metlife general

8/8/2019 Metlife General

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M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 1

Table of Contents

Executive Summary.......................................................................................................2

HISTORY OF INSURANCE.........................................................................................5

INSURANCE IN INDIA.............................................................................................10

Insurance......................................................................................................................11

LIFE INSURANCE......................................................................................................13

METLIFE PO L I C I E S ..............................................................................................17

INSURANCE AS INVESTMENT..........................................................................23

Literature Review.........................................................................................................25

Life Insurance Companies Are Consistently Coming up With More New Policies....27

OBJECTIVESOF THE STUDY..................................................................................29

RESEARCH DESIGNAND METHODOLOGY.........................................................31

METLIFE PROFILE....................................................................................................34

MetLife`S ACHIEVEMENTS....................................................................................41

Chart showing Market Share of ULIPS in Kashmir region.........................................44

Growth Ranking 2008..................................................................................................45

Financial Status of MetLife..........................................................................................46

From balance sheet ............................................................................................46

BANCASSURANCE...................................................................................................48

Banks as Referral Agent of an insurance company..................................................58Insurance products distribution by banks as Corporate Agents...............................59

INCORPORATION OF METLIFE AS A JOINT VENTURE WITH J&K BANK...61

Introduction to Reinstatement......................................................................................66

Reinstatement of Policies without CI Rider.............................................................67

Data Analysis and Interpretation..................................................................................71

RESEARCH FINDINGS.............................................................................................86

CONCLUSIONS:.....................................................................................................95

Suggestions...............................................................................................................97ANNEXURE................................................................................................................99

Glossary..................................................................................................................100

QUESTIONNAIRE................................................................................................104

Bibliography...............................................................................................................107

Bibliography

Sayeem Rafiq Regd No. 10807184


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3) To know the factors responsible for the lapsed policies.

4) To go for the revival of the policies.

After analyzing the respondents views about the company a feedback were available

to the company which proved to be helpful for the company in knowing the various

strengths and the weaknesses. After knowing the company got a knowledge of the

different fields where it should work if it wants to achieve the sky heights in the

industry. Before this research it was seen that the company was good in introducing

new customers to the organization. But a company cannot be successful if it focuses

on new business only which was practiced in MetLife. The retention rate at the

MetLife was not followed upto that extent as it was needed, this was seen after the

research was conducted inspite the reinstatement guidelines followed by MetLife

were good.

The research was also helpful to the company as various policies were reinstated

and the customers also feel that their investment decision made by them were not

wrong because the company is putting its efforts to get the referrals from the

customers. The company is not keeping the customers interest away after they invest

but the continuously remain in touch with them and make the various departments

customer friendly which makes the image of the company as a customer focused

company. To be a customer friendly is a very good thing for the organization.

The study revealed that wrong selling was made by J&K Bank by the influence of

Advance Managers. This was the prime cause

It was revealed that the various policies lapsed because they were not given proper

knowledge about the product, they purchased those products whose premium was notafforded by them but the commission received by the financial advisors and the

channel sales officers was more from others due to which they advised them to buy

those products.

Limitation o f Research :



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The main limitation of the research that I feel was Shortage of time. This research

was of vast nature and six weeks time was very little for its complete study. Customer

satisfaction level cannot be fully analyze on the basis of 50 customers only, MetLife

globally perform surveys and this survey will just serve as a part of that in Kashmir

region.

A t l as t I c an s ay t ha t t o a ch ie ve i ts g oa ls o f I ns ur in g 5 M il li on

customers the MetLife can easi ly achieve i t by simply overcoming such

loopholes and there i s a lo t of oppor tuni t ies for the Company to grow

in the country l ike India.



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HISTORY OF INSURANCE

As wi th so many th ings in so many facets of our l ives , Insurance too

was born out of a primary need and shaped by socio-economic real i t ies

o f th i s t ime . The s to ry goes back to a round 2100 BC, to the anc ien t

civi l izat ion of Babylon and a business practice cal led "Bottomry". For



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all practical purposes form of marine insurance, bottomry enabled ship

owners to borrow money agains t the i r sh ips to pay for the t r ip . With

Piracy rampant on high seas, t raders and seafarers were reluctant to sai l

to o ther lands for fear of the i r lives and goods. Bottomry gave them

some semblance o f secur i ty. The a r rangement was tha t i f on ly the i r sh ip r e tu rned d id t r ade r s have to r epay to loan , a long wi th in te res t ,

which was pegged a t an above market ra te for the r i sk covered. So i f

t h e i r f a i l e d t o m a k e i t b a c k , t h e y d i d n o t h a v e t o r e p a y t h e l o a n ,

thereby recovering some or al l of the loans.

O R I G I N S

With the mar ine route being the bedrock of t rade and commerce

in those days , the prac t ice of bot tomy evolved, and spread. With the

g ro wt h o f t ow ns a nd t ra de i n E ur op e, m ed ie va l g ui ld s ( gr ou ps

organized on the basis of some common objectives, l ike traders) pooled

in money to protec t the i r members f rom loss by f i re and shipwreck, to

pay ransom if they were captured by Pirates, and to provides burial and

suppor t in s ickness and pover ty. By the middle of the 14 t h century, asev idenced by the ea rl i es t known insurance cont rac t (Genoa, 1347) .

