basis or a joint life (first claim)
basis.The eligibility ages are as follows:
BasicPolicy Basic policy with optional benefits
CI ATB ADB WOP
Min age entry 12 18 18 18 18
Minage of entry 60 5 60 55 50
Min age of expire 70 75 70 65 60
M i n i m u m t e r m : 1 0
y e a r s M a x i m u m t e r m : 3 0
y e a r s
Tax Benefits
Tax benefits described in Section 88, Section 80D and Section 10 (10D) of theincome Tax Act are
applicable.Applicable to premium paid for CI and WOPPayment options
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you have the choice of paying your premium either in yearly, half-yearly or quarterly modes,
depending on your convenience
Unit Linked Endowment Plan:The unit linked endowment plan is an insurance policy that is designed to paya lump sumon maturity or on earlier death. The Unit Linked Endowment Planalso gives the option of
additional protection against the six common criticalillnesses, as well as additional protection if
death is as the result of an accident.Your premiums are invested in units of the investment fund
of your choice, based on the prevailing unit price. On maturity you receive the value of
your units. On death (or critical illness, if chosen) you receive the greater of thevalue of your
units and your selected basic sum assured.PremiumsPremiums can be paid either quarterly, half-yearly or annually, throughout theterm of the policy.
The minimum premium amount is Rs. 10,000 each year.Premiums can be paid by cash, cheque
or demand draft.BenefitsThere are 4 different options available to choose from: 1 . L i f e O p t i o n On death within the policy term, the greater of the Sum Assured and thevalue of the unit-linked
fund will be paid to your nominee.On survival to the end of the policy term the value of the unit
linkedfund will be paid to you.
2 .L i f e and Hea l t h Opt i on On death or earlier diagnosis of any one of six common critical illnesseswithin the policy term,
the greater of the Sum Assured and the value of the unit-linked fund will be paid to your
nominee.On survival to the end of the policy term the value of the unit-linkedfund will be paid to
you.The illnesses covered under this option are cancer, coronary arteryby pass graft surgery, heart attack,
kidney failure, major organtransplant (as recipient) and stroke.3 . E x t r a L i f e O p t i o n This option pays the same benefits as the Life Option but, should deathoccur within the policy
term as the result of an accident, an extra benefitequal to the Sum Assured will be paid. 4 .Ext ra L i f e and Hea l t h Opt i on
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This option pays the same benefits as the Life and Health Option but,should death occur within
the policy term as the result of an accident, anextra benefit equal to the Sum Assured will be
paid.Levels of protectionDepending on your age at entry, you may choose between 3 levels of coverLow, Medium or
High. For each level the Sum Assured is based on the amountof premium you pay each year.The
Sum Assured can not be changed during the term of the contract.
Age at entry Levels of cover
Low Medium high
18 to 40 5XPremium 10XPremium 20XPremium
41 to 50 5XPremium 10XPremium
O v e r
5 0
5XPremium
EligibilityThe age and term limits for taking out a Unit Linked Endowment Plan are:(years)
Minimum
term
Maximum
term
Minimum
age at entry
Maximum age
atentry
Maximumage
atexpiry
Life 10 10 30 18 60 75
Life of health 10 30 18 5 65
Extra life 10 30 18 55 70
Extra life andhealth
10 30 18 55 65
The alteration of premium, surrendering of the policy, conditions on stoppingof payment of
premiums and charges are the same as that of the unit linked pensions plan.
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Tax Benefits
Option On the death of insurance
parent during policy term
On maturity
Maturity Benefit Plan Future premium waivedandthe policy continues
tillmaturity
Accelerated Benefit plan Sum assured + bonuses paid
and the policy stops.
On the survival of the insured
parent to the maturity date,
sum assured+ bonuses paid.
Double Benefit plan Sum assured paid,
future premiums waived, and
the policy continues till maturity
Sum assured + bonuses paid
Tax Benefits
The premiums you pay will be eligible for tax relief under Section 88 of theIncome Tax Act,
1961. The benefits received under the policy are eligible for tax relief under Section 100 (10D)
of the income tax act, 1961.
