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WHAT IS INSURANCE?Every asset has a value for its owner and also for those who are benefited with the existence of that asset. Insurance is concerned with protection of economic value of asset.All of us are interested in the creation of assets because:

1. All assets have value.

2. They yield income to the owner.

3. They meet some other needs of the owner.

4. They may provide satisfaction of some needs and also yield income to the owner.

Under the life insurance, the insurance company guarantees to pay, in consideration of a regular premium a certain sum of money to the policy holder on his attaining a certain age, or to his nominee on his death, whichever is earlier. Life insurance is also known as Assurance because sooner or later the amount of the policy must be paid. DEFINITION

In the words of D.S. Hansel, insurance is accumulated contributions of all parties participating in the scheme

BRIEF HISTORY OF THE INSURANCE

The beginning of insurance business is traced to the city of London. It started with the marine business. Marine traders, who used together at Lloyds coffee house in London, agreed to share losses to goods during transportation by ship. Marine related losses included:--

i. Loss of ship by sinking due to bad weather in high seas.

ii. Goods in transit by ship robbed by sea pirates.

iii. Loss of or damage to the goods in transit by ship due to bad weather in high seas.

iv. The first insurance policy was issued in England in 1583

PURPOSE AND NEED FOR INSURANCEi.Assets are likely to be destroyed or made non-functional due to accidental occurrences called perils. Assets can, therefore, be insured. iiPossibility of damage to assets caused by a peril is the risk that asset is exposed to.iiiRisk means uncertainty or unpredictability about future loss or damage, which may or may not happen. This refers to the losses, which may happen suddenly and unexpectedly.ivThis is because of uncertainty about the risk that insurance plays a role.vInsurance becomes relevant only if there are uncertainties of occurrence of event leading to loss/es. Insurance is done against the contingency of the happening of such events.

viNo uncertainty-No Insurance.

MECHANISM OF INSURANCE

i.The concept of insurance is that-People exposed to the same risk come together and agree to share a loss collectively if any one of their members suffer from that risk.ii.The insurance companies play the vital role of implementing this concept. They try bringing together people exposed to the similar risk; they collect members contribution in advance in the shape of premiums and create a fund out of which the losses are paid.iii.In the event of breadwinners death, the familys income stops suddenly.ivThe familys income may also stop on retirement of the breadwinner.

v.Life insurance covers the above contingencies and provides relief to the family in the event of the death of retirement of the breadwinner.

viVariable needs for life insurance can be- Providing financial security to the family, provision for childrens education, marriage, etc. Post-retirement income for self and dependents, special needs like Medical expenses, etc.

What do you mean by life insurance?

Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects yourfamily from financial crises.In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably.CHARACTERISTIC OF INSURANCELife Insurance has come a long way from the earlier days when it was originally conceived as a risk covering medium for a short period of time, covering temporary risk situations, such as sea voyages. As life insurance became more established, it was realized what a useful tool it was for a number of situations, including:--

1.Temporary needs/Threats: The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc

2.Regular Savings: Providing for ones family and oneself, as a medium to long term exercise ( through a series of regular payment of premiums ). This has become more relevant in recent times as people seek financial independent for their family.3.Investment: It is the building up of savings, to meet the sudden needs of the family and to cope with inflation. It is a process of saving for the future needs and to provide for risk cover.4.Retirement :Provision for latter years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in ones old age.

ADVANTAGES OF LIFE INSURANCE

Life Insurance Policy is a form of security for the person who insures his life and his family. Life insurance policies have helped trade and other economic activities to flourish in a great manner. It has generated lots of job opportunities. It is looked upon as a lucrative career option. Life insurance companies have also entered the international business scenario.

There are many advantages of life insurance and these advantages are as follow:

A) Early Deaths : The mortality rate is experiencing a declining trend in many parts of the world. However it is also important to note that the age at which People die is also ever decreasing. Some reasons for this include unhealthy living style, stress, pollution, and some natural calamities. This necessitates people to make adequate measures to yield income for their family and dependents. This could be a serious concern if the insured happens to be the sole bread winner. Some individuals see this as an option to plan their retirement. B) Advancements in Health Care : The mortality rate has declined rapidly even though the fact remains that the number of people who die at an early age is on the increase. This is mainly due to the advancement in healthcare and the awareness on medical facilities. This results in an increased spending at an old age. This increased spending is also due to increase in the costs of living apart from paying expensive medical bills. Unless they invest in Life insurance or other forms of insurance like health insurance it becomes next only to impossible to meet the financial demands especially during the old days. C) Increase in the Cost of Living and Spending Power : The purchasing power of the consumers and the standard of living has experienced a steep rise over the years. The increase in National Income and gross domestic product are partly responsible for this. Individuals incur many unexpected expenses due to the growing needs. Insurance comes in handy to meet such an unexpected expense. It also makes sure that an individual is able to meticulously plan his finances.Insurance option is more or less an interest free loan. An individual can cancel his insurance policy and obtain a huge amount if it is imperative in meeting an urgent expenses and he does not have alternative sources for finance. Life insurance companies therefore do the needful to consumers. D) Tax Concessions: Income tax concessions are available to individuals and corporate houses who adopt insurance policies. Many have been making investments in Insurance with the sole aim of enjoying tax benefits. This naturally increases spending power. Since the investments increases the economic activities in the country automatically increases. E) Best Option for Salaried Youth : Insurance is by and large regarded as one of the savings scheme. Students who earn while studying and those who take up full time employment after their studies see insurance as a profitable scheme to regulate their savings. Apart from tax concessions life insurance entails individuals to enjoy more benefits as they have special and attractiveTYPES OF INSURANCE PLAN

(Figure 1.1)PROTECTION PLANWhy do I need Protection Plans?

Protection Plans help you shield your family from uncertainties in life due to financial losses in terms of loss of income that may dawn upon them incase of your untimely demise or critical illness. Securing the future of ones family is one of the most important goals of life. Protection Plans go a long way in ensuring your familys financial independence in the event of your unfortunate demise or critical illness. They are all the more important if you are the chief wage earner in your family. No matter how much you have saved or invested over the years, sudden eventualities, such as death or critical illness, always tend to affect your family financially apart from the huge emotional loss.

For instance, consider the example of Amit who is a healthy 25 year old guy with a income of Rs. 1,00,000/- per annum. Let's assume his income increases at a rate of 10% per annum, while the inflation rate is around 4%; this is how his income chart will look like, until he retires at the age of 60 years. At 50 years of age, Amits real income would have been around Rs. 10,00,000/- per annum. However, in case of Amits unfortunatedemise at an early age of 42 years, the loss of income to his family would be nearly Rs. 5,00,000/- per annum.

(FIGURE 1.2)However, with a Protection Plan, a mere sum of Rs. 2,280/- annually (exclusive of service tax & educational cess) can help Amit provide a financial cushion of up to Rs. 10,00,000/- for his family over a period of 25 years.

(Figure 1.3)HDFC TERM ASSURANC PLANWhat is HDFC Assurance Plan?

This plan is brought to you by HDFC Standard Life Insurance Company Limited. It is a with profits savings policy, which offers the following features:

The policy receives simple reversionary bonuses, which are usually

added annually.

At maturity, the policy pays out the basic Sum Assured plus reversionary

bonuses declared during the policy term. Interim or terminal bonus may

also be payable.

Provides financial support to your family by way of a lump sum payment

in case of your unfortunate death within the term of the policy. The lump sum is the basic sum assured plus any bonus additions.

The policy can be surrendered for cash value before maturity.Waiting period

A 90-day waiting period will be imposed at the start of the policy. Claims as a result of death due to non-accidental causes during this period will be declined. Claims as a result of death due to accidental causes during this period will be met in full.

Exclusions

We shall not be liable to pay the benefit amount indicated in your policy schedule if the death of the Life Assured is caused directly or indirectly by suicide within one year of the date of Commencement or the date of issue or the date of reinstatement of the policy, whichever is later.

