PROJECT REPORTON

Recruitment of Financial ConsultantHDFC Standard life Insurance

Submitted in partial fulfillment of the requirement ofMasters of Business Administration (MBA)

Training Supervisor Project Supervisor Mr.Sudarshan Kapoor Mrs.Rupa Rathee

Submitted By:ANSHU LOCHAB

SESSION: 2007-2009

HINDU INTSTITUTE OF MANAGEMENT, SONEPAT.

AFFILIATED TO MAHARISHI DAYANAND UNIVERSITY,ROHTAK (HARYANA)

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ACKNOWLEDGEMENT

The making of a report does not involve efforts of one single person. It is possible

only because of cooperation and contribution of many minds. Several eminent

people at HDFC STANDARD life insurance have made valuable contributions to

this report through their inputs. I am thankful to each one of them.

I am extremely thankful to Mr.SUDARSHAN KAPOOR, (Unit Advisor) for

giving me an opportunity to undergo training in HDFC STANDARD LIFE

INSURANCE and making my stay at HDFC STANDARD a memorable learning

experience.

In these two months, I have been given a very valuable insight into the working

of industry in general, which will go a long way in shaping my career.

I extend my sincere thanks to Mrs. RUPA RATHEE(Faculty, Hindu InstituteOf

Management) for the amount of guidance extended to me in the form of

continuous feedbacks and what process to follow to make this research work a

success.

Lastly I would also like to thank the whole HDFC STANDARD LIFE

INSURANCE, who treated me like one of them and offered me valuable support

and guidance and facilitated this experience of mine for which I am so grateful.

(ANSHU LOCHAB)

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TABLE OF CONTENTS

CHAPTER NO. CONTENTS

CHAPTER 1 INTRODUCTION

CHAPTER 2 COMPANY’S PROFILE

CHAPTER 3 RECRUITMENTPROCESS

CHAPTER 4 DATA ANALYSIS

CHAPTER 5 CONCLUSION &SUGGESTIONS

CHAPTER 6 ANNEXURE

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EXECUTIVE SUMMARY

Insurance in India used to be tightly regulated and monopolized by

state-run insurers. Following the move towards economic reform in

the early 1990s, various plans to revamp the sector finally resulted in

the passage of the Insurance Regulatory and Development Authority

(IRDA) Act of 1999. Significantly, the insurance business was

opened on two fronts. Firstly, domestic private-sector companies were

permitted to enter both life and non-life insurance business. Secondly,

foreign companies were allowed to participate, albeit with a cap on

shareholding at 26%. With the introduction of the 1999 IRDA Act,

the insurance sector joined a set of other economic sectors on the

growth march.

During the 2003 financial year, life insurance premiums increased by

an estimated 12.3% in real terms to INR 650 billion (USD 14 billion)

while non-life insurance premiums rose 12.2% to INR 178 billion

(USD 3.8 billion). The strong growth in 2003 did not come in

isolation. Growth in insurance premiums has been averaging at 11.3%

in real terms over the last decade.

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INTRODUCTION TO THE PEOJECT

Not with standing the rapid growth of the sector over the last decade,

insurance in India remains at an early stage of development. At the

end of 2003, the Indian insurance market (in terms of premium

volume) was the 19th largest in the world, only slightly bigger than

that of Denmark and comparable to that of Ireland. This was despite

India being the second most populous country in the world as well as

the 12th largest economy. Yet, there are strong arguments in favors of

sustained rapid insurance business growth in the coming years,

including India’s robust economic growth prospects and the nation’s

high savings rates.

The dynamic growth of insurance buying is partly affected by the

(changing) income elasticity of insurance demand. It has been shown

that insurance penetration and per capita income have a strong non-

linear relationship. Based on this relation and other considerations, it

can be postulated that by 2014 the penetration of life insurance in

India will increase to 4.4% and that of non-life insurance to 0.9%.

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INDIA IN THE INTERNATIONAL CONTEXT

The Indian insurance market is the 19th largest globally and ranks 5th

in Asia, after Japan, South Korea, China and Taiwan. In 2003, total

gross premiums collected amount to USD 17.3 billion, representing

just under 0.6% of world premiums. Similar to the pattern observed in

other regional markets, and reflecting the country’s high savings rate,

life insurance business accounted for 78.5% of total gross premiums

collected in the year, against 21.5% for non-life insurance business.

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SIGNIFICANCE OF THE STUDY

For the generation of insurance seekers who thrived on insurance policies

with assured returns issued by a single public sector enterprise, unit-linked

insurance plans are a revelation.

Traditionally insurance products have been associated with attractive returns

coupled with tax benefits. The returns part was often so compelling that

insurance products competed with investment products for a place in the

investor’s portfolio.

Perhaps insurance policies then were symbolic of the times when high

interest rates and the absence of a rational risk-return trade-off were the

norms.

The subsequent softening of interest rates introduced a degree a much-

needed rationality to insurance products like endowment plans; attractive

returns at low risk became a thing of the past. The same period also

coincided with an upturn in equity markets and the emergence of a new

breed of market-linked insurance products like ULIPs.

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FOCUS OF STUDY

Insurance companies work on illustrations. They are allowed to show you

how much your annual premium will be worth if it grew at 10 per cent per

annum. But there are costs, so each company also gives a post-cost return at

the 10 per cent illustration, calling it the yield.

For us, the most startling discovery was that some companies were not

including the mortality cost while calculating the yield. This amounts to

overstating the yield. We have done the calculations ourselves and then

calculated the yield for this ranking.