Eligibility : The eligibility ages for the life assured under the plan are as follows:
Minimum Age of Entry18 years
Maximum Age of Entry60 years
Maximum Age of Maturity75 years
Min. Term: 10 years Max. Term: 25 years
Levels of protectionDepending on your age at entry, you may choose between 3 levels of coverLow, Medium or
High. For each level the Sum Assured is based on the amountof premium you pay each year.The
Sum Assured can not be changed during the term of the contract.
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Tax Benefits
Tax benefits under section 88 and section 10 (10D) of the income tax act
areapplicable.Surrendering the policyThe policyholder can surrender the policy at any point of time during thecontract term. The
amount payable will be the unitised fund value after applying additional surrender charges
mentioned below.Accessing money?You can make lump sum withdrawals from you funds provided the fund balance after
withdrawal and charges does not fall below the Sum Assured. Theminimum withdrawal amount
is Rs. 10,000
Children's PlanChildrens Plan is designed to provide a lump sum to the child at maturity. Italso provides
financial security to the child in the future, even in case of theinsured parents unfortunate death
during the policy term. Childrens Planreceives simple reversionary bonuses, which are usually
added annually. Thisis a flexible plan with three options for you to choose from, depending on
your requirements. The details of these options are explained in the next section.
Options
You will have the choice of 3 options at the start of the policy.
Tax Benefits
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Option On the death of insurance
parent during policy term
On maturity
Maturity Benefit Plan Future premium waived
andthe policy continues
tillmaturity
Accelerated Benefit plan Sum assured + bonuses paid
and the policy stops.
On the survival of the insured
parent to the maturity date,
sum assured+ bonuses paid.
Double Benefit plan Sum assured paid,
future premiums waived, and
the policy continues till maturity
Sum assured + bonuses paid
Tax BenefitsThe premiums you pay will be eligible for tax relief under Section 88 of theIncome Tax Act,
1961. The benefits received under the policy are eligible for tax relief under Section 100 (10D)
of the income tax act, 1961.
Eligibility : The eligibility ages for the life assured under the plan are as follows:
Minimum Age of Entry18 years
Maximum Age of Entry60 years
Maximum Age of Maturity75 years
Min. Term: 10 years Max. Term: 25 years
Unit Linked Young Star Plan
HDFC Unit Linked Young Star Plan is designed to provide a lump sum to thechild at maturity. It
also provides financial security to the child in the future,even in case of the insured parent's
unfortunate death during the policy term.The Unit Linked Young Star Plan also gives the option
of additional protectionagainst the six common critical illnesses.Your premiums are invested in
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units of the investment funds of your choice, based on the prevailing unit prices. On maturity
the value of the units will be paid. On death (or critical illness, if chosen) the selected basic sum
assured is paid, and the policy continues until maturity. Following a valid death or criticalillness
claim, we will pay the future premiums (at the level originally chosen atinception) into your
policy, as and when they would have fallen due.
Premiums
You agree to pay a level premium regularly, either quarterly, half-yearly or annually, throughout
the term of the policy. The minimum premium amount isRs. 10,000 each year.Premiums can be
paid by cash, cheque or demand draft.
Benefits
There are 2 different options available:
1.Life Option
This option consists of a Maturity Benefit and a Death Benefit.The Maturity Benefit will pay the
value of the unit-linked fund at the endof the policy term.
The Death Benefit will pay the basic Sum Assured on death of the lifeassured during the policy
term. Following payment of this benefit, nofurther premiums are due from the
policyholder.Following a valid death claim, we will pay future premiums on your behalf, as and
when they become due. The level of premium will be thatchosen by you at inception of the policy.2.Life and Health Option
This option consists of a Maturity Benefit, a Death Benefit and anExtra Health Benefit.The
Maturity Benefit will pay the value of the unit-linked fund at theend of the policy term.The
Death Benefit will pay the basic Sum Assured on death of the lifeassured during the policy term.
Following payment of this benefit, nofurther premiums are due from the policyholder and the
Extra HealthBenefit will lapse without value.The Extra Health Benefit will pay the basic sum
assured on diagnosis of any one of six critical illnesses during the policy term.