General Information

1. If you pay premiums for a continuous period of 3 years, your policy will acquire a guaranteed minimum surrender value, which is zero in respect of premiums paid in the first year and 50% of premiums in respect of the basic benefit paid subsequent to the first year. Surrender values higher than the guaranteed minimum surrender value may be payable at our sole discretion.

2. In the event that any premium remains unpaid 15 days after the premium due date and your policy has either, at our discretion, acquired a surrender value, or has acquired a guaranteed surrender value, your policy will be altered to a paid-up policy, subject to any terms and conditions which we may specify from time to time. A table of adjustment factors will be used to adjust the policys basic sum assured to a paid up value. The adjustment factors will vary by the policyholders age, policys original term, policy duration and premium frequency. The paid-up value will be at least equal to the minimum paid-up value required by sub-section 113 (2) of the Insurance Act, 1938. Once your policy is made paid-up it will cease to participate in profits. 3. If, however, any premium remains unpaid 15 days after the premium due date and your policy does not have a surrender value, the basic benefit will lapse and no benefit will be payable to you. 4. If your policy has been paid-up, it may be reinstated, subject to our consent and such terms and conditions as we may specify from time to time. On death during the first year following reinstatement, the death benefit is limited to 80% of premiums received. 5. No policy loan is available.

6. The premium rates for frequencies other than annual are calculated by multiplying the annual premium rates by the adjustment factors. These factors are 1.0 for annual mode, 0.5225 for half-yearly mode, 0.265 for quarterly mode and 0.09 for monthly mode. The policy fee varies with premium frequency and

is Rs. 150 for annual, Rs. 80 for half-yearly, Rs. 45 for quarterly and Rs. 20 for monthly mode. The minimum premiums are Rs. 1,800 for yearly, Rs. 1,000 for half-yearly & Rs. 550 for quarterly & Rs. 200 for monthly mode.Sec. 41 Insurance Act, 1938 - Prohibition of rebates

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 shown on the policy, nor shall any person taking out or renewing 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. Provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfies the prescribed conditions established that he is a bonafide insurance agent employed by the insurer.

Any person making default in complying with the provisions of this section

shall be punishable with fine, which may extend to five hundred rupees.Sec. 45 Insurance Act, 1938 - Non-Disclosure

No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer,

or referee, or friend of the insured, or in any other document leading to issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.

TERMS AND CONDITIONS:

1. Service Tax : As per the Service Tax Laws, service tax is applicable on the life insurance premium. Any other indirect tax or statutory levy becoming applicable in future may become payable by you by any method we deem appropriate including by levy of an additional monetary amount in addition to the premium.

2. The tax benefits are subject to changes in the tax laws.

HDFC Home Loan Protection Plan

Why do I need insurance?

When you take out a home loan, you enter into a financial commitment between yourself and the lender. If you are unable to fulfil this commitment, the lender can take possession of your home. If you have dependants who you care for, you need to ensure that they are provided for should you die. The emotional trauma can not be avoided; the financial trauma can be.

What is the HDFC Home Loan Protection Plan?

The HDFC Home Loan Protection Plan provides you with the comfort of knowing that should you die, a sum of money will be available towards repaying your housing loan. This means that your dependants will be secure in your family home HDFC Home Loan Protection Plan

Benefits

A decreasing sum assured payable if you die during the term of the contract. This sum assured is intended to help pay-off your outstanding home loan. By reducing the sum assured as the years go by, we ensure that you do not pay for protection you dont need.

Your commitment

To avail yourself of this policy, you only need to pay us a single premium in advance. It may be possible to include this premium in the loan amount and repay as part of your regular instalments.

Am I eligible?

The eligibility limits are:

Minimum age at entry 18

Maximum age at entry 50

Maximum age at expiry 60

The maximum sum assured available under the plan is Rs. 30,00,000*.

The minimum single premium under the plan is Rs. 2,000.

How much will it cost?

The HDFC Home Loan Protection Plan offers excellent value for money. Here are some examples of premiums, calculated for the plan, on male lives:

Age last birthday Term Sum Assured Single Premium Annual Cost

30 20 3,00,000 7,374 369

35 15 3,00,000 6,813 454

40 10 3,00,000 6,231 623

Note: Quoted Single Premium does not include Service Tax and Education Cess.

By allowing the premium to be included with the Home Loan repayments, the HDFC Home Loan Protection Plan provides an affordable way to protect your family home.

Exclusions

The following exclusions apply:

We shall not be liable to pay the benefit amount indicated in your policy schedule if the

death of the Life Assured is caused directly or indirectly by suicide within one year of the

Date of Commencement or the date of issue of the Policy, if later.

Claims as a result of death due to non-accidental causes during the first 90 days of your

policy will be declined.

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 shown on the policy, nor shall any person taking out or renewing 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.

RURAL PRODUCTTimely preparedness for uncertainties of the future can go a long way towards living a life of confidence. HDFC rural product provides this preparedness through robust returns even on an investment as small as Rs. 200 by adding 50% to your original investment in 3 years. In addition to the guaranteed returns, the plan offers the security of a life insurance cover (i.e. in case of unfortunate demise of policyholder before the end of policy term, the nominee will receive the death benefit) and the flexibility to exit prematurely. HDFC rural product is a special offering from HDFC Standard Life, exclusively for the benefit of our rural customers.

Product Features

On survival of the life assured to maturity of the plan which is 3 years after the inception date, a maturity benefit of Rs. 300 is payable.

On termination of the plan before maturity, benefits payable are (in Rs.):

During Year123

On Death500050005000

On Surrender200230260

(Table1.1)

Eligibility

To be eligible for this plan, age at entry of the life assured must be between 18 and 50 years of age. Term period is fixed as 3 years and the Maximum age at Maturity is 53. This policy can be taken only on a single-life basis.

Premium

A single premium of Rs. 200 is due on the date of commencement. There are no further premium/s due. SOCIAL PRODUCT

Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to members of a Development Agency for a term of one year. On the death of any member of the group insured during the year of cover, a lump sum is paid to that members beneficiaries to help meet some of the immediate financial needs following their loss.

Eligibility

Members of the development agency and their spouses with:

Minimum age at the start of the policy 18 years last birthday.

Maximum age at the start of policy 50 years last birthday.

Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members.

Premium Payments

The premium to be paid will be quoted per member in the group and will be the same for all members of the group. The premium can only be paid by the Development Agency as a single lump sum that includes all premiums for the group to be covered. Cover will not start until the premium and all the member information in our specified format has been received. The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.

Benefits

On the death of each member covered by the policy during the year of cover a lump sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid at the end of the year of cover and there is no surrender value available at any time.

The Role Of The Development Agency

Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative tasks onto the Development Agency. By passing on these tasks the premium charged can be lower. These tasks would include:

Submission of member data in a specified computer format

Collection of premiums from group members

Recording changes in the details of group members

Disbursement of claim payments and the mortality rebate (if any) to group members

These tasks would be in addition to the usual duties of a policyholder such as:

Payment of premiums

Reporting of claims

Keeping policy holder information up to date

Training and support will be available to give guidance on how to complete the tasks appropriately. Since these additional tasks will impose a burden on the Development Agency, the Development Agency may charge a Rs. 10 administration fee to their members.

Prohibition Of Rebates

Section 41 of the Insurance Act, 1938 states

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 shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer.

If any person fails to comply with sub regulation (previous point) above, he shall be liable to payment of a fine which may extend to rupees five hundred

CHIDERNS PLANWhy do I need Childrens Plans?

Childrens Plans helps you save so that you can fulfill your childs dreams and aspirations. These plans go a long way in securing your childs future by financing the key milestones in their lives even if you are no longer around to oversee them. As a parent, you wish to provide your child with the very best that life offers, the best possible education, marriage and life style.

Most of these goals have a price tag attached and unless you plan your finances carefully, you may not be able to provide the required economic support to your child when you need it the most. For example, with the high and rising costs of education, if you are not financially prepared, your child may miss an opportunity of a lifetime.

