A Project Report

On

“MARKETING OF LIFE INSURANCE PRODUCTS WITH REFERENCE TO MAX NEW YORK LIFE

INSURANCE”

Submitted in the Partial Fulfillment of requirement

Master of Internal Business (MIB)Affiliated to Ch. Charan Singh University, Meerut

Session: - 2008-2010

Submitted By:Mohammad Ubaid

MIB-III SemRoll No.- 9358016

UNDER THE GUIDANCE OF:External SupervisorMr. Jay PanwalRecruitment ManagerMNYL, Ghaziabad

Internal SupervisorDr. K.K. ShuklaIMS-Ghaziabad

INSTITUTE OF MANAGEMENT STUDIESC-238, Bulandshahar G.T. Road, Lal Quan, P.B. No.-57

Ghaziabad-201009

ACKNOWLEDGEMENT

The planning and production of the project report have been

a tedious task, but has been made easier by the advice of

Dr. K.K. Shukla who attended me and spared her valuable

time in directing and encouraging me.

Lastly I thank all those who have encouraged me in

completing this project.

It is really astonishing that the people in today’s competitive

world are still so helpful in nature. Therefore in the end I

express my deep gratitude towards all of them.

MOHAMMADD UBAID

MIB-III Sem

2

CONTENTS

Title Page No.

> Introduction of insurance 01

> Definition of insurance 04

> History of insurance 06

> Types of insurance 10

> Life insurance products 15

> Types of insurance 19

> Company profile 24

> Life insurance products 25 Of company

> Conclusion 56

> References 58

3

IntroductionOf

Insurance

4

Insurance is a tool which facilitates a small number is compensated out of funds (premium payment) collected from plenteous. Insurance companies pay back for financial losses arising out of occurrence of insured events, e.g. in personal accident policy death due to accident policy death due to accident, in fire policy the insured events are fire and other allied perils like riot and strike, explosion, etc. Hence, insurance is safeguard against uncertainties. It provides financial recompose for losses suffered due to incident of unanticipated events, insured within policy of insurance. Moreover, through a number of acts of Parliament, specific types of insurances are legally enforced in our country, e.g. third party insurance under Motor Vehicle Act, public liability insurance for handlers of hazardous substances under Environment Protection Act, etc.

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 developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years.

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in India are:

1. 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

2. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

3. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

4. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

5. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1. 1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

5

2. 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.

3. 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

4. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four 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.

6

DEFINATION

OF

INSURANCE

7

Insurance may be defined as a contract wherein one party (the insurer) agrees to pay to the other party (the insured) or his beneficiary, a certain sum upon a given contingency (the risk) against which insurance is required. Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

Insurance that guarantees a specific sum of money to a designated beneficiary upon the death of the insured or to the insured if he or she lives beyond a certain age.

The contract is valid for payment of the insured amount during: The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilization’s partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:

1. That of dying prematurely leaves a dependent family to fend for itself. 2. That of living till old age without visible means of support.

8

HISTORYOF

INSURANCE

9

In some sense it can be said that insurance appears simultaneously with the appearance of human society. There are two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, insurance can be seen in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbors, the other neighbors must help Otherwise; neighbors will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Samurai, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrick (Achaemenian gold coin weighing 8.35-8.42) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."

A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.

10

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as a center for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.

Insurance today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732.

Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.

In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.

11

In the state of New York, which has unique laws in keeping with its stature as a global business center, former New York Attorney General Eliot Spitzer was in a unique position to grapple with major national insurance brokerages. Spitzer alleged that Marsh & McLennan steered business to insurance carriers based on the amount of contingent commissions that could be extracted from carriers, rather than basing decisions on whether carriers had the best deals for clients. Several of the largest commercial insurance brokerages have since stopped accepting contingent commissions and have adopted new business models.

12

TYPESOF

INSURANCE

13

The earliest traces of insurance in the ancient world are found in the form of marine trade loans or carriers , contracts, which included an element of insurance. Evidence is on record that arrangemts embodying the idea of insurance were in Babylonia and India at quite an early period

CLASSIFICATION ON THE BASIS OF NATURE OF INSURANCE

LIFE INSURANCE FIRE INSURANCE MARINE INSURANCE SOCIAL INSURANCE MISCELLANEOUS INSURANCE

CLASSIFICATION OF INSURANCE FROM BUSINESS POINT OF VIEW

LIFE INSURANCE GENERAL INSURANCE

CLASSIFICATION OF INSURANCE FROM RISK POINT OF VIEW

PERSONAL INSURANCE PROPERTY INSURANCE LIABILITY INSURANCE FIDELITY GUARANTEE INSURANCE

CLASSIFICATION ON BASIS OF NATURE OF INSURANCE

1) LIFE INSURANCE

Life insurance may be defined as a contract in which the insurer, in consideration of a certain premium, either in a lump sum or by other periodical payments, agrees to pay to the assured, or to the other person for whose benefit the policy is taken, the assured sum of money, on to the person for whose benefit the policy is taken, the assured sum of money, on the happening of a specified event contigent on the human life or at the expiry of certain period. For life insurance, the risk ensured against is death. The life insurance company pays the sum assured to the insured in the event of death. There are several types of insurance products / policies, which have been discussed. At present, life insurance enjoys maxium scope because the life is the most important property of the society or an individual. Each and every person requires the insurance. This insurance provides protection to the family at the premature death or gives adequate amount at the old age when earnings capacities are reduced. The insurance is not only a protection but is a sort of investment because a certain sum is returnable to the insured at the death or at the expiry of a period

14

2) FIRE INSURANCE

A fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period. Normally, the fire insurance policy is for a period of one year after which it is to be renewed from time to time. A claim for loss by fire must satisfy the following 2 conditions:

> Ther must be actual loss; and

> Fire must be accidental and non-intentional

The risk covered by a fire insurance contract is the loss resulting from fire or some cause, which is the proximate cause of the loss. If damage is caused by overheating by overheating without ignition, it will not be regarded as a fire loss within the meaning of fire insurance and the loss will not be recoverable from the insurer

3) MARINE INSURANCE

A marine insurance contract is an agreement where by the insurer undertakes to indemnify

The insured in the manner and to the extent there by agreed against marine losses .marine insurance is an arrangement by which the insurer undertakes to compensate the owner of a ship or cargo for complete or partial loss at sea.

Marine insurance provides protection against loss of marine perils. The marine perils are collision with rock, or ship attacked by enemies, fire and capture by pirates, etc.

These perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight. So, marine insurance insures ship (hull), cargo and freight.

4) SOCIAL INSURANCE

Social insurance has developed to provide economic security to weaker sections of the society who are unable to pay the premium for adequate insurance. Pension plans, disability benefits, unemployment benefits, sickness insurance, and industrial insurance are the various forms of social insurance. With the increase of the socialistic ideas, the social insurance is an obligatory duty of the nation.