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REGULATORY REGIME

After the release of the Malhotra Committee report in 1994, changes

in the insurance industry appeared imminent. Unfortunately, changes

in the central government slowed down the process. The dramatic

climax came on 7 December 1999 when the government finally

passed the Insurance Regulatory and Development Authority (IRDA)

Act. This Act repealed the monopoly conferred to the Life Insurance

Corporation in 1956 and to the General Insurance Corporation in

1972. The authority created by the Act is called the Insurance

Regulatory and Development Authority (IRDA). Table 1.2 below

summarizes some of the milestones in India’s insurance regulation.

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FEATURES OF THE 1999 IRDA ACT

The Insurance Regulatory and Development Act of 1999 set out “to

provide for the establishment of an Authority to protect the interests

of holders of insurance policies, to regulate, promote and ensure

orderly growth of the insurance industry and for matters connected

therewith or incidental thereto and further to amend the Insurance

Act, 1938, the Life Insurance Corporation Act, 1956, and the General

Insurance Business (Nationalization) Act, 1972.” The Act effectively

reinstituted the Insurance Act of 1938 with (marginal) modifications.

Whatever was not explicitly mentioned in the 1999 Act referred back

to the 1938 Act. The salient features of the 1999 IRDA Act are

discussed below:

LICENSING

The IRDA Act, 1999, sets out details of registration of an insurance

company along with renewal requirements. The minimum capital

requirement for direct non-life and life insurance business is 100

crores (i.e. INR 1 billion). The IRDA regulates the entry and exit of

players, capital norms, and maintains a strict watch on the equity and

solvency situation of insurers. Should an application be rejected, the

applicant will have to wait for a minimum of two years to make

another proposal, which will have to be with a new set of promoters

and for a different class of business.

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For renewal, it stipulates a fee of one-fifth of one percent of total

gross premiums written direct by an insurer in India during the

financial year proceeding the renewal year. It also seeks to give a

detailed background for each of the following key personnel: chief

executive, chief marketing officer, appointed actuary, chief

investment officer, chief of internal audit and chief finance officer.

Details of the sales force, activities in rural business and projected

values of each line of business are also required. Further, the Act sets

out the reinsurance requirement for (general) insurance business. For

all general insurance a compulsory cession of 20%, regardless of the

line of business, to the General Insurance Corporation (the designated

national reinsurer) is stipulated.

Currently, India allows foreign insurers to enter the market in the

form of a joint venture with a local partner, while holding no more

than 26% of the company’s shares. Compared to the other regional

markets, India has more stringent restrictions on foreign access.

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Review of literature:

Insurance has always been a politically sensitive subject in India.

Within less than 10 years of independence, the Indian government

nationalized private insurance companies in 1956 to bring this vital

sector under government control to raise much needed development

funds.

The Indian insurance industry was dominated by LIC in life insurance

and GIC in general insurance. But now the insurance sector in India

has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again tracing the

development in the Indian insurance sector reveals the 360 degree

turn witnessed over a period of almost two centuries.

For recruitment of process of an insurance advisor in HDFC Standard

life insurance company there is some qualities that have to fulfill by

and prospect candidate.

I think that people who have ample knowledge about insurance

product and have good communication skill are most suitable for the

Insurance Advisor.

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OBJECTIVE:

The project undertakes was precisely about the development of the

channel of the company i.e. Recruitment of the advisors of the

organization who further brings in the business to it.

The other main objectives of the research done for the company were:

1) To find the perception of the people about the company,

2) To check the job satisfaction level of the financial consultents of

the HDFC-SLIC

3) To undertstand the recruitment system used in the selection

process.

4) To know the satisfaction of employees about the given

commission rate.

5) To rank the training sessions given to employees by HDFC-SLIC.

6) To know the work of financial consultents in HDFC-SLIC.

7) To get the suggestions of financial consultants regarding the

improvement of recruitment system.

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RESEARCH METHODOLOGY

SOURCES:

The main source of data can be categorized into the following 2 ways.

1. PRIMARY DATA

2. SECONDARY DATA

Primary data - Primary data is facts and information collected

specifically for the purpose of the investigation at hand. Information

that researchers gather first hand. The analyst can obtain primary data

through the process of direct observation or by explicit questioning of

people.

Primary data has mainly been collected from questionnaire method

by conducting personal visit.

Secondary data:

Secondary data is mainly collected through internet, magazines and

reports of the HDFC Standard Life Insurance.

STATISTICAL TOOLS:- pie charts bar representation of data are used

in representation of data.

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COMPANY PROFILE

HDFC STANDARD LIFE INSURANCE COMPANY

LIMITED

The Partnership:

HDFC Standard Life first came together for a possible joint venture,

to enter the Life Insurance market, in January 1995. It was clear from

the outset that both companies shared similar values and beliefs and a

strong relationship quickly formed. In October 1995 the companies

signed a 3 year joint venture agreement.

Around this time Standard Life purchased a 5% stake in HDFC,

further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in

government and ongoing delays in getting the IRDA (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

additional resource made available. Around this time Standard Life

purchased 2% of Infrastructure Development Finance Company Ltd.

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(IDFC). Standard Life also started to use the services of the HDFC

Treasury department to advise them upon 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 next level. 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.Around this time Standard Life

purchased a further 5% stake in HDFC and a 5% stake in HDFC

Bank.

In a further development Standard Life agreed to participate in the

Asset Management Company promoted by HDFC to enter the mutual

fund market. The Mutual Fund was launched on 20th July 2000.

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INCORPORATION OF HDFC STANDARD LIFE

INSURANCE COMPANY LIMITED

The company was incorporated on 14th August 2000 under the name

of HDFC Standard Life Insurance Company Limited.