Today, a 2-year MBA course at a premiere management institute would cost you nearly Rs. 3,00,000/- At a assumed 6% rate of inflation per annum, 20 years later, you would need almost Rs. 9,07,680/- to finance your child's MBA degree.

An illustration of how education expenses could rise with passing time due to inflation

Source: HDFC Standard Life Survey 2008. Inflation assumed as 6% p.a. (Figure1.4)

So, how can you cope with these costs? Childrens Plans help you save steadily over the long term so that you can secure your childs future needs, be it higher education, marriage or anything else. A small sum invested by you regularly can help you build a decent corpus over a period of time and go a long way in providing your child a secured financial future alongwith

Types of Childrens Plans

Our range of Children's Plans includesTABLE (1.2)

Conventional PlansUnit Linked Insurance Plans

HDFC Children's Plan HDFC SL YoungStar Super II

(FIGURE 1.5)

HDFC Childrens planChildrens Plan is designed to provide a lump sum to the child at maturity. It also provides financial security to the child in the future, even in case of the insured parents unfortunate death during the policy term. Childrens Plan receives simple reversionary bonuses, which are usually added annually. This is a flexible plan with 3 option for you to choose from, depending on your requirements. The details of these options are explained in the next section. The option that is available with this plan.OptionOn the death of the insured parent during the policy termOn Maturity

Maturity Benefit PlanFuture premiums waived and the policy continues till maturitySum assured bonuses paid

Accelerated Benefit PlanSum assured + bonuses paid and the policy stopsOn the survival of the insured parent to the maturity date, sum assured+ bonuses paid

(TABLE 1.3)

The childrens plans offer you tax benefits.The premium you pay will be eligible for tax relief under section 88 of the Income Tax Act, 1961. The benefits received under the policy are eligible for tax relief under section 10(810D) of the Income Tax Act, 1961.

a.Eligibility

The eligibility ages for the life assured under the plan are as follows:-

Min. age at entry

18years

Max. age at entry

60years

Max. age at maturity

75years

Min. Term: 10years

Max. Term: 25years

b. The Payment OptionsYou have the choice of paying the premium either in yearly, half yearly or quarterly models, depending on your convenience.Indicative Premium

Child Current Age: 1year

Age of Parents(Years)Maturity Benefit Plan (Rs.)Accelerated Benefits PlanDouble Benefits Plan (Rs.)

304,6584,8354,937

354,6844,9295,078

404,7315,0985,321

(TABLE 1.4)

The above quoted premiums are for a male life assured paying annual premiums for a Rs. 1 Lakh sum assured policy, with the policy maturing the child is 21 years old. The premium quoted above may vary as a result of underwriting.

Age of Parents(years)Maturity Benefit Plan (Rs.)Accelerated Benefits PlanDouble Benefits Plan (Rs.)

307,0397,1427,282

357,0637,1697,390

407,1077,3007,593

(TABLE 1.5)

The above quoted premiums are for a male life assured paying annual premium for a Rs. 1Lakh sum assured policy, with the policy maturing when the child is 21 years old. The premium quoted above may vary as a result of underwriting. HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC, Indias largest housing finance institution and Standard Life Assurance Company, Europes largest mutual life company. HDFC manages Rs. 26,300 crore in assets and standard life manages over US $100 billion in assets. Both the promoters are well known for their ethical dealings, their financial strength and their commitment to be a long term player in the life insurance industry- all important factors to consider when choosing your insurer.

HDFC SL YoungStar Super II

Guide to Risk Benefit ChargesThis section aims to make you understand what risk benefit charges in unit-linked products are and how we compute them. There can be two types of risk benefit charges in our unit-linked products. Each type is meant to charge for different types of cover you choose. They are (as defined by IRDA vide Circular No.

1. Mortality Charge

This is the cost of life insurance cover. It is exclusive of any expense loadings levied either by cancellation of units or by debiting the premium but not both. This charge may be levied at the beginning of each policy month from the fund.

2. Extra Health Benefit Charge

This is the cost of Critical Illness benefit (offered to you exclusively as Extra Heath Benefit) cover. It is exclusive of any expense loadings levied either by cancellation of units or by debiting the premium but not both. This charge may be levied at the beginning of each policy month from the fund.

We compute the monthly charge for any benefit using the following formula:

* 1

1000

arg arg ( ) * _ _ Sum at Risk

Ch e amount = Ch e Rate attained age

Here,

Charge Rate (attained age) = Charge Rate applicable for the month depending on the attained age of the life assured on the day of calculation of charge amount

Sum_at_Risk = Part of the risk benefit on the day of calculation of charge amount (which includes the Sum Assured plus a value of the future premiums payable) that we are liable to pay on valid claim We deduct these charges every month by de allocating units proportionately from all funds that your money is invested at the time of deduction of charge.

The charge rates (per Rs. 1,000 Sum_at_Risk) applicable for specific ages are:

Notes

Mortality charge rates are guaranteed for the policy term

Extra Health Benefit charge rates can be reviewed at the end of every three years from the launch of the product

No changes can be made to our current Extra Health Benefit charge rates without prior approval from the Insurance Regulatory and Development Authority (IRDA)

Statutory Charges Service Tax & Education Cess is payable at the applicable rate on the Mortality and the other Risk Benefit Charges

We will be providing you information about how much we have deducted towards risk benefit charges for your policy in the annual unit statement send to you after every policy anniversary It is important that you do not judge a unit linked plan solely on the basis of the risk benefit charges or any other charge taken independently.

Charges interact with each other. Thus, the key to understand the charges of your plan and how they impact the maturity value of your policy is to look at the policy benefit illustration.HEALTH PLANHealth plans give you the financial security to meet health related contingencies. Due to changing lifestyles, health issues have acquired completely new dimension overtime, becoming more complex in nature. It becomes imperative then to have a health plan in place, which will ensure that no matter how critical your illness is, it does not impact your financial independence.

In the race to excel in our professional lives and provide the best for our loved ones, we sometimes neglect the most important asset that we have our health. With increasing levels of stress, negligible physical activity and a deteriorating environment due to rapid urbanization, our vulnerability to diseases has increased at an alarming rate.

Source: National Commission on Macroeconomics and Health Report 2005.

(FIGURE 1.6)

Note: Current figures are for the year 2000(Cardiovascular diseases)), 2001 (COPD and Asthma), 2004 (Cancer) and 2005(Diabetes and Mental Health). All figures above are on a per lakh basis.

As can be seen in the above chart, lifestyle diseases are set to spread at disturbing rates. The result increased expenditure. In many cases, people need to borrow money or sell assets to cover their medical expenses. All it takes is a suitable plan to help you overcome the financial woes related to your health by paying marginal amounts as premiums. For example, if you are 30 years old, then a mere sum of approximately Rs 3500* annually (exclusive of taxes) can provide you a health insurance plan of Rs 5 lakh over a period of 20 years, and a worry-free future for you and your family.

(FIGURE 1.7)

SAVING AND INVESTMENT PLAN:

You have always given your family the very best. And there is no reason why they shouldnt get the very best in the future too. As a judicious family man, your priority is to secure the well-being of those who depend on you. Not just for today, but also in the long term. More importantly, you have to ensure that your familys future expenses are taken care, even if something unfortunate were to happen to you.A big factor that you need to consider while building your wealth is inflation. It has a dual impact on your hard-earned savings. Inflation not only erodes your current purchasing power but also magnifies your monetary requirements for the future. Sample this: An 35 Year individual needs to invest Rs. 36,000/- per year with 8% returns to build a corpus of Rs. 10,00,000/- by the age of 50 Years.

(FIGURE 1.8)

However, Rs. 10,00,000/- after 15 years would be worth roughly around half of what it is today once adjusted for inflation at the rate of 4%. Therefore, an individual will need to save nearer to Rs 50,000/- annually to reach your targeted savings at the age of 50 Years, if you consider inflation.

Our Savings & Investment Plans provide you the assurance of lump sum funds for your and your familys future expenses. While providing an excellent savings tool for your short term and long term financial goals, these plans also assure your family a certain sum by way of an insurance cover. With HDFC Standard Lifes range of Saving & Investment Plans, you can therefore ensure that your family always remains financially independent, even if you are not around.