15

5) MISCELLANEOUS INSURANCE

The process of fast development in the society gave rise to a number of risks or hazards. To provide security against such hazards, many other types of insurance also have been developed

CLASSIFICATION FROM BUSINESS POINT OF VIEW

1) LIFE INSURANCE2) GENERAL INSURANCE

1) LIFE INSURANCE- Life insurance may be defined as a contract in which the insurer, in consideration of a certain premium, either in a lump sum or by other periodical payments, agrees to pay to the assured, or to the person for whose benefit the policy is taken, the assured sum of money, on the happenings of a specified event contingent on the human life are at the expiry of certain period.

2) GENERAL INSURANCE-General insurance business refers to fire, marine and miscellaneous insurance business whether carried on singly or in combination with one or more of them.

CLASSIFICATION OF INSURANCE FROM RISK POINT OF VIEW

1) Personal insurance- Personal insurance refers the loss to life by accident, or sickness to individual, which is covered by the policy. The insurer undertakes to pay the sum insured on the happening of certain event or on maturity of the period of insurance, and sickness or health insurance contains the element of indemnity only.

2) Property insurance-Contract of property insurance is a contract of indemnity. Proof by the assured of loss is an essential element of property insurance. The policies of insurance against burglary, home breaking or theft, etc. fall under this category. The assured is required is required to protect to the insured property. After the loss has taken place, the assured usually required notifying the police as to losses.

3) Liability insurance-Liability insurance is the major field of general insurance where by the insurer promises to pay the damage of property or to compensate the losses to a third party. The amount of compensation is paid directly to third party. The fields of liability insurance include: workmen compensation insurance, third party motor insurance, and professional indemnity insurance. There may be various reasons for arising of liability, viz., and accident of a worker at the workplace, defective goods, and explosion in the factory during the process of production and formation of poisonous gas within the factory due to the uses of chemicals and other such substances in the manufacturing process.

4) Fidelity guarantee insurance-In this type of insurance, the insurer undertakes to indemnify the assured (employer) in consideration of certain premium, for losses arising

16

out of fraud, or embezzlement on the part of the employees. This kind of insurance is frequently adopted as a precautionary measure in cases where new and untrained employees are given position of trust and confidant.

A contract of insurance is a device wherein one party in consideration the price paid to him proportionate to the risk provides security to the other party that he shall not suffer loss damage or prejudice by the happening of certain events, which may cause disadvantage to him. Insurance may be classified into different categories. The classification of insurance into different categories can be on the basis of nature of insurance, from business point of view and from risk point of view.General insurance can be categorized according to the uncertainties and events covered by the respective policies.According to the nature of business, insurance may be classified into Life insurance, Fire insurance, Marine insurance, Social insurance, and Miscellaneous insurance. From business point of view, insurance can be classified into 2 broad categories LIFE INSURANCE & GENERAL INSURANCE. On the other hand, from risk point of view, insurance can be classified into 4 categories personal insurance, property insurance, liability insurance and fidelity guarantee insurance.

17

LIFEINSURANCEPRODUCTS

18

BASIC ELEMENTS IN A LIFE INSURANCE PRODUCT

A life insurance product has, 2 basic elements:

> risk cover-i.e benefit payable in the event of death.> saving-i.e. the benefit payable in the event of survival.

Life insurance plans, which provide only risk cover during a specified peroid without any survival benefit, are called Term insurance plans. Life insurance plans, which provide for payment of policy monies only on survival of the peroid, are called pure endowment plans .

All plans of life insurance are combinations of both term insurance element and pure endowment plan stipulates that a specified Sum Assured(SA) would be paid if the life assured dies within the term selected or survives that term. The death benefit is paid by term assurance and the survival benefit is paid by the pure endowment. An annuity plan is a pure endowment plan with the condition that the SA is payable in instalments over a specified peroid of time.

The life insurance policies may be without profit policies and with profit policies. The holders of without profit policies are not entitled to share the profits of the insurer. These policyholders get only the sum assured and no bonus is given to them. The holders of the profit policies are entitled to share the profit the insurer. Since the policy holders can share the profit and the loss, they cannot be treated as co-owner of the insurance business. If there is loss, the policyholders cannot get bonus, i.e., the share in profit.

Having different elements in different policies, the policyholders are free to choose the best policies according to their requirements. It would be known that no one policy is the best policy for all the policyholders due to varience in cost, elements of investments and protection, requirements of the policyholders and availablity of the policy. Thre are following types of plans available:

WHOLE LIFE INSURANCE ENDOWMENT TYPE PLANS COMBINATION OF WHOLE LIFE AND ENDOWMENT TYPE PLANS CHILDREN’S ASSURANCE PLANS; AND ANNUITY AND PENSION PLANS.

TERM LIFE INSURANCE

The sum assured is payable only in the event of death during the term. In case of premium. These policies are usually non-participating. Since only death risk is covered, the premium is low and the contract is simple. Of late however, some companies do offer participating policies under term insurance plans.

19

Terms of life insurance comtracts are usually long, even upto 40 years or more. The term may also be restricted to as short periods. They help to provide collateral security for loans.

The term insurance policies are useful to those:

who need extra-protection for a short duration, or who need protection for long duration but are unable to purchase for the time-

being due to ill-health or lesser income, a young businessman can take the policy to save the business-disaster during

initial stage of the business, key-men’s insurances are generally on term insurance basis, a mortgagor of the proprty may be benefited by this scheme, a father can take this policy during the period of education of his child, and any such persons who are willing to provide insurance for a shorter peroid

WHOLE LIFE INSURANCE

The risk is covered for the entire life of the policyholder, which is why they are knoen as Whole Life Policies. The policy monies and the bonus are payable only to the nominee ar the beneficiary upon the death of the policyholder. The policyholder is not entitled to any money during his or her own lifetime, i.e. there is no survival benefit. This represents a serious drawback in the case of whole-life policies for they go on covering a policyholder’s life even after his life has no futher economic value for others.

The important whole life policies available in India are as follows:

whole-life policy whole life limited payments plan whole life single premium plan convertible whole life plan

ENDOWMENT TYPE PLANS

Endowment policies cover the risk for a specified perod, at the end of which the SA is paid back to the policyholder, along with all the bonus accumulated during the term of the policy. The endowment policies can be several , of which important endowment policies are discused below:

pure endowment policy ordinary endowment assurance policy double endowment policy joint life endowment plan marriage endowment plan

20

COMBINATION OF WHOLE LIFE AND ENDOWMENT TYPE PLANS

Money back(with profits)scheme

CHILDREN’S ASSURANCE PLANS

Children’s deferred assurance plan Children”s deferred assurance plan(new) Annuities and pension plans

Life insurance is to mitigate the adverse consequences that may follow either on early death of a person or on his living too long. Every possible consequence that requires to be taken care of constitutes a need for insurance.