Following payment of this benefit, no further premiums are due from the policyholder and the
Death Benefit will lapse without value. Theillnesses covered under this benefit are cancer,
coronary artery by passgraft surgery, heart attack, kidney failure, major organ transplant
(asrecipient) and stroke.Following a valid death or critical illness claim, we will pay
future premiums on your behalf, as and when they become due. The level of premium will be
that chosen by you at inception of the policy.
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Eligibility
The age and term limits for taking out a Unit Linked Young Star Plan are:(Years)
MinimumTerm MaximumTerm Minimum Ageat Entry Maximum Ageat Entry Maximum Ageat Expiry
Life Option 10 25 18 60 75
Life and health
options
10 25 18 55 65
Surrendering the policyThe policyholder can surrender the policy at any point of time during thecontract term. The
amount payable will be the unitised fund value after applying additional surrender charges
mentioned below.Accessing moneyYou can make lump sum withdrawals from you funds provided the fund balance after
withdrawal and charges does not fall below Rs. 15,000. Theminimum withdrawal amount is Rs.
10,000.
Money Back PlanIt is a participating (with profits) insurance plan that offers the followingfeatures:Payment of cash lump sum, each of which is a proportion of the basic sumassured, at 5-year intervals during the term of thepolicy. (Please refer to thetable given below.)on survival up to maturity, a payment equal to the basic sum assured plusany bonus additions less the cash lump sums paid
earlier is provided.
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In case of the unfortunate deathof the life assured within the term of the policy, the basic sum assured plus any bonus additions
is provided. This is over and above the earlier payouts.This plan helps you plan for future
anticipated expenses by paying periodiccash lump sum to you at regular intervals. This plan also
helps provide for theneeds of your family in your absence by paying them the basic sumassured plus any bonus additions in the event of your unfortunate death during the termof the
policy.BenefitsYou can add the following optional benefits to customise your policy to suityour needs:
Critical Illness(CI) Benefit provides an amount, equal to the sumassured chosen under this optional benefit, on
diagnosis of any one of the 6 common critical illnesses. The sum assured is payable if
yousurvive for 30 days after the date of the claim. Once such a claim has been met, no further
Critical Illness Benefit is payable. However, your basic policy continues even after we pay a
claim on this benefit.Additional Term Benefit(ATB) provides an additional amount, equalto the sum assured chosen under this optional benefit, incase of your unfortunate death.\Accidental Death Benefit(ADB) provides an additional amount equalto the basic sum assured in case you die:- due to an
accident, and- within 90 days of the accident.Waiver Of Premium(WOP) Benefit waives the premium for you incase you become totally disabled. The waiver is
applicable during the period of total disability.All optional benefits must be selected at the outset of
your plan.
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EligibilityThis plan can be taken on a single life basis or a joint life (first claim) basis.The eligibility ages
are as follows:
Basic
policy
Basic policy without option
CI ATB ADB ADB
Min age of entry 12 18 18 18 18
Min age of entry 60 5 60 55 50
Min age of expiry 75 70 75 65 60
SINGLE PREMIUM WHOLE LIFE INSURANCESingle Premium Whole of Life Insurance Plan is well suited to meet your longterm investment
needs. This participating (with profits) plan offers you thefollowingBenefits:A sound investment:Your money will be invested in our With Profits fund. The fund aims to provide secure and
stable long term growth. Normally, we will declare acompound reversionary bonus for your
policy every year and add it to your policy on its anniversary. In addition, on death, surrender
or on the guaranteeddates, a terminal bonus might be payable. You pay a single premium and
the policy will pay you a lump sum.Flexibility of term:Even after choosing your policy, you can decide on the policy term. For 4weeks after any one
of the 10th, 15th, 20th and subsequent five-year anniversaries, you can choose to receive the
sum assured plus any attaching bonuses, in full. Once the money has been received, your policy
will cease.
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Surrender value:You can terminate the policy any time, after it has been in force for at least 6months, and
receive a surrender value.In case of unfortunate death:
Your nominee gets the sum assured secured by your premium, plus anyattaching bonuses. No medical requirements:We do not require you to undergo any medical test for this plan.
EligibilityYou can buy the product on a single life basis.