Their ambition from the beginning was to be the first private

company 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 first life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with

81.4%, while Standard Life owns 18.6%. Given Standard Life's

existing investment in the HDFC Group, this is the maximum

investment allowed under current regulations. HDFC and Standard

Life have a long and close relationship built upon shared values and

trust. The ambition of HDFC Standard Life is to mirror the success of

the parent companies and be the yardstick by which all other

insurance companies in India are measured.

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THEIR MISSION (AS STATED IN THE COMPANY'S

WEBSITE ):

To be the top new life insurance company in the market. This does

not just mean being the largest or the most productive company in the

market, rather it is a combination of several things like:

 Customer service of the highest order 

 Value for money for customers 

 Professionalism in carrying out business 

 Innovative products to cater to different needs of different

customers 

 Use of technology to improve service standards 

 Increasing market share 

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THEIR VALUES

SECURITY: Providing long term financial security to our

policy holders will be our constant endeavor. We will be do this by

offering life insurance and pension products.

TRUST: We appreciate the trust placed by our policy holders in

us. Hence, we will aim to manage their investments very carefully

and live up to this trust. 

INNOVATION: Recognizing the different needs of our

customers, we will be offering a range of innovative products to meet

these needs. 

Their mission is to be the best new life insurance company in India

and these are the values that will guide them in this.

 

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OUR KEY STRENGTHS

FINANCIAL EXPERTISE:

As a joint venture of leading financial services groups, HDFC

Standard Life has the financial expertise required to manage your

long-term investments safely and efficiently.

RANGE OF SOLUTIONS :

We have a range of individual and group solutions, which can be

easily customized to specific needs. Our group solutions have been

designed to offer you complete flexibility combined with a low

charging structure.

TRACK RECORD SO FAR

Our gross premium income, for the year ending March 31, 2007 stood

at Rs. 2, 856 crores and new business premium income at Rs. 1,624

crores.

The company has covered over 8, 77,000 lives year ending

March 31, 2007.

HDFC Standard Life is one of the leading life insurance companies

having a track record of declaring bonuses every year since inception.

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We attribute this success to our people, who are our most important

asset. We believe they are a key facet of the company and it is their

contribution that has enabled us to achieve our current status. Since

they deserve the best, our efforts have been to provide them with the

best environment, best culture and best development opportunities

possible.

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PRODUCT PROFILE

1. Protection Plans

2. Savings Plans

3. Child Plans

4. Investment Plans

5. Retirement Plans

6. Group Plans

7. Rural Plans

8. Plans for NRIs

9. Key man Plans

10. Riders

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HDFC GROUP PLANS

This group coverage plan is for a specified group of people, providing

insurance for one year. In case of death of a member the amount is

paid to the beneficiary of the member.   

Eligibility & Payment Of Premiums :

Members of a development agency (together with their spouses),

between the ages 18-50 yrs are eligible. The development agency

must have at least 500 members. But the employees of the agency

group are not eligible for coverage. 

Premiums will be same (per member) for the entire group. The

premiums will have to be paid by the agency for all the members in a

specified format. 

In case of death of the group member the sum assured will be paid to

the beneficiary. In case of death due to accident, additional sum of

50% of sum assured is also paid. Nothing is payable in case of

survival of the member at the end of the year. 

HDFC insurance gives mortality rebate (at its discretion), which is

calculated separately for groups. This rebate will be a proportion of

excess (if any) premiums paid over the claims (after deducting

administrative costs).in case of deficit, HDFC bears the gap& no

rebate will be given.   The development agency is expected to

perform certain tasks like collecting data, noting down changes,

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paying the premiums, disbursement of claims etc. The agency will be

trained and also will be paid a premium rebate.(subject to fulfillment

of criterion laid down by HDFC insurance).

HDFC PLANS

1)     Endowment Assurance Plans:  

HDFC ins. offers various types of endowment assurance plans. Under

endowment assurance the amount (sum assured) is paid with bonus (if

any) when the policy matures or in case of premature death of the

policyholder during the term of the policy.

Types of Endowment Assurance Plans:

A) Classic plan: here only basic sum assured with bonus (if

any) alone is paid. 

B) Value plan A: in this case double the sum assured is paid in case

of death of the policyholder.  

C) Value plan B: under this plan, apart from double the sum assured

coverage in case of natural death, accidental death benefit is also

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provided. In case of death due to accident, double the sum assured is

paid.  

D) Value plan C: this type provides basic sum assured assurance and

also waiver of premium facility. Premiums are waived in case of total

disability & for the period of total disability.  

E) Value plan D: three benefits basic sum assured protection, waiver

of premium in case of total disability and accidental death benefit are

offered under plan D.  

F) Value plan E: apart from basic sum assured and waiver of

premiums in case of total disability, this plan also covers specified

critical illnesses (for basic sum assured).  

Flexi- Plan:

A choice is given to design ones own policy, in consultation with a

financial consultant where one can add any of the 4 additional

benefits double sum assured, accident death benefit, waiver of

premiums, critical illness.   

Age groups covered:  

For classic plan: 12-60 yrs (max. age at maturity 75 yrs.)  

Value plan a: 18-60 yrs (max. age at maturity 75 yrs.)  

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Value plan b: 18-55 yrs (max. age at maturity 65 yrs.)  

Value plans c, d, e: 18-50 yrs. (max. age at maturity 60 yrs.)

 

Term for all endowment plans:  

Min term: 10 years. 

Max term: 30 yrs. 

Payment Options-  

Yearly, half yearly or quarterly for all plans.  

HDFC Money back Plans: 

HDFC Money back plans pay cash lump sum in proportion to the

basic sum assured. This cash lump sum is paid once in every 5yrs.on

maturity the basic sum assured minus the cash lump sum amounts

paid in between is paid together with bonus if any. If a policyholder

expires during the term of the policy, full sum assured (without

deducting) any paid lump sum amounts is paid (with bonus if any).  