The needs of people for life insurance an be family need. children need, old-age and special needs. To meet the needs of the people the insurers have developed different type of products such as Term Life Insurance, Whole Life insurance, Endowment Type Plans, Children’s Assurance Plans and Annuity Plans. These plans can be for an individual or a group. These plans can also be with-profit or without- profit.

21

TYPESOF

INSURANCECOMPANIES

22

Insurance companies may be classified as

Life insurance companies, which sell life insurance, annuities and pensions products.

Non-life or general insurance companies, which sell other types of insurance.

General insurance companies can be further divided into these sub categories.

Standard Lines Excess Lines

In most countries, life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is very long-term in nature — coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year.

In the United States, standard line insurance companies are your "main stream" insurers. These are the companies that typically insure auto, home or business. They use pattern or "cookie cutter" policies without variation from one person to the next. They usually have lower premiums than excess lines and can sell directly to individuals. They are regulated by state laws that can restrict the amount they can charge for insurance policies.

Excess line insurance companies (aka Excess and Surplus) typically insure risks not covered by the standard lines market. They are broadly referred as being all insurance placed with non-admitted insurers. Non-admitted insurers are not licenced in the states where the risks are located. These companies have more flexibility and can react faster than standard insurance companies because they don't have the same regulations as standard insurance companies. State laws generally require insurance placed with surplus line agents and brokers to not be available through standard licensed insurers.

Insurance companies are generally classified as either mutual or stock companies. This is more of a traditional distinction as true mutual companies are becoming rare. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. Other possible forms for an insurance company include reciprocals, in which policyholders 'reciprocate' in sharing risks, and lloyds organizations.

Insurance companies are rated by various agencies such as A.M. Best. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products.

Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well.

23

Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity (which is a 100% subsidiary of the self-insured parent company); of a "mutual" captive (which insures the collective risks of members of an industry); and of an "association" captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, it may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices.

The types of risk that a captive can underwrite for their parents include property damage, public and products liability, professional indemnity, employee benefits, employers liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance.

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:

heavy and increasing premium costs in almost every line of coverage; difficulties in insuring certain types of fortuitous risk; differential coverage standards in various parts of the world; rating structures which reflect market trends rather than individual loss

experience; insufficient credit for deductibles and/or loss control efforts.

There are also companies known as 'insurance consultants'. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies .

Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.

Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions.

Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.

24

Life insurance and saving

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. See life insurance.

In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return tax-efficient retirement account may achieve better investment return.

25

MAXNEW YORK

LIFE INSURANCE

26

COMPANYPROFILE

27

Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business.

In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital is Rs. 657 crore, which is more than the norm laid down by IRDA. Max New York Life has identified individual agents as its primary channel of distribution. The Company places a lot of emphasis on its selection process, which comprises four stages - screening, psychometric test, career seminar and final interview. The agent advisors are trained in-house to ensure optimal control on quality of training.

Max New York Life invests significantly in its training programme and each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. Training is a continuous process for agents at

Max New York Life and ensures development of skills and knowledge through a structured programme spread over 500 hours in two years. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. 201 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2005. MDRT is an exclusive congregation of the world’s top selling insurance agents and is internationally recognized as the standard of excellence in the life insurance business.

Having set a best in class agency distribution model in place, the company is spearheading a major thrust into additional distribution channels to further grow its business. The company is using a five-pronged strategy to pursue alternative channels of distribution. These include the franchisee model, rural business, direct sales force involving group insurance and telemarketing opportunities, banc assurance and corporate alliances.

Max New York Life offers a suite of flexible products. It now has 26 life insurance products and 8 riders that can be customised to over 400 combinations enabling customers to choose the policy that best fits their need.

Max New York Life was among the top 25 companies to work with in India, according to 2003 Business World magazine, "Great Workplaces In India", Max New York Life was ranked at the 20th position. This survey is the local version of the "Great Places to Work" survey carried out every year in 22 countries. Max New York Life among top five most respected private life insurance companies in India according to a 2004 and 2006 Business World survey. 

28

Max New York Life have truly built an enviable sales force. With 345 agents becoming members of the MDRT in 2006, Max New York Life has moved up to 21st rank in MDRT global list.Max New York Life has been instrumental in changing the paradigm of life insurance in India. It is the first life insurance company in India to introduce cause related marketing.

Children are at the very heart of Max New York Life's strategy. SOS Children's Villages of India is internationally recognized for its work in giving underprivileged children a wholesome life. The mission of SOS is "to help orphaned and abandoned children, by providing them with a family, a permanent home, education and strong foundation for an independent life." Its mission ties in with Max New York Life's philosophy of helping people secure the future of their near and dear ones.

Max New York Life employee visits to SOS Villages are organized regularly to generate a sense of ownership and involvement among employees.

Max New York Life has also instituted the David Allen trophy for the Most Socially Responsible Student at SOS Children's Villages. David Allen, an employee of New York Life, has donated Rs. 50,000 towards the rolling trophy, which will be awarded to a student, of the Herman Gmeiner (SOS) School at Faridabad, who displays and shows caring and a social responsibility towards his/her schoolmates or on a larger stage.

Shortly after inception, Max New York Life saw Gujarat being devastated by a ruinous earthquake. The Max India Family and New York Life International contributed Rs.86.25 lakhs towards the permanent care of children affected by the earthquakes in Gujarat.

29

INSURANCE PRODUCTSBY

MAX NEW YORK LIFE INSURANCE

30

The following products of life insurance are offered by the company

Individual InsuranceGroup InsuranceOthers

31

INDIVIDUAL INSURANCE

> PROTECTION

* WHOLE LIFE* LEVEL TERM* FIVE YEAR TERM R & C* LIFE PARTNER PLUS

> CHILDREN

* CHILDREN ENDOWMENT* STEPPING STONES

> SAVING

* LIFE GAIN ENDOWMENT* LIFE GAIN PLUS* TWENTY YEAR ENDOWMENT

> RETIREMENT

* EASY LIFE RETIREMENT* ENDOWMENT TO AGE 60

32

WHOLE LIFE

Whole Life Participating Insurance provides an insurance cover that is guaranteed for entire life. This policy also builds cash value, which can be use during your lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses.

Key benefits

> Death of life insured: sum assured plus accured bonuses> On maturity sum assured plus accured bonuses> Bonus: from third policy year bonus declared every year

Tax benefits

> PREMIUM ARE ELIGIBLE FOR DEDUCTION UPTO 100,000 PER YEAR> DD WRITER PREMIUM WILL BE ELIGIBLE FOR AN ADDITIONAL DEDUCTION

Unique features in this policy

> BONUSES> TERMINAL ILLENESS BENIFITES

LEVEL TERM POLICY

Level Term Policy (Non-Participating/Non-Convertible) In the exciting journey of life, there will be uncertainties. Additionally there are bound to be occasions when have to assume additional responsibilities as the head of the family. Max New York Life’s Level Term (Non Participating) Policy insures life at a very low cost and reduces any hardship your family may have to bear in the unfortunate event of death.