Minimum age of entry at 18 years
Maximum age of entry 70 years
Tax benefitsT a x b e n e f i t s u n d e r S e c t i o n 8 8 o f t h e i n c o m e T a x A c t a r e a p p l i c a b l
e o n premiums up to 20% of the sum assured.Payment optionsA single premium can be paid by cash, cheque or demand draft
PENSION PLAN The policy is basically a saving contract, which is designed to provide ani n c o m e
f o r l i f e f r o m r e t i r e m e n t , w i t h a n o p t i o n t o t a k e t h e l u m p
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s u m e l s e w h e r e t o b u y t h e a n n u i t y , p r o v id e i t i s p e r m i t t e d b y t h e
prevailingregulations. Your commitment. You agree to pay a single premium or level
premiumsw i t h i n s t a l l m e n t s d u e e v e r y q u a r t e r h a l f -
ye a r o r y e a r t h r o u g h o u t t h e deferment per iod of the pol icy, af ter which youwill start r eceiving your pension. Plan is basically a savings contract, which is designed to provide an incomefor life from
retirement. It does this by accumulating a national lump sumon retirement, comprising
of sum assured plus any attaching bonus.Can I take the national lump sum as cash on
retirement?Subject to the prevailing legislation and regulations, part of this can be taken asa
lump sum and the rest used to buy an immediate annuity.Mode of premiumYou can pay either a single premium or pay premiums is quarterly half yearlyor annual form by
cheque, in cash or by bank drafts.
EligibilityThe age and term limits for looking out a personal pension plan area:
What if I need money?LoansThere is no facility for loans against this contract.
MinimumTerms
MaximumTerm
Maximumage of entry
Maximumageof expiry
Minimum ageof retirement
Maximumage of
retirementRP SP RP SP RP SP
10 5 40 15 18 35 60 50 70
Tax benefitsTax benefits described in Section 80 CC of the income tax act are applicable(up to
Rs. 10,000)
Unit Linked Pension Plan
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The unit linked pension plan is basically an insurance contract, which isdesigned to provide a
retirement income for life.Your premiums are invested in units of the investment fund of your
choice, based on the prevailing unit price. On vesting the value of your units will beused to buy
your retirement benefits.On earlier death, the beneficiary receives the value of your units plus a
cashlump sum of Rs 1000.PremiumsYou agree to pay level premiums regularly, either quarterly, half-yearly or annually, throughout the term of
the policy or a single premium at the start of the policy. The minimum premium amount
for regular premium mode is Rs.10,000 each year and for single premium, it is Rs. 25,000.To
facilitate increased investment, we allow additional single premium top-upsat any time. The
minimum single premium top-up is Rs. 5,000.Premiums can be paid by cash, cheque or demand
draft.
BenefitsAt the chosen vesting date, the unitised fund value will be available to secure pension benefits.
Subject to the prevailing regulations, part of this value can betaken in the form of a cash lump
sum and the rest converted to an annuity atthe rate then offered by HDFC Standard Life.
Alternatively, if it is permitted bythe prevailing regulations, the proceeds net of any cash lump
sum can be usedto buy an annuity with any other insurance company who will
accept such business. The current maximum limit for any cash lump sum is one-third of
theunitised fund value on vesting.
On death the unitised fund value will be paid along with a cash lump sum of Rs. 1,000. The
beneficiary may use the proceeds to purchase pension benefitsfor the surviving spouse.Your basic
benefits will be paid by cheque.EligibilityThe age and term limits for taking out a Unit Linked Pension Plan are:(Years)TAX BENEFITS OF INSURANCE AND PENSION PLAN.Life insurance and retirement plans are effective ways of saving taxes. Thetax b reaks tha t a re ava i lab le under va r iou s insurance and pens ion po l ic ies
a re described below:1.Life insurance plans are eligible for deduction under Sec.
80C.2.Pension plans are eligible for a deduction under Sec. 80CCC.3.Health riders
are eligible for deduction under Sec. 80D.4.T he pr oc ee ds or wi th dr aw al s
of life insurance policies are exemptunder Sec 10(10D), subject to norms prescribed
in that section.