Schedule of Lump sum Amounts:  

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The schedule of lump sum amounts depends on the term of the policy.

A choice of 5 terms is available --- 10, 15, 20, 25, 30 yrs  

10 yr policy: 40% of sum assured is paid after 5 years. The balance

60% is paid at the time of maturity (with bonus).  

15 yr policy: two installments of 30% is paid at the end of 10 yrs

and 15 yrs respectively. The balance 60% is paid at the time of

maturity (with bonus any).  

20 yr policy: 3 installments of 20% of sum assured are paid at the

end of 5,10 and 15 yrs. The balance sum assured of 40% is paid at the

time of maturity (with bonus if any) 

25 yr policy: 4 installments of 20% of sum assured, lump sum

amounts are paid at the end of 5,10,15,20 yrs. The balance 20% is

paid at the time of maturity (with bonus, if any).  

30 yr policy: 5 installments of 15% of sum assured are paid as lump

sum amounts at the end of 5,10,15,20,25 yrs .the balance 25% is paid

at the time of maturity (with bonus, if any.)

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DIFFERENT PRODUCTS OF MONEYBACK

PLANS

After choosing the term (no. Of yrs), a person can also choose from

several variants of money back plans. They are 

1) Classic plan: only basic sum assured is paid at the time of pre

mature death of the policyholder.  

2) Value plan A: in case of premature death of the policy holder

additional sum assured equivalent to basic sum assured is paid. For

calculating lump sum amounts, only the basic sum assured is

considered.  

3) Value Plan B: under this plan double the sum assured is paid in

case of premature ordinary death, and also premature death due to

accident. Lump sum amounts are calculated for basic sum assured

only.  

4) Value plan c: the risk is covered for basic premiums.

Additionally, in case of total disablement, further premiums are

waived during the period of total disablement.  

5) Value plan d: double the sum assured protection in case of

premature death is provided. Also waiver of premiums in case of total

disablement, for the period of disablement facility is given. But lump

sum payments are calculated for basic sum assured only.    

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6) Value plan e: certain critical illnesses are covered under this

plan. The risk is covered for basic sum assured. But waiver of

premiums facility is given (in case of total disablement, during the

period of disablement).  

Flexi Plan  

A choice is given to design a plan of ones own choice, in

consultation with a financial consultant. Where one can add any of

the additional benefits (4) - double sum assured, accidental death

benefit, waiver of premiums and critical illness.

AGE GROUPS COVERED:  

Classic plan: 12 60 yrs.

Value plan a: 18-60 yrs.

Value plan b: 18-55 yrs.

Value plans c, d, e: 18-50 yrs.  

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TERM FOR MONEY BACK PLANS: 

Min term for all polices: 10 yrs.

Max term for all polices: 30 yrs.  

Payment Options: 

Yearly, half yearly or quarterly for all the plans.  

THE INVESTMENT FUNDS AVAILABLE

HDFC Stand.. Market Return Fund unit-linked insurance plan offers

four tailored investment funds.

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Working:

The premium made net of Premium Allocation Charges by the

Individual is invested in fund/funds of choice and units are allocated

depending on the price of units for the fund/funds.

The value of Unit Account is the total value of units that hold in the

fund/funds. The Mortality Charges and Policy Administration

Charges are deducted through cancellation of units whereas the Fund

Management Charge is priced in the unit value

Capital Secure Fund :

This fund offers steady returns for very little risk. Your funds are

invested 100% in bank deposits, government bonds and debt

instruments that offer financial security.

Balanced Fund :

In this fund, a major portion of your funds are invested in fixed

securities while a small percentage is invested in the equity market

which is exposed to market movements.

Growth Fund :

This fund offers a greater portion of investment in the equity market.

The greater exposure to the equity market means that returns will be

higher, but with the attendant higher level of risk.

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Equity Fund :

This fund offers a totally equity based investment option. Your

returns depend entirely upon the performance of thequity.The higher

risk of this portfolio means that expected returns will also be higher.

The allocation of assets and the risk and return levels for

each investment fund are given in the table below:

Fund Type

Time Horizon

Risk Level

Level of Returns

Asset Allocation

Fixed Interest Securities Not less than

EquitiesNot more than

Capital Secure

Short Low Low 100% 0%

Balanced

Medium

Low-Medium

Medium

80% 20%

Growth LongMedium-high

Medium

60% 40%

Equity Long High Hign 0% 100%

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What are units?

The premiums you pay are invested into the funds according to your choice. Your

investment is expressed in terms of units, the value of which varies according to

the performance of the funds. Unit prices are calculated regularly for each fund

using the following formula:

Unit

Pric

e

Total market value of assets plus current

assets less current liabilities less provisions

Total number of units on issue

When you pay premiums, we will allocate your units using the next

following unit price that we determine.

When we pay you benefits, we will cancel units at the next available

unit price.

The market value of assets is arrived at based on the information from

stock exchanges, financial institutions and market makers.

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Premium Payment Options

Single Premium

Minimum Rs 25,000

Regular Premium

Minimum Installments

     Annual Rs 10,000

     Half

YearlyRs 5,000

     Quarterly Rs 2,500

     MonthlyRs 1,250 (for salary deduction

only)

 Rs 2,500 (standing order/credit

card)

Top-up Premium

Minimum Rs 2,500

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Regular Premium

You can select a regular payment mode of your choice to build up

your unit account. Such regular payments continue till the maturity

date of the policy. We will invest your premiums in the investment

funds of your choice in the proportions that you specify subject to

regulatory norms. Under current regulations, you may invest up to a

maximum of 20% of your premiums into the Capital Secure Fund at

the commencement of your policy.