Unique features in this policy:

> PREMIUM PAYMENT ACCORDING TO CONVINENCE

33

FIVE YEAR RENEWALE AND CONVERIBLE TERM INSURANCE (NON PARTICIPATING)

Five Year Renewable and Convertible Term Insurance (Non-Participating) provides with a low cost insurance cover during its tenure of five years. It is also convertible any time into any permanent life insurance policy from MNYL, so that are able to take advantage of increasing savings when your responsibilities increase viz. on marriage, or on child birth.

KEY BENEFITS

On death of life insured: Sum Assured

Tax benefits: Entitled for the following tax benefits > Premiums are eligible for deduction u/s 80C up to Rs.100,000 / every year. > DD rider premiums are eligible for an additional deduction u/s 80D up to . Rs.10,000 /- every year > claim amount (from death) is eligible for tax exemption u/s 10(10D) Customize policy to meet specific needs:Company offer the flexibility to enhance the value of policy by using the following riders/options Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident.

Unique features in this policy: This plan can be renewed every five years and is convertible to any permanent plan at any time during the tenure of the plan. Special rates for female lives

LIFE PARTNER PLUS:

Money if policy holders live i.e. maturity benefit at age 75 Money backs i.e. a part of the Sum Assured at regular intervals to take care of periodic foreseen needs.

KEY BENEFITS

34

On death of life insured: Initial Sum Assured Plus Sum Assured of Paid up Additions through bonuses

On survival: Money backs @ 7.5% of the Initial Sum Assured will be paid on each policy anniversary from age 61 to 75.

On maturity: 100% of Sum Assured with Sum Assured of Paid Up Additions, if any.

On Surrender of Policy: Surrender value.

Limited Premium Payment term: choose to pay the premiums over 4 terms i.e. 3 years, 7 years, 10 years or 20 years.Bonus: From 3rd policy year, company declare bonus every year.

Tax benefits Entitled to the following tax benefits under Income Tax Act 1961

Premiums are eligible for deduction u/s 80C up to Rs.100, 000 /- every year. DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10, 000 /- every year. claim amounts (from death, on maturity, or Money Backs or through surrenders) are eligible for tax exemption u/s 10(10D).

Customize policy to meet specific needs:

Co. offers the flexibility to enhance the value of policy by using the following riders/options:

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Term / Term R&C Riders:: Offers additional Sum Assured to match customer needs. The R&C also allows freedom to buy a fresh insurance plan later in life. Waiver of Premium (WOP) / Pryor Riders: Waives your future premiums in case suffer total disability. The payer’s rider waives future premiums on child’s policy in case customer is disable

Unique features in this policy:

Bonuses: Withdraw in cash: bonus will be paid by cheque.

Pay premiums: bonus will be used to pay the next premium.

35

Increase Sum Assured: bonus will be used to buy additional layers of insurance cover in the existing policy by buying Paid up Additions (PUA). Can use bonuses in the following ways:

Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs.5,00,000/-) in case are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for your treatment. The balance of the sum assured and the bonuses will be payable to family on the occurrence of the Insured Event. Non Forfeiture Options: In case holder unable pay premiums, policy will lapse and we will utilize your cash value to buy insurance coverage in one of the following ways: Reduced Paid Up: A lower Sum Assured for the remaining term of policy Extended Term Insurance: The same Sum Assured for part of the remaining policy

CHILDREN ENDOWMENT:- Children's Endowment Participating Insurance to age 18/24 with whole life option enables to provide for specific needs of growing children

Child Endowment to Age 18 enables to provide for higher education of child.

Child Endowment to Age 24 enables you to provide for the best possible wedding of child and also builds cash value, which can use during to fund any unforeseen needs by taking a loan. In addition this policy is also eligible for bonuses

KEY BENEFITS

On death of life insured:  Refund of premiums plus interest.On Maturity:  Sum Assured. On Surrender of Policy:  Surrender valueBonus: From 3rd policy year, co. declare bonuses every year

Tax benefits Following tax benefits under Income Tax Act 1961: Premiums are eligible for deduction u/s 80C up to Rs.100, 000 /- every year. Claim amounts (from death, on maturity or through surrenders) are eligible for tax exemption u/s 10(10D)

Customize policy to meet specific needs: Recommend that enhance the value of your policy by buying the following rider:

36

Payor Rider: Waives future premiums in case suffer total disability or meet with an untimely death. This ensures that child will still get the lump sum money on attaining age 18 or 24

Unique features in this policy Cash Bonuses: Bonus will be paid by cheque. Non Forfeiture Options: In case holder unable to pay premiums, policy will lapse

and co will utilize cash value to buy insurance coverage in the following way: Reduced Paid Up: A lower Sum Assured for the remaining term of policy. Do not want the above, can choose to take cash value by cheque.

o Upon child attaining the age of 18, he/she will have the option to buy a permanent life insurance policy without medical underwriting (irrespective of his/her health at that time).

o On maturity of the policy, the benefits payable under the policy shall automatically vest with child – so that child receives the benefits.

STEPPING STONES:-

Stepping Stones Participating Insurance Plan is a smart way to plan for and secure child’s future irrespective of whether there or not. It provides you with regular money when it is required. This policy also builds cash value, which can use during your lifetime to fund any unforeseen needs by surrendering accumulated PUAs (explained below). In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured: Sum Assured along with additional insurance coverage purchased in way of bonuses. Five years before maturity 30% of Sum Assured, Two years before maturity – 35% of Sum Assured, at maturity – 35% of Sum Assured plus 30% of Guaranteed Sum Assured. On Survival / maturity: Five years before maturity 30% of Sum Assured, Two years before maturity – 35% of Sum Assured, at maturity – 35% of Sum Assured + 30% of Sum Assured as Guaranteed Additions plus additional insurance coverage purchased from bonuses.

Bonus: From 3rd policy year, co. will declare bonuses every year. Tax benefits: Following tax benefits under Income Tax Act 1961:

Premiums are eligible for deduction u/s 80C up to Rs.100, 000 /- every year.

37

DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10, 000 /- every year.

Claim amounts (from death, through surrenders or on maturity) are eligible for tax exemption u/s 10(10D).

Customize policy to meet specific needs:

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc.

Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident.

Term Riders: Offers additional Sum Assured to match your changing needs. The R&C also allows the freedom to buy a fresh insurance plan later in life.

Waiver of Premium (WOP): Waives your future premiums in case suffer total disability.

Unique features in this policy:

Cash Bonuses: can use bonuses in the following ways: Withdraw in cash: bonus will be paid to

by cheque. Pay premiums: bonus will be used to pay the next premium.