Types of Savings & Investment Plans

Our range of Savings & Investment Plans includes

TypeConventional PlansUnit Linked Insurance Plans

Regular Premium HDFC Endowment Assurance Plan

HDFC SL New Money Back Plan

HDFC Money Back Plan

HDFC Assurance Plan#

HDFC Savings Assurance Plan^ HDFC SL ProGrowth Super II

Single Premium/ Investment HDFC Single Premium Whole of Life Insurance Plan

Limited Premium Payment HDFC SL Crest

(TABLE 1.6)

HDFC Assurance Plan is available for sale through our Bancassurance Partners (HDFC Ltd.,HDFC Bank, Saraswat Bank and Indian Bank) ^HDFC Savings Assurance Plan is available for sale through HDFC Bank

MONEY BACK PLANIt is a participating with profits insurance plan that offers the following features:--

Payment of cash lump sum, each of which is a proportion of the basic sum assured at 5 year intervals during the term of the policy. (Please refer to the table given below).

On survival up to maturity a payment equal to the basic sum assured + any bonus additions less the cash lump sums paid earlier is provided.

In case of the unfortunate death of the life assured within the term of the policy, the basic sum assured + any bonus additions is provided. This is above the earlier payouts.

A.Schedule of Cash Lump Sum

(As a basic sum assured)

Total Policy TermNumber of years from policy date

510152025

1040%

1530%30%

2025%25%25%

2520%20%20%20%

3015%15%15%15%15%

(TABLE 1.7 A.Benefit To BoyThis plan helps you for future anticipated expenses by paying periodic cash lump sums to you at regular intervals. This plan also helps to provide for the needs of your family in your absence by paying them the basic sum assured plus any bonus additions in the event of your unfortunate death during the term of the policy.

b. Optional benefits are available with the plan

You can add the following optional benefits to customize your policy to suit your needs:--

Critical Illness Benefits provide an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any of the 6 common critical illness(1). The sum assured is payable if you survive 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 provides an additional amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death.

Accidental death benefit provides an additional amount equal to the basic sum assured in case you die:

Due to accident, &

Within 90 days of the accident Waiver Of Premium (WOP) benefit waives the premium for you in case become totally disabled. The waiver is applicable during the period of total disability.

All optional benefit must be selected at the outset of your plan. (1) Cancer, Coronary Artery Bypass Grafts Surgery, Heart Attack, Kidney / Rental Failure, Major Organ Transplant (as recipient) & Stroke.

b. Money Back Plan & Tax Benefits

Tax benefits described in section 88, section 80D** & section 10 (10D) of the income tax act are applicable.

**Applicable to premiums paid for CI & WOP.

D.Eligibility

This plan can be taken on a single life basis or a joint life (first claim) basis. This eligibility ages are as follows.

Basic PolicyBasic Policy with Optional Benefits

CIATBADAWOP

Min. age at entry12181818

Max. age at entry6055605550

Max. age at expiry7570756560

Min. Term: 10 years

Max. Term: 30 years(TABLE 1.8)The Payment OptionsYou have the choice of paying the premium either in yearly, half yearly or quarterly models, depending on your convenience.c. Indicative Premium

Age (Yrs.)Basic Policy Premium(Rs.)Additional Premium for Optional Benefits (Rs.)

CIATBADBWOP

207491304322136352

307585442388144443

407925925641156672

50881518901357Not AvailableNot Available

(TABLE 1.9)ENDOWMENT ASSURANCE PLAN

What is an Endowment Assurance Plan?

It is participating (with profits) insurance plan that offers the following features:

Provides financial support to the family by way of a lump sum payment in case of the unfortunate death of the life assured within the term of the policy. Provide a lump sum payment to the life assured on survival up to maturity. The lump sum mentioned is the basic sum assured plus any bonus additions.

a. Benefits

This plan is a with profits saving plan and is well suited for saving money for your long term financial goals. This plan also helps to 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 policy. What optional benefits are available with this plan?

You can add the following optical benefits to customize your policy to suit your needs. Critical Illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any of the 6 common critical illnesses (1). The sum assured is payable if you survive for 30 years after the date of the claim. Once such a claim has been met, further Critical Illness benefit is payable. However, your basic policy Term Benefit (ATB) provides an additional amount equal to the sum assured chosen under this optional benefit, in case of your unfortunate death.

Accidental Death Benefit (ADA) provides an additional amount, equal to the sum assured chosen under this optical benefit, in case of your unfortunate death.

Due to accident, &

Within 90 days of the accident Waiver Of Premium (WOP) benefit waives the premium for you in case become totally disabled. The waiver is applicable during the period of total disability.

All optional benefit must be selected at the outset of your plan. (1) Cancer, Coronary Artery Bypass Grafts Surgery, Heart Attack, Kidney / Rental Failure, Major Organ Transplant (as recipient) & Stroke.

Does Endowment Assurance Plan offer you tax benefit?

Tax benefits described in section 88, section 80D** & section 10 (10D) of the income tax act are applicable.

b. Eligibility

This plan can be taken on a single life basis or a joint life (first claim) basis. This eligibility ages are as follows.

Basic PolicyBasic Policy with Optional Benefits

CIATBADAWOP

Min. age at entry1218181818

Max. age at entry6055605550

Max. age at expiry7570756560

(TABLE 1.10)Min. Term: 10 years

Max. Term: 30 years

RETIREMENT PLANSRetirement Plans provide you with financial security so that when your professional income starts to ebb, you can still live with pride without compromising on your living standards. By providing you a tool to accumulate and invest your savings, these plans give you a lump sum on retirement, which is then used to get regular income through an annuity plan. Given the high cost of living and rising inflation, employer pensions alone are not sufficient. Pension planning has therefore become critical today.

Indias average life expectancy is slated to increase to over 75 years by 2050 from the present level of close to 65 years. Life spans have been increasing due to better health and sanitation conditions in the country. However, the average number of years of employment has not been rising commensurately. The result is an increase in the number of post-retirement years. Accordingly, it has become necessary to ensure regular income for life after retirement, so that you can live with pride and enjoy your twilight years.

Priorities at different stages of life:-

(FIGURE 1.9)Top of Form

However, skyrocketing costs can throw even a well-laid plan off balance. With costs rising every day, you can just imagine how high they will be when you are ready to hang up your boots. So, what should you do to counter this? Its time to plan your retirement and that too sooner than later.

(FIGURE 1.10)

The above illustration shows how with each passing year your annual savings requirement would increase. For instance, if you are 30 years old and plan to retire at 60, then, with a current annual expenditure of Rs. 3,00,000/- , you would need a corpus in excess of Rs. 2,00,00,000/- to maintain your living standards, assuming you live till 85 years and the inflation rate is 4%. To build this retirement corpus, you need to invest Rs 3,60,000/- per annum in a retirement plan that offers 8% returns per annum. In case you delay planning your retirement by 5 years then the investment amount would increase to Rs 6,90,000/- per annum.

Types of Retirement Plans

Our range of Retirement Plans includes

TypeConventional PlansUnit Linked Insurance Plans

Regular Premium HDFC Personal Pension Plan

SinglePremium/Investment

(TABLE 1.11)1. PERSONAL PENSION PLAN

Before you enter into any financial contract, it is important that you understand what the product is, how it works, the risk involved and what a decision to buy could mean for you. We recommend that you read this document before you purchase a policy form HDFC Standard life Insurance Company.a. PURPOSE

The policy is basically a savings contract, which is designed to provide an income for life from retirement, with an option to take the lump sum elsewhere to buy annuity, provided it is permitted by the prevailing regulations.