Single Premium:

Account with a single premium payment of Rs 25,000 or more. The

invest premiums in the investment funds choice in the proportions

that specify subject to regulatory norms. Under current regulations,

we may invest up to a maximum of 20% of the premium into the

Capital Secure Fund at the commencement of policy.

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Top-up Premiums:

When you have additional funds, you can enhance your unit account

with top-up premiums of Rs 2,500 or more. You may make top-ups

on your regular or single premium policy at any time to further build

your portfolio. These top-ups do not affect your sum insured; they

simply increase your investment in the funds.

Redirections are free of cost:

At any point you can redirect your premiums to other investment

funds. Once your requisition reaches us, your future premium

payments will be redirected to the investment fund/s of your choice.

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Withdrawls:

No. of partial withdrawals per year for

regular/single premium options 2

Minimum period the policy should be

in

force for partial withdrawals1 year

Minimum unit account balance after

each withdrawal

Rs

10,00

0

The withdrawal option provides you with the right amount of liquidity

such that you can draw from your unit account without disturbing the

insurance cover you enjoy. Once the policy is in force for at least a

year, you can make partial

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Regular Premium:

Minimum Sum

Insured

Up to

age 12

5 times annualized

premium or Rs 5,00,000,

whichever is lower

Above

age 12

5 times annualized

premium

Maximum

Sum Insured

Up to

age 12Rs 5,00,000

Above

age 12None

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Single Premium :

Minimum Sum

Insured

Up to

age 12

110% of single premium

or Rs 5,00,000,

whichever is lower

Above

age 12110% of single premium

Maximum

Sum Insured

Up to

age 12Rs 5,00,000

Above

age 12None

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Death benefits available:

If the life insured dies before the maturity date, the policy

holder/beneficiary will receive the full value of the unit account or the

sum insured whichever is higher. The advantage in this policy is that

we recalculate your insurance charge each month, so as your unit

account grows in value, your insurance charge reduces. That is, you

only pay insurance charges for the decreasing sum at risk as is shown

in the graph below.

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Suicide Clause:

If the life insured, whether sane or insane, commits suicide within 12

months from the date of commencement of this policy we will limit

the death benefit to the value of your unit account. Insured benefits

are not paid in this case.

Can you change the sum insured:

Reducing

the sum insured

Minimum as specified

in table below

Increasing

the sum insured

Subject to underwriting

Requirements

Minimum Sum

Insured

---Regular

Premium

Up to

age

12

5 times annualized

premium or Rs 5,00,000,

whichever is lower

Above

age

12

5 times

annualized premium

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You may increase your sum insured on the basis of continued good

health and our terms and conditions applicable at that time. What are

the additional benefit options? If you wish to enjoy additional

insurance benefits, You may select the Accidental Death and Total

and Permanent Disablement Benefit rider that this policy offers, for

regular premium payment option.

ACCIDENTAL DEATH AND TOTAL AND PERMANENT

DISABLEMENT BENEFIT

This benefit doubles the life coverage in case of death or permanent

total disability due to an accident at a very nominal additional cost.

The maximum cover offered is Rs 50,00,000. In case of total and

permanent disability, 1/10th of the sum insured will be paid at the end

of each year for ten years. If the total and permanent disability benefit

has commenced, then the accident cover will cease.

In case of maturity or on death of the life assured, after the payment

of any installments of the permanent and total disability benefit, the

remaining unpaid installments, if any, will be paid in one lump sum.

Total and permanent disability means disability caused by bodily

injury which causes permanent inability to perform any occupation or

to engage in any activities for remuneration or profits. This disability

should last for at least 6 months before being eligible for total and

permanent disability benefits. Total and permanent disability also

includes the loss of both arms and both legs or one arm and one leg,

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or of both eyes. By loss of arms or legs we mean dismemberment by

amputation of the entire hand or foot. Loss of eyes means entire and

irrecoverable loss of sight.

Exclusions:

HDFC Standard Life Insurance will not be liable to pay any

accidental death benefit claim or total and permanent disability

benefit claim which results directly or indirectly from any one or

more or the following:

• An act or attempted act of self-injury.

• Participation in any criminal or illegal acts.

• Being under the influence of alcohol or drugs.

• Racing or practicing racing of any kind other than on foot.

• Flying or attempting to fly in, or using or attempting to use, an

aerial device of any description, other than as a fare paying passenger

on a recognized airline or charter service. Participating in any riot,

strike or civil commotion, active military, naval, air force, police or

similar service, War, invasion, act of foreign enemies, hostilities or

war like operations (whether war be declared or not), civil war,

mutiny, military rising, insurrection, rebellion, military or usurped

power or any act of terrorism.

-44-

Your Unit Account

The following diagram shows that your premiums and investment

earnings are used to purchase units, which are directed to your unit

account. Any charges or benefits are paid out by converting your units

into cash once again.

-45-

-46-

Charges applied:

Allocation fee

Regu

lar

Premiu

m

Term of

Policy (years)

Year 5-9 10-14 15+

First Year 10% 15% 20%

Thereafter5% 5% 5%

These are applied to the premiums

   

Singl

e

Premiu

m &

top-

ups

The allocation fee is 2% of the

premium/contribution amount.

Insurance

Charges

This is

based on

-47-

your attained age and is

deducted

at the beginning of each month.

Investm

ent

charges

Unit-Linked

Fund

Annual

Rate*

Capital Secure 1.50%

Balanced 1.50%

Growth 1.75%

Equity 1.75%

The investment charges are

deducted on a daily basis.