Increase Sum Assured: bonus will be used to buy additional layers of insurance cover in the exis

Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs. 5,00,000/-) in case are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for r treatment. The balance of the sum assured and the bonuses will be payable to family on the occurrence of the Insured Event.

Non Forfeiture Options: In case holder unable to pay premiums, policy will lapse and we will utilize cash value to buy insurance coverage in one of the following ways:ting policy by buying Paid Up Additions (PUA).

Reduced Paid Up: A lower Sum Assured for the remaining term of policy

SAVING:-

38

LIFE GAIN ENDOWMENT:-

Life Gain™ Endowment (Participating Plan) provides with an insurance cover that is guaranteed during the tenure of the policy. This policy also builds cash value, which can use during lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured:  Sum Assured plus accured bonus

On maturity: Sum Assured plus Guaranteed Addition @ 10% of Sum Assured plus accrued bonus plus terminal bonus

On Surrender of Policy:  Surrender value

Bonus: From 3rd policy year, co. will declare bonuses every year

Tax benefits:

Following tax benefits under Income Tax Act 1961:

Premium is eligible for deduction u/s 80C up to Rs.100, 000 /- every year.

DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10, 000 /- every year.

Customize your policy to meet specific needs:

Flexibility to enhance the value of policy by using the following riders/options:

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Term / Term R&C Riders: Offers additional Sum Assured to match changing needs. The R&C also allows the freedom to buy a fresh insurance plan later in life.

Waiver of Premium (WOP) / Payor Riders: Waives future premiums in case suffer total disability. The payor rider waives future premiums on child’s policy in case suffer total disability.

39

Unique feature Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs. 5,00,000/-) to you in case you are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for your treatment. The balance of the sum assured and the bonuses will be payable to the family on the occurrence of the Insured Event.

Non Forfeiture Options: In case holder unable to pay your premiums, policy will lapse and co will utilize your cash value to buy insurance coverage.

LIFE GAIN PLUS

Life Gain plus Endowment Policy provides with an insurance cover that is guaranteed during the tenure of the policy. This policy also builds cash value, which can use during lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured:

In the first 5 years - Sum Assured plus additional insurance coverage purchased from bonuses

After 5 years - Double the Sum Assured plus additional insurance coverage purchased from bonuses.

On maturity: Sum Assured plus accrued bonus plus Guaranteed Additions @ 10% of Sum Assured

On Surrender of Policy:  Surrender value.

Bonus: From 3rd policy year, co will declare bonuses every year

CUSTOMISE POLICY TO MEET SPECIFIC NEEDS

Offer the flexibility to enhance the value of policy by using the following riders/options:

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Term / Term R&C Riders: Offers additional Sum Assured to match changing needs. The R&C also allows the freedom to buy a fresh insurance plan later in life.

40

Waiver of Premium (WOP) / Payor Riders: Waives future premiums in case suffer total disability. The payor rider waives future premiums on child’s policy in case suffer total disability.

UNIQUE FEATURE:

Bonuses: can use bonuses in the following ways: Bonus will be paid by cheque bonus will be used to pay the next premium. Limited period of premium payment: so that pay only during the years that are earning, while enjoy the insurance coverage for a longer period. Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs. 5,00,000/-) to in case are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for y treatment. The balance of the sum assured and the bonuses will be payable to family on the occurrence of the Insured Event. Non Forfeiture Options: In case are unable to pay premiums, policy will lapse and co will utilize cash value to insurance coverage

TWENTY YEAR ENDOWMENT: This policy helps in the following ways: Higher education of child, or Children's marriage, or To buy a house, or To pay off a housing loan, or To create a fund for your retirement

And also provides within insurance cover to protect your family from financial uncertainties in case of your untimely death during this period.

This policy will mature exactly 20 years after buying, and during this period, it also builds cash value. This policy is also eligible for bonuses. May use the cash value and/or the bonuses to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan.

KEY BENEFITS:

On death of life insured or on maturity: Sum Assured plus accrued bonuses.

On Surrender of Policy: Surrender value.

Bonus:  From 3rd policy year, co will declare bonuses every year

Tax benefits

Premiums are eligible for deduction u/s 80C up to Rs.100, 000 /- every year.

41

DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10, 000 /- every year.

Claim amounts (from death, on maturity or through surrenders) are eligible for tax exemption u/s 10(10D).

Unique features in this policy:

Bonuses: bonuses can be use in the following ways: Withdraw in cash: bonus will be paid by cheque. Pay premiums: bonus will be used to pay the next premium. Increase Sum Assured: bonus will be used to buy additional layers of insurance

cover in the existing policy by buying Paid up Additions (PUA).

Terminal Illness Benefit: Pays 50% of Sum Assured  (subject to a maximum of Rs. 5,00,000)to in case are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for your treatment. The balance of the sum assured and the bonuses will be payable to family on the occurrence of the Insured Event. Non Forfeiture Options: In CAS unable to pay premiums, policy will lapse and we will utilize cash value to buy insurance coverage in one of the following ways

Reduced Paid Up: A lower Sum Assured for the remaining term of policy. Extended Term Insurance: The same Sum Assured for part of the remaining term

of policy.

RETIREMENT:

EASY LIFE RETIREMENT PLAN: Policy helps to save money for retirement, and also provides with an opportunity to take home a regular retirement income (i.e. pension) for entire life from chosen date of retirement. This income is a guaranteed amount, guaranteed when annuity starts. In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured:  Refund of accumulated premiums plus cash value of additional pure endowments purchased from bonuses.

On the chosen retirement date:  Sum Assured plus additional insurance coverage purchased in way of bonuses.

On Surrender:  Surrender value (minimum guaranteed @ 55% of premiums paid).

Bonus:  From 3rd policy year, co will declare bonuses every year.

42

Tax benefits:

Entitled to the following tax benefits under Income Tax Act 1961: premiums are eligible for deduction u/s 80CCC (1) up to Rs.10, 000 /- every year.

claim amounts (from death, on maturity or through surrenders) are eligible for tax exemption u/s 10(10D).

Unique features in this policy:

Bonuses: bonuses are used to purchase pure endowments, which add to the value of policy. Annuity Options: can use the maturity value to buy an annuity from co or any other IRDA approved annuity provider.

ENDOWMENT TO AGE 60: Endowment to age 60 Participating Insurance is a quasi retirement policy that helps to save primarily for retired life. It will mature on the policy anniversary after 60th birthday, and enables to use the maturity proceeds in many ways viz. Till age 60, this policy also builds cash value, and is eligible for bonuses. May use the cash value and/or the bonuses to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan.

KEY BENEFITS

On death of the life insured:  Sum Assured plus accrued bonuses plus terminal bonus On maturity (attaining age 60): Sum Assured plus accrued bonuses plus terminal bonusOn Surrender of Policy:  Surrender value.Bonus: From 3rd policy year, co will declare bonuses every year.Tax benefits:

Premiums are eligible for deduction u/s 80C up to Rs.100, 000 /- every year.

DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10, 000/- every year.

Claim amounts (from death, on maturity or through surrenders) are eligible for tax exemption u/s 10(10D).

Customize policy to meet your specific needs:

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc.

43

Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Term / Term R&C Riders: Offers additional Sum Assured to match r changing needs. The R&C also allows the freedom to buy a fresh insurance plan later in life.

Waiver of Premium (WOP) / Payor Riders: Waives future premiums in case suffer total disability. The payor rider waives future premiums on r child’s policy in case suffer total disability.

Unique features in this policy:

Withdraw in cash: bonus will be paid by cheque. Pay premiums: bonus will be used to pay the next premium. Increase Sum Assured: bonus will be used to buy additional layers of insurance cover in the existing policy by buying Paid up Additions (PUA). Purchase term insurance: bonus will be used to purchase additional coverage valid for one year.

44

GROUP INSURANCE GROUP TERM LIFE EMPLOYEE DEPOSIT LINKED INSURANCE CREDIT SHIELD UNIT LINKED GROUP GARTUITY UNIT LINKED GROUP SUPERANNAUTION

45

GROUP TERM LIFE

Key benefits:-

• Easy and convenient administration – one single master policy for all employees. • Group size of at least 25 employees. No upper limit on membership. • Policy is valid for one year and can be renewed annually. • Uniform or a graded cover can be provided on any basis chosen by subject to a

maximum of three years of salary per employee. • In case of death of an employee, due to natural or accidental reasons, the entire

sum assured amount is paid to the employer. • Additional Protection is available through riders for Critical Illness, Accidental

Death Benefits, Disability and Dismemberment. • New members can join and out going members can leave the scheme at any time

with premium adjustment.

EMPLOYEE DOPOSIT LINKED INSURANCE:

Overview of EDLI Scheme, 1976All establishments with at least 10 full-time permanent employees and to whom the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 applies, have a statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme (EDLI), 1976 to provide for life insurance for all their employees. The organization has to make a contribution @ 0.51% of each employee's wages (Basic + Dearness Allowance + Retaining Allowance), subject to a maximum of Rs.6,500 per month, to the Provident Fund Authorities as part of its compliance to the Act. The death benefit payable under this scheme is based on the provident fund account balance of the individual member, subject to a maximum of Rs.60, 000.

A solution which is simple, flexible and unique

Under Section 17 (2-A) of the Provident Fund Act, the Central Provident Fund Commissioner may, if requested to do so by the employer, by notification in the Official Gazette, exempt, whether prospectively or retrospectively, any establishment from the provisions of the EDLI scheme, if he is satisfied that the employees of such establishment, without making any separate contribution or payment of premium, enjoy life insurance benefits more favorable than the benefits under the EDLI scheme.

Max New York Life Insurance Co. Ltd offers Group Term Insurance Scheme, a unique, simple and flexible scheme, that is a far better alternative to the Employee Deposit Linked Insurance Scheme (EDLI) because of the benefits it offers to both the employer and the employee. The Employees Provident Fund Organization has approved this scheme as an alternative to EDLI.

46

CREDIT SHIELD:

Credit Shield is a protection cover, which ensures that the loan amount is paid back to the lender in case of an untimely demise of the borrower.

Convenient Structuring:

The plan can be conveniently structured in a way such that the entire loan amount or the balance loan amount is paid up in case of the untimely demise of the borrower. The premiums can also be adjusted every year according to the reducing loan balance amount.

This plan provides total peace of mind because in case of an untimely demise of the borrower, the family is not burdened with the loan.

UNIT LINKED GROUP GRATUITY:

Gratuity is a statutory benefit to the employees under the Payment of Gratuity Act 1972. After the employee has rendered continuous service for at least five years, he/ she are eligible for 15 days pay for each completed year of service. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination etc), by taking last drawn basic salary as the basis for the calculation.

Gratuity payment is a statutory liability for an organization and tends to increase as the salaries and tenure of employment increase annually. In case of big, developing & growing organization, gratuity payout can work out to a substantial amount. If the trust pays gratuity from its current revenue, it becomes difficult to meet the liability, it is therefore beneficial that a gratuity fund is set up for prudent financial planning.

Apart from being used as an effective tool to reward loyal employees, Gratuity can be considered as a powerful tool to retain employees as well. This can be done by structuring a higher gratuity benefit than the statutory requirements. Max New York Life has made the Group Insurance portfolio more robust by launching the Unit Linked Gratuity Plan.

Max New York can now offer two options of:

• Non unit Linked or Traditional Group Gratuity Plan: which facilitates systematic and steady funding of the liability

• Unit Linked Group Gratuity Plan: which facilitates steady funding and the opportunity of increased returns on investment.

Benefits of the Unit Linked Group Gratuity Plan

• Opportunity for growing the fund safely and prudently by managing the fund investments properly and maximizing the returns on the investments and thereby bringing down the costs of the funding liability in the future.

47

Multiple Flexible Investment options based on the risk taking ability of the trust.

• Life covers for full-anticipated service. • Contributions are exempted from Tax. • Total Transparency in charges and the returns declared. •Complete range of services provided: Taxation, Legal and Investment

Product Features

Eligibility

• Employer-Employee Groups • Group Size of 25 members or more • Employees between age 18 and retirement age of the company

Contributions

• MNYL will open and manage a Unit Account for the Trustees in which units are allocated and cancelled for the purpose of paying Gratuity

• The trust also pays a premium for the life insurance cover. This cover could be either the future service liability or a uniform/graded cover

• On receiving a claim, MNYL will redeem the units in the investment fund and pay the gratuity benefit

• In case of death of an insured member, MNYL will also pay the sum assured applicable for that member in addition to the gratuity benefit

• Contributions to be made towards the Gratuity Liability by the Trust to MNYL would be as per Actuarial Valuation – Post AS-15 certification

• Past Service Gratuity Liability payment can be made over a period of 5 years • The annual contributions can be made annually/half yearly/quarterly/monthly

Redirection

Annual contributions can be invested as per new fund break-up, not adhering to the initial investment break-up. This gives more flexibility for better financial planning as per specific requirements.

Charge Structure

MNYL unit linked Gratuity has one of the most transparent charge structures in the market currently. The Fund Management charge is also extremely competitive.

Fund Management Charges - The fund management charge is levied as a percentage of value of assets and shall be appropriated by adjusting the Net Assets Value.

48

Switching: MNYL UL Group Gratuity plan offers its clients a flexibility to switch funds from exiting fund to any other fund options, as per trust rules. Two free switches in one policy year can be availed by the clients.

Surrender Fee: is applicable if a policyholder wants to surrender the policy. This fee is based on the length of association with Max New York Life.

Fund optionsMNYL Group Gratuity plan is a market linked investment product, which offers 3 fund options to choose from.