Your commitment: you agree to pay a single premium or level premiums with installment due every quarter, half- year or year throughout the deferment period of the policy, after which you will start receiving your pension.

b. RISK FACTOR

If you cease to pay premiums we may pay a surrender value. This will determined at our discretion. If any of the information which you provide is incorrect, we reserve the right to vary the benefits which may be payable and further, if there has been non- disclosure of a material fact then we may treat your policy as void. We will not pay out if a claim arises from an excluded cause of death. Future bonuses are not guaranteed. They are dependent on our future experience. The principal elements of experience are our investment performance and expenses.

c. PREMIUM PAYMENT

You can pay either a single premium or pay premiums in quarterly, half-yearly or annual form by cheque, in cash or by bank draft.

d. BASIC BENEFITS PAID

Your basic benefits will be paid by cheque. You cannot increase your benefits or term under the policy. To increase your benefits, you would need a new policy. You should contact your personal financial consultant. You may be able to decrease the benefits. The terms for so doing will be at our discretion.

e. ELIGIBILITY

The age and term limits for taking out a personal pension plan are;

Minimum TermsMaximum TermsMinimum age at entryMaximum age at entryMinimum age at retirementMaximum age at retirement

RPISP2RPSPRPSP605070

10540151835

(TABLE 1.12)LITERATURE REVIEW

1.Malhotra Dr. A.k(July-Sep 2004)In this paper the author has concluded that the Indian market will witness the development of multiple insurance distribution channels. Distributors will increase the range of their offering through multiple products and services. It also concluded that nationalized players will continue to hold strong market share positions,but there will be enough business to be profitable. This is the most compelling reasons why private sectors and foreign companies shall be spreading the insurance habit in the societal and consumer interest in this vital sector of the economy.

2.Chopra Monika(July-Sep,2004)In this paper the author said that the ICICI Prudential followed by Bajaj Allianz & Birla sun Life occupied the highest market share as percentage and number of policies. The lowest was the Metlife India, In case of market share as percentage of number of lives covered under group scheme SBI Life was having the top position followed by TATA AIG & BirlaSun Life. The lowest position was of ING VYSYA.3.Vasudevan A (July- sep,2004) In this paper the author taught that the growth amd development of general Life Insurance attracted the Marine Line of business which was felt to be economically not viable for Indian Insurers as foreign exchange was involved. The later stage of twentieth century provided a solution by reasonable rating grades the government framed policies and there was a feeling that general insurance should be under the preview of government control. 4.Singh Harjit (Jan- July, 2006)In this paper the author said that Reinsurance international, multi-billion dollar industry that is vital to the financial stability of all types of insurance company. It enables insurance companies worldwide to provide insurance against risks that they otherwise would not be able to accept safety. It also realised that the Indian Reinsurance market is undergoing radical structural changes. The entry of private reinsurance companies in 2000, Indian market has started taking tentative global practices in reinsurance. The metamorphosis has begun from direct marketing to multiple distribution channels.

5.Sinha Tapen & Baqueriro Edgard (2006) In this paper the author has concluded that the two types of analysis do not necessarily yield the same premium for the option discussed: calls, swaps with and without limits and puts with and without limits. This result differ because in the case of index modeling a distribution to our data. However , the result do not differ by large amounts in most cases. Therefore, we consider our results to be robust.6.Joshi Prakesh Chandra (Dec 2008)In this paper author said that their anxiety to reach out to more customers and grab a bigger piece of the cake, insurance company branches appear to be mushrooming all over the cities. More branches entail deployment of more staff. Recruitment and deployment of personnel without adequate inputs relating to the industry, the products and related issues can have a detrimental effect on CRM. Success of top-down stategy will possible only when an exclusive CRM team ensures dissemination of the CRM Philosophy , conduct a regular CRM audit and offers suggestion and ides while filling the CRM performance report with the top management.7.Hari Kumar P.N (Sep-2009)

In this paper author said that all the awareness programmes of the SSS conducted by the LIC were ineffective in creating an awareness of the SSS among the targeted groups. In order to popularize the SSS, the LIC conducted several programmes through Radio , TV and in Village mela. But none of them did yield good results.8.Garg Kapil & Singh Yogendra (July- Dec, 2009)In this paper the author said that the perception about customer orientation and responsiveness are not up to the mark. Hence the insurance companies need to focus on the variable concerning service quality factors. The analysis has shown that the profiles of the respondent has an influence on the service quality perceptions and also have helped to identify the major service quality factors prevalent in the life insurance industry.9.Shanubhougue Ashok & Bhatt Mayank (May 2010)In this paper the author said that the government sector LIC has the major 85% in the market. Even in the private sector about 48% of the market is covered by ICICI Prudential itself. This revals that other companies have tremendous opportunities in this sector by competing with the major players.

1O.CARAYANNOPOULOS PETER , KEELY MARY (2010)In this paper author said that the impact of this change on the level and determination of insurers surplus holdings. We find that firms have not changed the level of surplus held in response to risk characteristics as delineated in the capital adequacy test. However, firms have reduce surplus holdings in jurisdictions in which automobile insurance reform has been successful, and increased surplus holdings in jurisdictions with escalating automobile insurance claims. Overall, larger firms have increased their surplus holdings since 2003, whereas smaller insurers report surplus-to-net-premium-written ratios that have been declining over time.

11.YANASE NORIYOSHI AND YUKIHIRO YASUDA(2010)In this paper author said that the We investigate the significant effects of the September 11 attacks on the Japanese stock market, one of the largest markets in the world. Although several studies have examined the impact of the attacks on the domestic U.S. stock market, few studies have analyzed their impact on the foreign insurance industry through globally well-developed reinsurance transactions. , we find that the Japanese stock market reacted to risks of theterrorism event through the global reinsurance market .12.GEALA ANTOANETA (2009)In this paper author said that the issue of deposit insurance system shouldnt be approached isolated but in connection with the other components of national safety nets. Furthermore, the national connections tend to be dismantled to the benefit of international cooperation, as the globalization set forth new and unexpected challenges amid a changing financial landscape13.THOMODARAN VARADARAJU , RAMESH MAHALINGAM (JULY 2010) In this paper author said that the age groups of the respondents had significant differences from only print advertisement regarding awareness, interest and purchase intention activities. Less than 35 age group rural people have interest to access more activities in terms of insurance information. Education level of the rural respondents did not influence to create awareness on insurance advertising and information from print, visual and web media. But their occupation had influenced only on getting interest from

print media towards insurance. Their income level also did not demonstrate influence.14.SAFAKLI VELI OKAN , GURYAY ERDAL (2007)In this paper author said that the public awareness dimension, which carries a vital significance in the efficient implementation of the deposit insurance system in TRNC, has been missing in the deposit insurance system. Furthermore, in the absence of public awareness, in TRNC, risk based premium scheme having the potential of performing similar function is not being implemented. At present, the premium charged at banks is uniform, and there is no risk assessment for individual banks. The main reasons for the lacking of an adequate public awareness in TRNC can be enumerated as follows: 1) through its previous policies and practices, the State authorities gave the impression that all the deposits always would be under guarantee.

15.AHUJA RAJEEV , GUHA-KHASNOBIS BASUDEB (2005)In this paper author explained that the promoting insurance among the low-income people who form a sizable sector of the population and who are mostly without any social security cover. Although the current reach of micro-insurance is limited, the early trend in this respect suggests that the insurance companies, both public and private, operating with commercial considerations, can insure a significant percentage of the poor. Serving low-income people who can pay the premium certainly makes a sound commercial sense to insurance providers. To that extent imposing social and rural obligations by insurance regulator (IRDA) is helping all insurance companies appreciate the vast untapped potential in serving the lower end of the market.16.TREMBLAY JACQUES, JASON WIEBE (JUNE 2008) In this paper author said that the Insurance product development has changed significantly over time. Insurance premiums and charges are frequently developed based on market positioning. Product designs are becoming more complex. Rates and charges are often guaranteed for the lifetime of the product. As a result, the actuarys role is more important than ever.