-48-

Tax benefits:

Premium, net of health related benefit (eg. Critical Illness) premium

paid, up to a maximum of 20% of the sum assured will be eligible for

income tax rebate under section 80C. Provided, the premium in any of

the years during the policy term does not exceed 20% of the sum

assured, your death, maturity and withdrawal benefits are eligible for

tax relief under section 10 (10D). Please consult your tax consultant

for further details.

Also remember that if the policy lapses or you terminate the policy

before you have paid premium for two years in case of a regular

premium plan or two years have elapsed in case of a single premium

plan, the tax benefits availed shall be deemed to be tax payable. To

take advantage of the current tax benefits, we recommend the

following sums assured. Please remember that these limits are not

binding and you may choose other alternatives.

-49-

Prohibition of rebates:

Section 41 of the Insurance Act, 1938 states:

1. No person shall allow or offer to allow either directly or indirectly,

as an inducement to any person to take out or renew or continue an

insurance in respect of any kind of risk relating to lives or property in

India, any rebate of the whole or part of the commission payable or

any rebate of the premium or continuing a policy accept any rebate,

except such rebate as may be allowed in accordance with the

published prospectuses or tables of the insurer.

2. Any person making default in complying with the provisions of this

section shall be punishable with fine which may extend to five

hundred rupees Insurance is the subject matter of solicitation

-50-

COLLABORATION OF INDIAN COMPANIES WITH

FOREIGN COMPANIES AND THEIR MARKET SHARE

Bajaj Allianz Life Insurance AMP Sanmar Life Insurance

Aviva Life Insurance HDFC Standard Life

Insurance

Birla Sun Life Insurance ICICI Prudential Life

Insurance

Max New York Life Insurance Metlife Indian Insurance

Reliance Life Insurance Shiram Life Insurance

Tata AIG Life Insurance SBI Life Insurance

Bharti AXA Life Insurance ING Vysya Life Insurance

Sahara Life Insurance Kotak Mahindra Insurance

General Insurance

Corporation Of India

Royal Sundaram Insurance

Canara HSBC

OBC Life Insurance

MARKET SHARE OF MAJOR PLAYERS

-51-

FINDINGS ON THE BASIS OF SWOT ANALSIS

-52-

STRENGTH:

• HDFC Standard life Insurance is the largest private player in

the insurance industry in India

• Excellent services.

• Customization of products as per customer’s needs.

• Brand image.

• Business experience.

• Strong financial base.

• Innovative products, Technology, Organization culture &

climate.

• The company has a large network of branches, which is helpful

to customer for the payment.

-53-

WEAKNESSES :

• Lot of competitors are in the market offer same product offered

by the difference in the premium & offering.

• Target only higher income group where as other companies are

trying to catch middle-class people.

• Higher premium as compared to other companies.

• Clients face problems to get insured due to large number of

formalities.

• High targets for financial advisors & for the sale department.

OPPORTUNITIES:

-54-

 

Huge market is literally untapped. Out of estimated 320 million

insurable markets only 20% of the population is insured.

In a conservative society of India where people are most

inclined towards risk free investments such as Bank FD’s &

savings rather than equity & high risk investment insurance

offers the best of both words – The security with high returns.

In the pension field where people want good life after their

retirement.

Indian people are more emotional towards their child that’s

why children plans are selling like hot cakes.

Health insurance & pension schemes as estimated market

potential of approximately $15.

THREATS:

-55-

Weak perceptions of private players in the mind of Indian

people due to frequent financial scams.

Large number of insurance players.

Existing wrong business practices of companies like their

agents pay LIC first premium where as IRDA suggests that

even forms to be filled by the clients themselves.

Players like Bajaj Allianz & Birla Sun Life with low premiums

for the similar plans.

Entry of many other private companies with equally strong

experience & financial strength of foreign partners making the

competition difficult & saturating the urban markets.

LIC has woken up from sleep & is following competitive

strategies. Its huge surplus in the life fund gives a capability to

lodge price war.

For the insurance sector Govt. set the authority that is IRDA

which is undertaken to track record of all the companies &

change the rules day by day more rigid, which is very difficult

for the companies.

IRDA CONDUCT THE TRAINING OF INSURANCE ADVISOR.

-56-

As far as licensing an individual is concerned, the following

documents would be required :

Checklist

Age proof

Education proof

Address proof

Agency application

Form VA

8 photograph- all one kind- recent, clear colored only with

name written behind each photo

FINANCIAL CONSULTANT AND THEIR JOB

RESPONSIBILITY

-57-

Financial Consultant:

Financial consultant provides analysis and guidance to businesses and

individuals to help them with their investment decisions. They act as

an representative for the company so as to develop the channel &

bring business for the company. They sell different types of insurance

policies, for a single insurance company, in return for a commission.

Depending on the type of work they perform they are paid a salary, a

salary plus commission, or only commission.  He is also called an

insurance broker in some instances and may work with different

companies depending on their area of expertise and coverage.

-58-

Job Responsibility:

His / her job his is to find local doable customers to determine

their needs and help them in getting insured.

Delivering the insurance policy to the respective customers

upon approval and collect the premium amount; in return for

which they get a certain amount of commission by the

insurance company.

He may sell individual policies for home, life, car and medical

insurance.

Negotiate the new terms with the insurance company.

Help the insured customers to get their insurance claim in case

of any natural disaster occurs.

-59-

ELIGIBILITY & CRITERIA TO BECOME A FINANCIAL

CONSULTANT:

IRDA Regulations for becoming an agent: The three pre-requisites

laid down by IRDA to qualify as an agent under the licensing

regulations are:

Educational Qualification : Possess a minimum educational

qualification of 12th standard or equivalent.(if population >5000)

and 10th standard or equivalent (if population < 5000).