Fund Options – Fund Type Description

Asset TypesConservative Fund (%)

Balanced Fund (%)

Growth Fund (%)

Govt. Securities 50-80 20-50 0-30Corporate Bonds (Investment Grade)

0-50 20-40 0-30

Cash/Call Money Markets

0-20 0-20 0-20

Equities Nil 10-40 20-60

The MNYL Advantage 1. Fund Management Philosophy 2. Total Transparency in charges, returns declared and the portfolio of investments. 3. Flexibility in premium payments, redirection of premiums, term cover. 4. Superior Service

• ISO certified Operations & Processes• Free and diversified services: legal, investment, taxation• Dedicated Relationship Manager• Effective Transaction Processing & Superior Turnaround Times• Robust Data Management with High Confidentiality Maintained

5. Most Transparent charges and Low Fund Management Charges

UNIT LINKED GROUP SUPERANNUATATION:

Why Group Superannuation Plan?

Organizations across the world help employees to safeguard their retirement era by providing various kinds of retirement benefits. Superannuation plans have been one of the most common and successful long-term investment vehicle designed to provide money during retirement.

A Group Superannuation scheme can be a good option for organizations to systematically plan for the increasingly crucial post-retirement days of their employees. The objective is to build a sizeable corpus for an employee as he approaches retirement. A part of the

49

corpus (up to one-third) can be commuted and the remaining amount used to purchase an annuity. This plan offers a total financial solution to the employer and the employee. The employer can use this as effective employee retention and a loyalty reward tool. The customized financial solutions offered by the plan, such as creation & management of Retirement Fund, availability of Annuities and flexibility through options to optimize returns helps each employee achieve his retirement goals. Moreover, the Plan is Tax efficient and offers hassle free one stop solution for fund management and annuity provision.

Why Group Superannuation Plan from MNYL?

MNYL offers a fully featured flexible superannuation plan, which is both easy to use and, provides extra and great value for your hard earned money. The product provides a win – win situation to both the employer as well as the employee. The tax benefits to the trust are availed by the employer (Employer’s contribution is treated as Business Expense), whereas the employee is provided by a healthy retirement fund. The employee, as per the trust rules, can choose from various annuity options at the time of annutisation.

Eligibility Criteria

• Applicable to Groups • Minimum Group Size is 25 Members • Minimum Entry Age is 18 Years • Maximum Entry Age is 64 Years • Minimum annual Contribution is Rs. 6000/- per annum per member • Maturity/ Retirement Age – as per Scheme Rules

Annuity Option available from MNYL

At MNYL, options available under immediate annuity are as follows:

• Life Annuity i.e. the annuity is paid to the employee during its entire lifetime. • Life Annuity + Return of Purchase Price on Death • Life Annuity but guaranteed for 5 or 10 or 15 or 20 Years

In future, MNYL may alter or add other annuity options.

• Initial Contributions as well as ordinary Annual contribution is allowed as a business expense for the employer (Sec 36 (1)

• In case ordinary annual contribution does not exceed Rs.100, 000.00 per employee per annum, no Fringe Benefit Tax is payable by the employer on the amount of contribution.

• Income received by trustees on behalf of a Superannuation Fund is exempt from tax. (Sec 10 (25) (iii))

50

• Ordinary Annual Contribution is not treated as income in the hands of the employees (Sec 17 (2) (v))

• Any contribution by employee to a superannuation fund will be entitled for deduction under section 80C.

• Any payment made from an approved superannuation fund on death of the employee or to the employee in lieu of or in commutation of an annuity on or after retirement or on his becoming incapacitated prior to such retirement or by way of refund of contribution on the death of the employee is exempt from tax. (Section 10(13))

• Annuity payments are chargeable to tax. (Section 17(1)(ii)) • If an employee commutes the annuity before retirement or being incapacitated

then the commuted value will be taxable in his hands at an average rate of tax for the preceding three years at which employee was liable to pay tax on his income.

51

OTHERS:

Rural Max Suraksha Easy Term Max Mangal Max Vriksha

Banc assurance

Super saver bond

Max amsure

* Max amsure bonus builder

* Max amsure money back

52

RURAL:MAX SURAKSHA:

Max Suraksha Policy is designed keeping in mind our social responsibility. The policy is used to provide protection to social and rural segments. It provides an insurance cover for 5 years.

KEY BENEFITS

On death of life insured:  Sum Assured

On Maturity: Return of 100% of premiums

EASY TERM:

Easy Term Policy is designed keeping in mind our social responsibility. It is used to provide protection to rural / socially underprivileged / economically backward sections viz. your servants, or the migrant laborers who construct your house, etc. It provides with an insurance cover during the tenor of the policy till age 60.

KEY BENEFITS

On death of life insured:  Sum Assured

Unique features in this policy:

A special claim concession where if the life insured dies within 6 months of the last unpaid premium, the claim will be paid to his family after deduction the outstanding premium.

MAX MANGAL:

Max Mangal Endowment (Participating) Policy is a unique plan with limited premium paying term by which can reduce your financial burden and enjoy life cover for the entire term. In case of unforeseen events this plan protects you by providing Increasing Death benefit at the rate of 6.5% of original Sum assured per policy year.

KEY BENEFITS

53

Upon Maturity of the policy shall pay 115% of the Sum assured together with Sum assured of Paid Up Additions,

Death Benefit- In case of the unfortunate death of the life insured, shall pay Death Benefit equal to an Increasing Sum assured ( 6.5% of the original Sum assured at simple rate) together with sum assured of paid up additions, if any without deducting any living benefits already paid

Bonus - The bonuses declared by the company will be used to effect further insurances by way of Paid up Additions from 3rd policy year onwards. (Please refer to our Bonus options brochure for more details).

Tax Benefit- entitled to the following Tax benefits under Income Tax Act 1961: 1. Premiums are eligible for deduction u/s 80C up to Rs.100, 000/- every year.2. Claim amounts (from death, through surrenders or on maturity) are eligible for tax exemption u/s 10(10D).

MAX VRIKSHA:

The Max Vriksha Money Back Plan (Participating) Policy is an exceptional plan that provides you with regular lump sum payments at fixed intervals to cater to periodic needs and keeps the balance for your long-term savings need. Incase of Unforeseen events this plan helps in providing additional protection by Increasing Death Benefit at the rate of 4% of sum assured per policy year.

KEY BENEFITS

Upon Maturity of the policy shall pay 115% of the Sum assured together with Sum assured of Paid Up Additions,

Living Benefits:1. An amount equal to 2% of the sum assured as specified in the schedule, which will reduce the premium payable under the policy from the fourth policy anniversary onwards until the eleventh policy anniversary. No payment in cash of this living benefit will be made.2.In addition to above, 10% of the Sum assured shall be paid in cash on the 4th and 8th Policy anniversary and 15% of the Sum assured shall be paid in cash on the 12th Policy anniversary.