As competition increases and the product life cycle shortens, the actuary is under increased pressure to respond quickly to changes in the market place. It is their role to analyze and communicate the risk/reward dynamics of all products being sold in order for senior management to make educated decisions on the products they sell.17.G. FAULDS TYRONE, GIBSON EDWARD (SEPT 2010)In this paper author said that to provide support for an updated promulgation for mortality improvement with respect to the valuation of insurance and annuity business, and for changes in the range of margins in the Standards of Practice. research on mortality improvementfeaturing the Hardy Report commissioned by the Canadian Institute of Actuaries and the Society of Actuaries, and the Office of the Superintendent of Financial Institutions Mortality Projection Studyand guidance on future expected mortality improvement. It also outlines revised levels of margins for adverse deviations for insurance and annuity policy liabilities.18.TAN LING NYA, LIM SAM YING, NG HOCK TUAN (2010)In this paper author said that the Explicit deposit insurance has become increasingly popular, and 95 countries around the globe have adopted the safety net. Nonetheless, the question about the effects of the scheme on banking sector stability remains unanswered. In view of this, this paper investigates the effect of the introduction of deposit insurance plan on bank risks. This is especially imperative in ensuring that banking institutions are managed safely and soundly as a whole where risks and business prudence are appropriately balanced as it is paramount to maximise shareholders return and protect the interests of all stakeholders. 19.M. WILLIAM FONTA, E HYACINTH LCHOKU, E JOHN ATAGUBA (MAY 2007)

In this paper author said that explicit deposit insurance has become increasingly popular, and 95 countries around the globe have adopted the safety net . Nonetheless, the question about the effects of the scheme on banking sector stability remains unanswered. In view of this, this paper investigates the effect of the introduction of deposit insurance plan on bank risks. This is especially imperative in ensuring that banking institutions are managed safely and soundly as a whole where risks and business prudence are appropriately balanced as it is paramount to maximise shareholders return and protect the interests of all stakeholders.20. HAMADU DALLAH, GBADOMOSI AYANTUNJI , YUSUF OLALEKAN JAJUDEEN (2009)

In this paper author said that some major implications for marketing of insurances services in Nigerian businesses environment. Given that attitude is strongly linked to behaviour, marketers of insurance services targeting Nigerians are confronted with the challenge of encouraging people to embrace insurance institution and its associated benefits. Based on the findings, this paper confirms negative attitudes of Nigerians to insurance services further. But apart from this broad finding in respect of the negative attitudes to this line of business, this study suggests some specific findings based on different demographical factors of the respondents. The findings serve as inputs to marketers of insurance services on how they formulate and implement relevant marketing strategies towards addressing the nonchalant attitude of Nigerians to insurance.INTRODUCTION OF INSURANCE INDUSTRYWith the largest number of life insurance policies in force in the world Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 1560.41 billion (for the financial year 2006 2007). Together with banking services, it adds about 7% to the countrys Gross Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP.

Even so nearly 65% of the Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. A large part of our population is also subject to weak social security and pension systems with hardly any old age income security. This in itself is an indicator that growth potential for the insurance sector in India is immense.

A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and strengthens the risk taking ability of individuals. It is estimated that over the next ten years India would require investments of the order of one trillion US dollars. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain the economic growth of the country.

Since then the insurance industry has gone through many sea changes. LIC started facing competitions from many new companies which were threatening the existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

History OF INSURANCE INDUSTRYThe origin of insurance is very old. The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. The insurance came to India from UK; with the establishment of the Oriental Life Insurance Corporation in 1818.

The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge the same premium for both Indian and non-Indian livesThe Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of the nineteenth century insurance business was almost entirely in the hands of overseas companies. The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since the LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd.,

Several frauds during the 1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over the insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create the much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State led planning and development. In 1957 General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. In 1972 The General Insurance Business (Nationalization ) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. It was after this that 107 insurers amalgamated and grouped into 4 companies viz,The National Insurance Company Ltd.,

The New India Assurance Company Ltd.,

The Oriental Insurance Company Ltd. and

The United India Insurance Company Ltd.

GIC incorporated as a company.

KEY MILESTONES1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers along with provident societies were taken over by the central government and nationalized. LIC was formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

IRDA

IRDA-Insurance Regulatory Development Body

It is like Reserve Bank of India (RBI) which is the father of all banks. All the banks are regulated by RBI and have to be maintained according to it and cannot go beyond its rules and regulations.

Same is the case with IRDA, it is the regulating body over all the existing insurance companies. It checks the proper working of all the insurance companies and also checks that if the interest of the customer is secured.

IRDA Act passed in 1999 to allow and control Private Insurance Business. IRDA as a Regulating Authority established by the Government of India in 2000 to protect the interest of policyholders and to regulate and promote orderly growth of Insurance Industry.

IRDA registers a company only after satisfying itself with sound financial condition, general character of management, capital structure etc. of the promoters.

Every insurance company is to deposit 1% of Total Gross Premium in RBI (maximum 10 Crores) every year. This sum is solely for meeting liabilities arising out of policies issued by the company.

Investment of funds is regulated by IRDA Act- Investment to be made only in Central and State Government Securities (minimum 50%) and balanced in approved Investment.

Actuarial variation is to be done every year to see the Financial Health of the Company.

IRDA conducts surprise inspection and Audit.

Central Government can appoint an administrator of the company if anything goes wrong.

Submission of returns to the Central Government every year by the company.

A Life Insurance Company can not be wound up voluntarily and escape policy liability.

RESENT SCENARIO - LIFE INSURANCE INDUSTRY IN

INDIA

The life insurance industry in India grew by an impressive 47.38%, with premium income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume of LIC's business increased in the last fiscal year (2006- 2007) compared to the previous one, its market share came down from 85.75% to 81.91%.

The 17 private insurers increased their market share from about 15% to about 19% in a year's time. The figures for the first two months of the fiscal year 2007-08 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent.

With the opening up of the insurance industry in India many foreign players have entered the market. The restriction on these companies is that they are not allowed to have more than a 26% stake in a companys ownership.

Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 19 private life insurance companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. Some of these products include investment plans with insurance and good returns (unit linked plans), multi purpose insurance plans, pension plans, child plans and money back plans. INTRODUTION OF HDFC BANK

HDFC Bank Ltd. is a major Indian financial service company based in Mumbai, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of INR 1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of Rs.2,244.9 crore, up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09.HISTORY

HDFC Bank was incorporated in the year of 1994 by housing development finance corporation limited (HDFC) , India's premier housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The Bank commenced its operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's liberalization policies.

In a milestone transaction in the Indian banking industry, Times Bank Limited (promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a strong deposit base of around Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The balance sheet size of the combined entity is over Rs. 1,63,000 crore. The amalgamation added significant value to

HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower.

MERGERHDFC Bank and Centurion Bank of Punjab merger at share swap ratio of 1:29The Boards of HDFC Bank and Centurion Bank of Punjab met on 25 February, 2008 and approved, subject to due diligence, the share swap ratio for the proposed merger of Centurion Bank of Punjab with HDFC Bank. The Scheme of Amalgamation envisages a share exchange ratio of one share of HDFC Bank for twenty nine shares of Centurion Bank.