Practical Training : Complete one hundred hours (100) of practical

training in life insurance business.

Pre-recruitment Test : Pass the pre-recruitment test, based on an

examination conducted by the Insurance Institute of India or

another approved body. (Agents licensed before the regulations

were notified i.e. on July 14, 2000 will be exempt from the above

requirements.)

-60-

Training process:

Training hours: 100

Two modes of training

(a) class room(b) online

Class training has two options

(a) Full time: -- 9.30 to 5.30 Monday to Saturday for 18 days + 3 days of product training.

(b) Part time: -- 6.30 pm to 9 pm Monday to Saturday for 34 days

(c) Online: -- on computer and 100 hrs must be completed within 30 days

(In case of professionals like CA’s, ICWA’s and MBA {from

premier institutes} Training is for 50 Hrs and must be completed in 9

days)

5. After the prospect have undergone the training process, he have to

appear for an online test, which is about the training he has done, and

he gets the result on the spot, and if he clears the examination then he

gets a license for 3 years and also, –HDFC STANDARD LIFE

INSURANCE gives free zero balance accounts to the ADVISORS.

-61-

NEED AND STAGES FOR LIFE INSURANCE

Why do I need Life Insurance?

Life insurance is designed to protect you and your family against

financial uncertainties that may result due to unfortunate demise or

illness. You can also view it as a comprehensive financial instrument

– as a part of your financial planning offering you savings &

investment facilities along with cover against financial loss. By

choosing the right policy as per your needs i.e. customized solutions,

you will be able to plan for a secure future for yourself and your loved

ones.

Choosing the right plan . Identifying the right plan basis your

needs is the first crucial step towards insurance planning.

At HDFC SL they help you through this decision by identifying your

various needs and offering plans that are customized for you. You

may also choose a plan for yourself by identifying the life stage you

are at.

-62-

Analyzing Needs:

Protection

Need for a sound income protection in case of your unfortunate

demise.

Investment

Need to ensure long-term real growth of your money.

Saving

Save for the milestones and protect your savings too.

Pension

Need to save for a comfortable life post retirement.

Once you have analyzed your needs as per above classification, you

need to then ascertain important factors such as type of cover,

insurance amount as per one's income, life stage and dependents. It is

difficult to arrive at all these figures yourself. Our financial

consultants can help you with all the analysis to offer a customized

solution by doing a thorough need analysis.

-63-

Life Stages for life insurance:

Your insurance need will change as your life does, from starting to

work to enjoying your golden years and all the stages in between.

Each one of these stages may pose a different insurance need/cover

for you. In this section, we have drawn up the basic life stages and

help you analyzes various insurance needs accordingly. Please get in

touch with our financial consultant to know more about our products.

-64-

-65-

STAGE 1

Young and Single

An important stage where one lays down the foundation of a

successful life ahead. Take advantage of the time and power of

compounding to ensure that you build up your dreams. Start saving

early.

Your needs:

Save for a home and wedding

Tax Planning

Save for Golden years

STAGE 2

Just Married

Marriage brings about a significant change. New dreams and new

opportunities also bring in additional responsibilities. While both of

you look forward to a happy and secure life , it is equally important to

ensure that eventualities don’t come in the way of shaping your

dreams.

Your needs:

Planning for home / securing your home loan liability

-66-

Save for vacation

Save for your first child

STAGE 3

Proud Parents

Once you have children, your need for life insurance is even more.

You need to protect your family from an untoward incident. Ensure

your protection umbrella takes into account the future cost of securing

your child’s dream. You will want life to go on for your loved ones,

and having enough life insurance is a way to help ensure that.

Your needs:

Provide for children’s education

Safeguarding family against loan liabilities

Savings for post-retirement

STAGE 4

-67-

Planning for Retirement

While you are busy climbing the ladder of success today, it is

important for you to take time and plan for your life after retirement.

Having an early start for retirement planning can make a significant

difference to your savings. Think about your golden years even before

you have reached them. The key is to think ahead and plan well using

your time and money.

Your needs:

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure, independent and comfortable life style in your retirement

years

DATA ANALYSIS

-68-

1)Why did you opt for HDFC SLIC ?

sources of information %age

a)                                                                Reference 60

b)                                                                Advertisement 20

c)                                                                 Ex-members 10

d)                                                                Others 10

0

10

20

30

40

50

60

70

%age

a)                                                               Reference

b)                                                               Advertisement

c)                                                                 Ex-members

d)                                                                Others

Interpretation

About 60% of the people they come by reference , 20% by advertisement

and other 10% ex-members and rest 10% come by other sources.

-69-

2)Out of five how would you rank various salary packages and incentives?

parameter %age

1 70

2 10

3 8

4 7

5 5

%age

0

20

40

60

80

1 2 3 4 5

parameter

%ag

e

%age

Interpretation

70% of the people said that their incentives are Excellent and 10% says that

its fair enough other 8% says its good and another 7% says that its poor and

rest 5% said that it is very poor.

-70-

3)Do you feel that recruitment system in HDFC SLIC is fair enough?

Response %age

Yes 85

No 15

%age

0

50

100

Yes No

%age

Interpretation

85% said that its excellent and there is no process apart from it which can be

recommended for recruitment but 50% said that its not upto the mark.

-71-

4) How would you grade the facilities provided under this system?

Excellent 50good 25average 10fair 10poor 5

0102030405060

Excell

ent

good

aver

age fair

poor

Series1

Interpretation

50% of the people said that that facility provided by the system are

Excellent and 25% says that facilities are good 10% says average and 10 say

that its fair other 5% say that facilities provided are poor.

-72-

5)Are you satisfied with the commission rate given by HDFC SLIC ?