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Tax Rates for IndividualsThe rates of income tax for FY 2005-06 are as follows:Surcharge on Income Tax: In case where the Total Income exceedsRs 10, 00,000, there would
be a surcharge @ 10%. Education Cess on Income Tax: Education Cess @2% will bepayable on theamount of income tax (including surcharge)Premiums paid for Life insurance - Deduction under Section 80C1
Category of assesses allowed deduction : Individual assessee and HinduUndivided Family assessee.2 Eligible Savings : Premiums paid or deposited by assessee to effect or tokeep in force insurance
on the life of following persons:In ca s e of in di vi du al as se ss ee
Hi ms el f/ he rs el f, sp ou se , ch il dr en of su ch individualIn case of HUF assesseeany
member
3. 20% limit: If the amount of premium paid in a financial year for a policy isi n ex ce ss o f
20 % o f th e ac tu al c api ta l s um a ssu red , t hen ded uct ion wil l b e allowed only for
premiums up to 20% of the sum assured.4 Limit on amount of deduction: Deduction will be restricted to investmentsof u p t o Rs
100 ,000 in sav ings spec i f i ed under Sec t ion 80C ( inc lud ing
l if ei n s u r a n c e p r e m i u m s ) . I f a n y i n v e s t m e n t s h a v e b e e n m a d e u n d e r
S e c t i o n 80CCC and 80CCD, then the qualifying amount under Section 80C will
standreduced to that extent.5. Deduction limit: The amount of deduction will be equal to the amount bywhich the
income tax payable on such total income is in excess of the amount by which the total income
exceeds 100,000.Premiums paid for Pension plans - Section 80CCC1 Permitted Deduction : Section 80CCC allows for deduction of premiums paid
under a pension plan. As per this Section, a premium paid up to Rs 10,000 by an individual is
allowed as deduction from his total income.2 Disallowance: This benefit will be reversed if the policy lapses / is cancelled.
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3 Limit:It may be noted that from FY2005-06, th e limit of deduction
under Sec t ion 80C CC wi l l be pa r t o f the overa l l l imi t p resc r ibed under Sec
t i on 80CCE.Premiums paid for medical insurance - Section 80DI) Ca t ego r y o f a s ses see
allowed deduction: Individual assessee and HinduUndivided Family assessee.II)
Eligible premiums: Premiums paid by assessee by cheque out of his taxableincome to effect
or to keep in force an insurance on the health of following persons: In case of
individual assessee Himse lf/herself , spouse, dependantchildren and dependant
parents.In case of HUF assesseeany member of HUFIII) Deduction and upper limit:
The qualifying amounts under Section 80D isup to Rs 10,000/-. However, a higher
amount of up to Rs 15,000/- is permittedif the person, for whose health insurance the
premium was paid, was aged 65years or more at any time during the financial year in which
the premium was paid. Such amounts of premium paid would be allowed as deduction from
thetotal income of the assessee.Overall deduction limit - Section 80CCEA new Section 80CCE is
proposed to be inserted from FY2005-06. As per thissection, the maximum amount of
deduction that an assessee can claim under Sections 80C, 80CCC and 80CCD will belimited to Rs 100,000.Benefits under insurance policy - Section 10(10D)As per Section
10(10D) of Income tax Act, 1961, any sum received under a lifeinsurance policy, including the
sum allocated by way of bonus on such policyis exempt from tax. However, this rule does not
apply to following amounts:Sum received under Section 80DD (3), or
Any sum received under a Key man Insurance Policy, or
Any sum received other than as death benefit under an insurance policywhich has been issued on or after
April 1 2003 and if the premium paid inany of the years during the term of the policy is more than 20% of
the sumassured.Rebate in respect of Securities Transaction Tax (STT) paid1Section 88Ehas been introduced by Finance Act (No 2) of 2004.2 As per the provisions, where total income
of an assessee includes any incomeunder the head Profits and Gains from Business or
Profession arising f romtaxab le s ecur i t i e s t r ansac t ions , he sha l l be en t i t l ed
to a deduction from theincome tax on such income.3 Amount of deduction: Amount
of STT paid in respect of taxable securitiestransactions entered into in the course