.The combined entity would have a nationwide network of 1,148 branches (the largest amongst private sector Banks) a strong deposit base of around Rs. 1,200 billion and net advances of around Rs. 850billion. The balance sheet size of the combined entity would be over Rs. 1,500 billion. Commenting on the proposed merger, Mr. Deepak Parekh, Chairman, HDFC said, We were amongst the first to get a banking license, the first to do a merger in the private sector with Times Bank in 1999, and now if this deal happens, it would be the largest merger in the private sector banking space in India. HDFC Bank was looking for an appropriate merger opportunity that would add scale, geography and experienced staff to its franchise. This opportunity arose and we thought it is an attractive route to supplement HDFC Banks organic growth. Mr. Aditya Puri, Managing Director, HDFC Bank said, These are exciting times for the Indian banking industry. The proposed merger will position the combined entity to significantly exploit opportunities in a market globally recognized as one of the fastest growing. Im particularly bullish about the potential of business synergies and cultural fit between the two organizations. The combined entity will be an even greater force in the market.Mr. Rana Talwar, Chairman, Centurion Bank of Punjab stated, Over the last few years, Centurion Bank of Punjab has set benchmarks for growth. The bank today has a large nationwide network, an extremely valuable franchise, 7,500 talented employees, and strong leadership positions in the market place. I believe that the merger with HDFC Bank will create a world class bank in quality and scale and will set the stage to compete with banks both locally as well as on a global level.Mr. Shailendra Bhandari, Managing Director and CEO, Centurion Bank of Punjab said, We are extremely pleased to receive the go ahead from our board to pursue this opportunity. A merger between the banks provides significant synergies to the combined entity. The proposed merger would further improve the franchise and customer proposition offered by the individual

Capital structure

At present, HDFC Bank boasts of an authorised capital of Rs 550 crore (Rs 5.5 billon),of this the paid- up amount is Rs 424.6 crore (Rs. 4.2 billion). In terms of equity share, the HDFC group holds 19.4% Foreign institutional Investors(FIIs) have around 28% of the equity and about 17.6% is held by the ADS Depository (in respect of the banks American Depository Shares (ADS) Issue) The bank has about 5,70,000 shareholders .It shares find a listing on the stock Exchange , Mumbai and National Stock Exchange .While its American Depository Shares are listed on the New York Stock Exchange (NYSE) , uuder the symbol HDB. SWOT of HDFC BankStrengths : -1. Right strategy for the right products.

2. Superior customer service vs. competitors.

3. Great Brand Image.

4. Products have required accreditation.

5. High degree of customer satisfaction.

6. Good place to work

7. Lower response time with efficient and effective service.

8. Dedicated workforce aiming at making a long-term career in the field.

Weakness : 1. Some gaps in range for certain sectors.

2. Customer service staff need training.

3. Processes and systems, etc

4. Management cover insufficient.

5. Sectoral growth is constrained by low unemployment levels and competition for staff

Opportunities : 1. Profit margins will be good.

2. Could extend to overseas broadly.

3. New specialist applications.

4. Could seek better customer deals.

5. Fast-track career development opportunities on an industry-wide basis.

6. An applied research center to create opportunities for developing techniques to provide added-value services.

Threats : -1. Legislation could impact.

2. Great risk involved

3. Very high competition prevailing in the industry.

4. Vulnerable to reactive attack by major competitors.

5. Lack of infrastructure in rural areas could constrain investment.

6. High volume/low cost market is intensely competitive.

AWARDS AND ACHIVEMENTS

HDFC Bank began a operation with a simple mission : to be a word class Indian Bank . we realized that only a single minded focus on product quality and service excellence world help up get there. Today ,we are proud to say that we are well on our way towards that goals .It is extremely gratifying that our efforts towards providing customer convenience have been appreciated both nationally and internationally.

Awards & Accolades 2010Verve Power List 2010 (June '10)Ms. Renu Sud Karnad featured in Verve magazines list of 50 power women.

FinanceAsia's List of Asia's Best Managed Companies (April '10) HDFC featured in FinanceAsia magazines list of Asias Best Managed Companies.

ET - Corporate Dossier List of India Inc's Most Powerful Women leaders (Apr '10)Ms. Renu Sud Karnad featured among the list of top 15 powerful women CEOs.

Reader's Digest India's Most Trusted 2009 (Mar '10)Mr. Deepak Parekh voted among India's Most Trusted by people across India in a poll conducted by Reader's Digest on a list of 100 public figures.

India Today Power List 2010 (Mar '10)Mr. Deepak Parekh featured in India Todays list of 50 Power People.

Times of India Crest List of 100 Powerful Women (Mar '10)Ms. Renu Sud Karnad featured in the business category among the List of 100 Powerful Women by TOI Crest.

Dun & Bradstreet Rolta Corporate Awards 2009 (Mar '10)HDFC selected for the fourth consecutive year as the 'Top Indian Company' AWAEDS AND ACCOLADES 2009CNN-IBN Indian of the Year 2009 (Dec '09)Mr. Deepak Parekh along with the team that revived Satyam, received CNN-IBN's 'Indian of the Year' Award in the business category.

14th Motilal Oswal Wealth Creation Study (Dec '09)Motilal Oswal Financial Services for the second time ranked HDFC as the Most Consistent Wealth Creator in its 14th Annual Wealth Creation Study, which analyses the top 100 wealth creating companies of India. HDFC is ranked as the most consistent by virtue of its 10-year price CAGR being the highest.

NDTV Profit Business Leadership Awards 2009 (Dec '09)Mr. Deepak Parekh received the 'NDTV Profit Business Leadership Award' for being part of the team that revived Satyam.Business Today's List of 30 Most Powerful Women in Indian Business (Nov '09) Ms. Renu Sud Karnad for the fifth time featured amongst Business Today's Vasudev, ChanderIndependent Non-Executive Chairman of the

Board

Dongre, SanjayExecutive Vice President - Legal, Compliance Officer

Puri, AdityaManaging Director, Executive Director

Engineer, HarishHead - Wholesale Banking, Executive Director

Sukthankar, PareshHead Credit and Market Risk and Investor

Relations

Subramanian, G.Head - Audit, Compliance

Rajan, AnanthanarayanHead Operations

Parthasarthy, AshishDeputy Treasurer

Aima, AbhayHead - Equities and Private Banking

Bharucha, Kaizad Head Wholesale Credit, Market Risk

Retail Risk

Mondal, PralayHead - Retail Assets

Bhagat, RahulHead - Retail Liabilities, Marketing & Phone

Banking

Puri, Navin Head - Branch Banking

'30 Most Powerful Women in Indian Business''AAA' rating for HDFC Deposits by CRISIL & ICRA (Aug '09)HDFC's Fixed Deposit Program has been reaffirmed the 'AAA' credit rating for the 15th consecutive year by CRISIL and ICRA

LIST OF BOARD OF DIRECTORSTABLE 4.1

PRODUCT AND SERVICES WHICH IS OFFERED BY HDFC BANK

HDFC Bank offered various services and product to the customer and all these product has its own value .so every product is important and it has its owe significance

But I have study only the insurance scheme which is offered by HDFC Bank .I study only the insurance scheme due to the time constraint therefore bank provide various services which are as follow:

FIGURE 4.1PRODUCT RANGE OF HDFC BANK

FIGURE 4.2

ACCOUNTS & DEPOSITS

FIGURE 4.3

LOANS PRODUCTS

FIGURE 4.4CARDS PRODUCTS

FIGURE 4.5INSURANCE PRODUCTS

FIGURE 4.6

FOREX SERVICES

INRODUCTIONThis chapter focuses on the methodology & the techniques used for the collection, classification & tabulation of data. It sheds light on the research problem, the objective of study & its limitations. The later part of this chapter explain the manner in which the data is collected, classified, tabulated & so as to reach on conclusive results. It is written game plan for concluding research. PROBLEM STATEMENT : To know the factors to be considered while making investment in Mutual Fund . OBJECTIVE OF THE STUDY: The project is designed with an objective that it will fulfill the companys objective as well as add value to my knowledge along with that it will give me an opportunity to have a practical experience of Mutual Fund sector . MAIN OBJECTIVES: The main objectives of this study are:-1. To study the awareness level of investors about the insurance schemes offered by HDFC Bank. 2. To analyze the satisfaction level of investor from the insurance schemes offered by HDFC Bank.

Sub Objective: The sub objective of the study are:

1. To identify the need of the investor for taking the insurance schemes.RESEARCH DESIGN : This study is based on a Descriptive research design. Descriptive research is a type of conclusive research that has as its major objective the description of something- usually market characteristics or functions.SCOPE OF STUDY: The scope has been limited to sample size of 50 respondents due to time and cost constraints. However,the geographical area of study was Jagadhri and Yamuna Nagar.COLLECTION of DATA SOURCES: After the research problem has been defined and the research design has been chalked out, the task of data collection begins. Data can be collected from either primary or secondary source. In this study although the data was collected mainly through primary sources, it was supplemented by secondary data.For the collection of primary data, the respondents were contacted personally and the tool for gathering the data was the questionnaire. PRIMARY DATA In this study a survey was conducted in which various tools were used to collect data.