Death Benefit- In case of the unfortunate death of the life insured, co shall pay Death Benefit equal to an Increasing Sum assured (4% of the original Sum assured at simple rate) together with sum assured of paid up additions, without deducting any living benefits already paid

Bonus - The bonuses declared by the company will be used to affect further insurances by way of Paid up Additions from 3rd policy year onwards.

Tax Benefit- Are entitled to the following Tax benefits under Income Tax Act 1961: 1. Premiums are eligible for deduction u/s 80C up to Rs.100, 000/- every year.2. Claim amounts (from death, through surrenders or on maturity) are eligible for tax exemption u/s 10(10D)

54

Unique features in this policy:

    The Plan at a Glance:

        Feature

Entry Age       18 - 50 years

Max Maturity Age

      66 Years

Policy Term       16 years

Minimum Sum Assured (SA)

      Rs.50, 000

Maximum Sum Assured

(per life)

      Rs.2, 50,000

Premium   Limited Regular Premium pay for 12 years

Survival benefits (as a % of S.A. )

      •  Money Backs - 10% of initial S.A. at the end of 4 th year

& 8 th year and 15% at the end of 12 th year

•  2% of S.A. from 3 rd year to 11 th year, which will reduce premium of next year.

Maturity Benefit

  115% of the S.A.+ S.A. of PUA, if any

Death Benefit       The guaranteed Death benefit will be equal to the sum insured. The sum insured will increase by 4% of the original sum insured at the simple rate at the end of every policy year

55

during policy term until the year of death of the life insured

Cash Value       Available 3rd year onwards, minimum 30% of the premiums paid excluding First Year premium

Riders available

      N.A.

Bonus       Paid Up Additions (PUA)

Non Forfeiture Options

      Reduced Paid Up

56

BANCASSURANCE:

SUPER SAVER BOND:

Super Saver Bond Policy will keep paying a part of the Sum Assured at regular intervals, to take care of periodic foreseen needs, and the balance keeps growing to take care of long term saving needs, as well as provides insurance coverage till maturity.

KEY BENEFITSOn death of life insured:  Sum Assured (without deducting any money back benefits already paid) plus additional death benefit equal to Sum Assured in case of accidental deathOn Surrender of Policy:  Surrender value.

UNIQUE FEATURES

In Built Personal Accident Benefit: In case death occurs due to an accident, over and above the Sum Assured, your family will receive an additional death benefit which is equal to Sum Assured. Non Forfeiture Options: In case unable to pay premiums, policy will lapse and we will utilize cash values to buy insurance coverage in the following way: Reduced Paid Up: A lower Sum Assured for the remaining term of policy.

MAX AMSURE:

Max Amsure Bonus Builder Policy Provides an insurance cover that is guaranteed for entire life. This policy also builds cash value, which can use during your lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses. KEY BENEFITS:On death of life insured:  Sum Assured plus accrued bonus

On Maturity (attaining age 100): Sum assured plus accrued bonuses. Money back benefit 5% of SA every year from Age 61 to 80

On Surrender of Policy:  Surrender value.Bonus: From 3rd policy year, declare bonuses every year

Option to Participate in Progressive Bonuses: Allows top up premiums to purchase additional Sum Assured in existing policy. It also generates further bonuses.

57

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc.

Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident.

Term / Term R&C Riders: Offers additional Sum Assured to match changing needs. The R&C also allows you the freedom to buy a fresh insurance plan later in life.

Guaranteed Insurability Option (GIO) Rider: Allows buying guaranteed additional insurance at seven different stages in life.

MAX ANSURE MONEY BACK:

Max Amsure Family Money Back Policy is a smart way to plan for and secure child's future irrespective of whether are there or not. It provides with regular money when it is required. This policy also builds cash value, which can use during lifetime to fund any unforeseen needs by surrendering accumulated PUAs (explained below). In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured:  Sum Assured along with additional insurance coverage purchased in way of bonuses. Five years before maturity 30% of Sum Assured, Two years before maturity – 35% of Sum Assured, at maturity – 35% of Sum Assured plus 30% of Guaranteed Sum Assured.

On Survival / Maturity:  Five years before maturity 30% of Sum Assured, Two years before maturity – 35% of Sum Assured, at maturity – 35% of Sum Assured + 30% of Sum Assured as Guaranteed Additions plus additional insurance coverage purchased from bonuses.

On Surrender of Policy:  Surrender value

Bonus: From 3rd policy year, co will declare bonuses every year.

TAX BENEFITS:

Premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year. DD rider premiums are eligible for an additional deduction u/s 80D up to

Rs.10,000/- every year. Claim amounts (from death, on maturity or through surrenders) are eligible for tax

exemption u/s 10(10D).

Customize your policy to meet specific needs

58

Dread Disease (DD) Rider: Pays a lump sum amount in case contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc.

Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident.

Term / Term R&C Riders: Offers additional Sum Assured to match changing needs. The R&C also allows you the freedom to buy a fresh insurance plan later in life.

Waiver of Premium (WOP): Waives future premiums in case suffer total disability.

Unique features in this policy:

Bonuses: Can use bonuses in the following ways:

Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs. 5,00,000/-) to you in case are diagnosed to be suffering from a terminal illness that can lead to death in 6 months; can use this money for treatment. The balance of the sum assured and the bonuses will be payable to family on the occurrence of the Insured Event.

Non Forfeiture Options: In case unable to pay premiums, policy will lapse and co will utilize cash value to buy insurance.

59

CONCLUSION

60

Insurance is a contract wherein one party (the insurer) agrees to pay to the other party (the insured) or his beneficiary, a certain sum upon a given contingency (the risk) against which insurance is required.

Life insurance sector is developing these days. The main reason behind the increasing popularity of life insurance products in the rapid flow of foreign direct investments.Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork.

The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business

As by observing Max New York Life Insurance company conclusion can be drawn regarding the product of the company.

Max New York life Insurance offers different products for the different class of society. It mainly categories on the basis of

Individual: Max New York Life Insurance offers a range of products that are designed to cater for specific individual life insurance needs.

Group: Company provide life insurance solutions to facilitate employee well being and retention.

Others: Life insurance solutions are provided for the company’s distribution channels.

So in today’s competitive world all the insurance company must follow the foot steps of Max New York Life Insurance.Life Insurance Company should diversify their range of the products on the basis of different needs of the society.

61

REFERENCE

62

Books:

Insurance and risk Management By: Dr. P.k Gupta Introduction to Insurance By: Mark. S. Dorfman Indian Insurance Industry By: D. C. Srivastva Shashank Srivastava Insurance Principles and Practice By: M.N. Mishra

Websites: www.goggle.com www.insurance.com www.maxnewyorklifeinsurance.com www.generalinsurance.com www.historyofinsurance.com www.lifeinsuranceproducts.com

Magazines: India Today Business Today Outlook

63