of business during that previous year 4 The deduction will be allowed if proof of payment ofSTT is furnished alongwith the return. The proof has to be furnished as per the format
prescribed byIncome Tax.5 Maximum deductions shall be equal to the amount of
income tax on aboveincome
COMPARITIVE ANALYSISCONTENTS53
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1.HDFC PENSION-II VS BIRLA FLEXI SECURELIFE RETIREMENT2.HDFC
PENSION-II VS BAJAJ ALLIANZ UNIT GAIN3.H DF C PE NS IO N I I VS LIC
BIMAPLUS
RESEARCH METHODOLOGYSTUDYThe present investigation is a descriptive type of study undertaken to estimatethe comparative
study pension plan of HDFC SLIC, BIRLA SUN LIFE,BAJAJ ALLIANZ, LIC.SAMPLE SIZE57
For the purpose of analysis a sample size of different companies were selected.The sample size
taken was 4.SAMPLING METHODThe sampling method used for the project was Random Sampling. This typeof sampling is also
known as probability sampling where each and every itemin the population has an equal chance
of inclusion in the sample and each oneof the possible samples. This procedure gives each item
an equal probability of being selected.DATA COLLECTIONSECONDARY DATAThe secondary data was collected by referring through web sites, and the finaldata was analyzed
systematically to achieve the desired result.DATA ANALYSIS AND INTERPRETATIONAfter analyzing the data above in the table we came to the followinginterpretation. Interpretation
has been done on the basis of the featuresmentioned in the table.1.AGE AND TERM OF POLICY: Since the minimum age is minimumin BAJAJ ALLIANZ andthe term depends on the customer. Thecustomer has probability of getting the maximum
returns (all other things being equal). And HDFC is offering investment for maximum 30years
which is rated as second best in this feature.
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2.SWITHCHES: After analyzing the feature the conclusion drawn is thatHDFC is offering the
most switches in the year.3.CHARGES :The charges levied on the policy of the insurer is lowest inHDFC SLIC like FMC, PAC,
but initial charge is second lowest which isalso not bad in terms of investment.4.WITHDRAWALS :Withdrawals not allowed in HDFC SLIC & BIRLASUN LIFE because
if withdrawals are there plan would not yield goodreturn.5.INVESTMENT OPTIONS :HDFC SLIC provides you the maximumfunds for investment
(Balanced fund, Defensive Managed fund, SafeManaged fund, Liquid fund & Growth fund).
So HDFC SLIC providesyou better portfolio to diversify your funds which reduces the risk
andmaximizes the return.6.TOP UP :In HDFC SLIC the minimum top up is of RS 5000 with nocharges levied but in others
it is Rs 10000. Here we could see that people with low income can increase the premium with
small amount.7.
BONUS UNITOnly two firms are offering bonus unit to the customer and they are HDFC SLIC
and LIC.8.FLEXIBLE CONTRIBUTION :This feature is available in HDFCSLIC where a customer can
increase or decrease its premium, but onlyBajaj Allianz is offering an increase option only.
RECOMMENDATIONS1.Premium allocation charge (initial charge) should be reduced to providecustomer
with better return.2.Policy administration charge should be reduced to gain more
advantagein the market.3.Surrender charges should be reduced. CONCLUSION
Based on comparative study HDFC SLIC is on the upper side in the privatelife insurance
companies in comparison to Birla sun life, Bajaj Allianz.
HDFC SLIC based on the comparative study has many advantage in thissegment of
product l ike fund management charge, switches facili ty andmaximum number of
investment funds in offering (i.e., 5 namely Balancedfund, Defensive Managed fund, Safe
Managed fund, Liquid fund & Growthfund ) but the res t of the insurance pla yer that is
LIC , Birla sun li fe, Baja jAllianz are also not far behind HDFC SLIC.
BIBLOGRAPHY
WWW.HDFCINSURANCE.COMwww.irda.com
www.LICindia.comwww.birlasunlife.com
WWW.GOOGLE.COM
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.irda.com/http://www.irda.com/http://www.licindia.com/http://www.licindia.com/http://www.birlasunlife.com/http://www.birlasunlife.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.birlasunlife.com/http://www.licindia.com/http://www.irda.com/http://www.hdfcinsurance.com/ -
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