Response %ageYes 70No 30

%age

0

20

40

60

80

Yes No

%age

Interpretation

70 % people are satisfied with the commission rate given by HDFC SLIC and

30% people are not satisfied with the commission rate given by HDFC SLIC.

-73-

6)To what extent do you feel that HDFC SLIC provides job satisfaction ?

Excellent 25good 50average 10fair 10poor 5

0102030405060

Excell

ent

good

aver

age fair

poor

Series1

Interpretation

25% respondents give excellent response about this and 50% say that it is good

10% says that it is average and other 10% says that it is fair and other are not

satisfied by it.

-74-

7) Is the commission given by HDFC SLIC compatable with other companies?

Response %ageYes 75No 25

%age

0

20

40

60

80

Yes No

%age

Interpretation

75% of the people says that the commission given by HDFC SLIC compatable

with other companies and other says that it is compatable with other companies

-75-

8) Rate your satisfaction level of training undergone by you?

5 404 303 152 101 5

0

10

20

30

40

50

1 2 3 4 5

parameter

%ag

e Series1

Series2

Interpretation

40% of the people rate at 5th position on likert scale, 30% rate on the 4th position,

15% on the 3rd position, 10% on 2nd and other 5% on one.

-76-

9) How would you rank the behaviour of your top authority in solving your problem out of 5?

Parameter %age5 84 73 102 151 60

%age

0

20

40

60

80

1 2 3 4 5

parameter

%ag

e

%age

Interpretation

8% of the people give 5th rank to their top authorities, 7% give the 4th rank to them,

3% people give 3rd rank, 15% give 2nd rank and other 60% people give them 1st

rank.

-77-

10) Do you think that company’s atmosphere is fair enough for your future growth, rate on the scale of 5?

Parameter %age5 84 603 152 101 7

%age

0

20

40

60

80

1 2 3 4 5

%age

Interpretation

8% people think that the company’s atmosphere is fair and they give it the rank on

5th position, 60% give it the 4th position, 15% give the 3rd position and 10% give

the 2nd position and 7% iof the people give it the 1st position

-78-

11) Will you recommend HDFC SLIC to others for being a financial consultant?

Response %ageYes 80No 20

%age

0

20

40

60

80

100

Yes No

%age

Interpretation

80% of the people recommend that HDFC SLIC is good for being a financial

consultant but the rest 20% are not in its favour.

-79-

12) Do you think that people get ahead primarily on the merit of this work, rate on scale of 5?Parameter %age

5 54 203 152 101 50

%age

0102030

405060

1 2 3 4 5

%age

Interpretation

5% respondents give 5th position to it 20% respondents give it 4th position 15%

respondents give 3rd position 10% people give it 2nd rank and rest 50% give it 1st

position

-80-

13) Do you satisfied with the amount and frequency of informal praise and application you received from your boss, rate on scale of 5?

0

10

20

30

40

50

1 2 3 4 5

parameter

%ag

e Series1

Series2

Interpretation

40% respondents give it the 5th position, 30% respondents give it 4th position, 15%

give 3rd position and 10% give it 2nd position and rest 5% give it the 1st position.

-81-

5 404 303 152 101 5

14)Any suggestion for improvement of the recruitment system?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

-82-

CONCLUSION AND SUGGESTIONS

The company should spread its advertisements so that it can

increase in the quantity of financial consultants because most of

the financial consultants come through references.

The job satisfaction provided by the company is good but it

should take more step to makes it excellent

The training procedure of the company is excellent.

The recruitment system is fair enough to recruit the people as a

financial consultant of the company

The company is providing good commission to its members and it

is more as compare to other company.

The facilities providing during the training session is good.

-83-

QUESTIONAIRE

Name:Age:Department:Qualification:Licence no:

1)Why did you opt for HDFC SLIC ?a) Referenceb) Advertisementc) Ex-membersd) Others

2)Out of five how would you rank various salary packages and incentives?

a)1 b)2 c)3 d)4 e)5

3)Do you feel that recruitment system in HDFC SLIC is fair enough?

a) Yes B)No

4) How would you grade the facilities provided under this system?

a) Excellent b)good c)average d)fair e)poor

5)Are you satisfied with the commission rate given by HDFC SLIC ?

a)Yes b)no

-84-

6)To what extent do you feel that HDFC SLIC provides job satisfaction ?

a)Excellent b)Good c)Average d)Fair e)Poor

7)Is the commission given by HDFC SLIC compatable with other companies?

a) Yes b) No

8)Rate your satisfaction level of training gone by you?

a)5 b)4 c)3 d)2 e)1

9)How would you rank the behaviour of your top authority in solving your problem out of 5?

a)1 b)2 c)3 d)4 e)5

10)Do you think that company’s atmosphere is fair enough for your future growth, rate on the scale of 5?

a)1 b)2 c)3 d)4 e)5

11)Will you recommend HDFC SLIC to others for being a financial consultant?

a)Yes b)No

12)Do you think that people get ahead primarily on the merit of this work, rate on scale of 5?

a)1 b)2 c)3 d)4 e)5

-85-

13)Do you satisfied with the amount and frequency of informal praise and application you received from your boss, rate on scale of 5?

a)1 b)2 c)3 d)4 e)5

14)Any suggestion for improvement of the recruitment system?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

-86-

BIBLIOGRAPHY

News Papers:-

1. The Economic Times.

2. Times of India.

3. Business standard.

4. Financial Express.

Magazines:-

1. Business world.

2. Business Today

3. Outlook.

Internet Sites:-

1. www.hdfcinsueance.com

2. www.researchandmarket.com

3. www.insure2bsecure.com

4. www.google.com

5. www.insuremagic.com

-87-