These are:-

QUESTIONNAIRE In this study, data is collected with the help of questionnaire in which close-ended

questions were asked. INTERVIEW Interviews were conducted at the time of filling up of questionnaire and unstructured questions were asked. SECONDARY DATA

In this study secondary data is collected through books, magazines, journals, newspapers etc. SAMPLING FRAMEWORK SAMPLING TECHNIQUE: Non-Probability sampling.

SAMPLING METHOD: Convenient sampling method.

SAMPLING UNIT: Investors.

SAMPLING SIZE: The sample size is 50.

UNIVERSE: All investors of India.

POPULATION: All investors of Jagadhri & Yamuna Nagar.

SAMPLING AREA: Jagadhri & Yamuna Nagar..

GRAPHICAL ANALYSIS: For presently the data in an organized form graphic method has been use i.e. the data is represented in the form of Bar-Diagram

LIMITATIONS OF THE STUDY1. The first and foremost limitations was time constraints was only few days but still efforts have been made to put the picture as clear as possible.

2. The sample size is only 50 respondents, so the sample may not be truly representative of the population.

3. Samples were selected as per convenience so errors are bound to creep in the study.

MAIN OBJECTIVE 1 To analze the awarness of investors while investing in Insurance schemes.

Q1. Are you aware of the insurance plans offered by HDFC Bank?

TABLE 6.1(AWARNESS OF INVESTORS)

Children plan(CP)Pension Plan(pp)Money Back Plan(MBP)Development plan(Dp)

30%20%35%15%

FIGURE 6.1(AWARNESS OF INVESTORS)

INTERPRETATION: From the collected data it has been analyzed that 30% of the people is aware about the children plan,20% of the people aware about the pension plan,35% of the people is aware about the Money back plan ,15% of the people is aware about the Development plan while investing in Insurance Scheme.Q2.Are you aware about the terms and conditions of the policy which you have taken?TABLE 6.2 (TERMS AND CONDITIONS)

YesNo

35%65%

FIGURE 6.2 (TERMS AND CONDITIONS)

INTERPRETATION: From the collected data it has been analyzed that 35% of the people are aware about the terms and condition of the policy,65% of the people are aware about the terms and conditions of the policy which he/she invested.MAIN OBJECTIVE 2To study the satisfaction level of investor from the insurance schemesQ3. Are you satisfied with the amount charged by HDFC Bank for providing there services?

.On the basis of fund management chargesTABLE 6.3 (CHARGES(FUND MANAGEMENT CHARGES))

YesNo

40%60%

FIGURE 6.3 (CHARGES(FUND MANAGEMENT CHARGES))

INTERPRETATION: From the following data it has been analysed that the 40% of the investors are satisfied on the fund management charges, 60% of investors satisfied on the fund management charges.Q4. Are you satisfied with the morality charges charged by bank?

TABLE 6.4 (CHARGES(MORALITY CHARGES))YesNo

55%45%

FIGURE 6.4 (CHARGES(MORALITY CHARGES))

INTERPRETATION: From the collected data it has been analyzed that the 55% of the investor are satisfied with the morality charges, 45% of investor are satisfied with the morality charges.Q5. Are you satisfied by the scheme which you have taken on the basis of risk involved in it? TABLE 6.5 (SATISFACTION(RISK))YesNo

94%6%

FIGURE 6.5 (SATISFACTION(RISK))

INTERPRETATION: From the collected data it has been analyzed that 94% of the people are satisfied from the risk where as 6% of the people are not satisfied from the riskQ6.Are you satisfied by the scheme which you have taken on the basis of safety involved in it?

TABLE 6.6 (SATISFACTION(SAFETY))YesNo

96%4%

FIGURE 6.6(SATISFACTION(SAFETY))

INTERPRETATION: From the collected data it has been analyzed that 96%% of the people are satisfied from the safety where as 4% of the people are not satisfied from the safety.SUB OBJECTIVE

To identify the objective of investors for taking the insurance schemes.Q7. What is the need for an Insurance Policy?TABLE 6.7(NEED OF INVESTOR)

Return PurposeInvestment PurposeSecurity Purpose

24%36%40%

FIGURE 6.7 (NEED OF INVESTOR)

INTERPRETATION: From the collected data it has been analyzed that 24% investor need is return,36% investor need is just investment,40% investor need is security.FINDINGS

30%of the investors have knowledge about Children plan ,20% of the investors are known about Pension Plan,35% of the investors are known about Money Back Plan where as 15% investor have appropriate knowledge about Development insurance plan.

35% of the investors are known about the terms and conditions of the policy in which they invest and rest of the investors are not aware of it. 40% of the investors are satisfied with fund management charges whereas 60% of investor is dissatisfied.

55% of the investor are satisfied with morality charges whereas 45% of investor is dissatisfied.

People get attracted towards the insurance policy for safety.

94% of investors are satisfied from the risk cover by the policy taken by them where as 6% are not satisfied.

The main objective of 24% of investors while taking policy is returns,36% of the investors is investment purpose and 40% of the investors is security.SUGGESTIONS Banks should be transparent in providing information about insurance Schemes Bank need to give more consideration towards marketing of insurance schemes. Investors should read all the terms and conditions carefully before making investment. The queries of dissatisfied investors should be taken in to consideration and efforts should be made to solve them. Media should provide more information by giving proper advertisement of schemes.

REFERENCES

JOURNALS Shanbhogue Ashok (2010) ,Business opportunities for the insurance sector:An empirical study Teachers of S.P University, Indian Journal of Marketing, May 2010, Pg. No :- 52-57. Malhotra Dr. A.K ( 2004), Indian Insurance Industry: An Overview Productivety promotion July-Sep, 2004 ,Pg:- 36-44. Chopra Monika (2004), A Life of comparative Performance of Life Insurance Companies in private Sector in India Productivety promotion July-Sep,2004,Pg:-63-67 Vasudevon, A (2004),Insurance and Risk: A Profile Productivety promotion July-Sep, Pg no:-75-77

Garg Kapil & Singh Yogendra(2009), Service Quality of Life Insurance Companies: An Exploratory survey, Synthesis, Vol,6 No.2, July-Dec,2009,Pg no:-77-87.

Singh Harjit(2006), Reinsurance: A Potent tool for Strategic Decision Making, Synthesis, Vol.3, No.2, Jan-July 2006, Pg no:-66-77

Sinha ,Tapen & Baqueiro, Engard(2006), Rainfall Insurance with Derivatives, The ICFAI Journal of Derivatives Markets, Vol III, No.3, 2006, Pg no :-84-93.

Joshi,Prakesh Chandra (2008), CRM in Insurance: The New Way, Global Journal of Business Management, Vol 2, No.2, Dec 2008, Pg no:-39-45.

Hari kumar, P.N (2009), A Study on the LICs Scheme for the weaker section of the society with the special reference to social security schemes, Finance India, Vol. XXIII , No 3, sep, 2009, Pg.no:-971-974.

Thamodaran , Ramesh (July 2010) Effectiveness of information communication technology in rural insurance Business and Economic Horizon, volume 2, issue2, Pg. no:- 98-105 Geala Antoaneta (2009) The National deposit insurance system: A Market institution at the crossroads Finance and Banking , vol.1 , issue 1 ,Pg no:-55-68) Safali veli okan, Guryay erdal (2007) A Research on Designing an Effective Deposit Insurance Scheme for TRNC with Particular Emphasis on Public Awareness International Research Journal of Finance and Economics, ISSN 1450-2887, Issue 7 (2007)

Tan Ling Nya, Lim Sam Ying , Ng Hock Tuan (2010) Deposit Insurance and Bank Risks: The Case of Malaysia European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 18 , Pg no:-19-27

Hamadu Dallah, Gbadomosi Ayantunji , yusuf olalekan Jajudeen (2009) ATTITUDES OF NIGERIANS TOWARDS INSURANCE SERVICES: AN