Marine insurance was common among marit ime nations of Europe.

Lloyd's of London, the largest marine insurer today, was founded in

1688 , in a co ffee shop in London . L loyd ' s co ffee house became the

preferred place for merchants, ship owners and underwriters to transact

bus iness . Insurance development rapidly wi th the growth of Br i t i sh

co mmer ce i n t he 1 7 t h and 18 t h c en tu ri es a nd s ta rt ed b ec om in gorgan ized , a long the way go ing th rough a pe r iod o f de fau l t e r s and

closures

The Br i t ish b rough t insu rance to India in 1818 , r eple te wi th

imper ia l i s t pre judices . The Orienta l l i fe insurance company, the f i rs t

insu rance company in the coun t ry, in su red on ly European widows,

Br it i sh insu rer s even tua lly began insu r ing Ind ian l ives, bu t fo r a

p re mi um t ha t w as 1 5- 20 p er ce nt h ig he r t ha n t ha t p ay ab le b y t heB ri ti sh . I t w as o nl y i n 1 87 0 t ha t t he d is pa ri ty w as c or re ct ed . S ix



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Indians , peeved by th is second-Class t r ea tmen t, s e t up by Bombay

Mutual l i fe assurance society, and started Insuring Indian l ives at the

same cos t as Br i ti sh l ives , socia l d iscr iminat ion , in fac t turned out to

be a ca ta lys t fo r Ind ian in i t i a t ive in the insu rance sec to r. In 1909 ,

activist Ishwar Chandra Vidyasagar founded the Hindu family Annuityf un d- t he f ir st i ns ta nc e o f a p en si on - b as ed i nv es tm en t s ch em e

targeted at Indians.

As had happened in England ear l ier, a f lood of new players and

patchy regulat ions snowballed into a crisis . Several insurers defaulted

on the i r cont rac tual obl iga t ions to pol icy holders , c i t ing inves tment

losses ; some even fo lded up. The insurance Act 1938 in t roduced s ta te

contro ls on insurance , but even th is fa i led to safeguard pol icy holder interest .

N AT I O N A L I Z AT I O N

Post - independence , d iscontent agains t insurers reached a p i tch .

Bus iness was chao t ic , fo re ign insu rer were l eav ing the coun t ry and

Indian insurers dr iven by greed and bus iness considera tions werent

earning much c redibi li ty. The c ry fo r na tiona l iz ing insu rance g rew

louder. A move that insurers were of course opposed to.

On 19 t h J an ua ry 1 95 6 t he l if e o f i ns ur an ce b us in es s w as

n at io na li ze d. I n o ne s wo op t he g ov t. s na pp ed u p 2 45 i ns ur er s a nd

provident societ ies. Eight months later the LIC was formed which took

o ve r t he b us in es se s o f t he e rs tw hi le p ri va te i ns ur er s a nd s ta rt ed

expanding a t a f r ene ti c pace . Today th is mono l ith has 2100 b ranch

offices, 800,000 agents, and offers a bevy of insurance and investment

p roduc t s . L IC marked insu rance l e s s a s a r i sk management too and

more as a saving ins t rument wi th a t ax edge . A look a t LICs po l icy

p ro f i l e shows tha t ju s t 18 pe rcen t o f po l i c i e s in fo rce cu r ren t ly a re

p ro te ct io n p la ns ; i ns ur an ce c um i nv es tm en t p la ns a cc ou nt f or 6 0

percent , with the balance being pure investment plans. Sti l l , households

embraced these safe investments avenues, with the sum assured (or the

to ta l va lue o f cover ) inc reas ing f rom Rs . 1476 c ro res in 1957 to Rs .459201 crores in 1998-1999.



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Similar circumstances lead to the nationalizat ion of Non-l ife (or

general insurance). As in l i fe insurance, pre-nationalizat ion, there were

an inordinately large number of insurers, many of whom were notorious

for f loa t ing inves tment norms and delaying se t t lement of c la ims Non-

li fe i ns ur an ce w as n ati on ali ze d i n 1 97 2. A g en er al i ns ur an cec or po ra ti on ( GI C) w as s et up a s a h ol di ng c om pa ny ; a t ot al o f 1 07

p ri va te i ns ur er s w er e m erge d a nd g ro up ed t o f or m G IC s f ou r

subsidiaries.

P R I VAT I S AT I O N

Th er e w er e v ar io us r ea so ns g iv en b y th e g ov er nme nt to

n at io na li ze t he i ns ur an ce s ec to r; t ak e i ns ur an ce t o t he m as se s,

faci l i tate the f low of long-term funds (which insurance companies, by

v ir tu e o f t he b us in es s t he y a re in , h av e r ea dy ac ce ss t o) i nt o

d ev el op me nt o f i nf ra st ru ct ur e i n t he c ou nt ry, a nd s af eg ua rd t he

interests of policyholders. Towards this end, s tate insurers did develop

insurance sector, though most experts believe these monopolies could

have done much, much more.

In the ear ly n inet ies , the government went on a reforms bl inge

a nd s ta rt ed l oo se ni ng c on tr ol s o n I nd ia n i nd us tr y. I n 1 99 3, t he

government appointed the Malhotra commit tee , headed by the former

RBI governor R .N. Malho t ra , t o d raw up a b luepr in t fo r insu rance

s ect or r ef or ms . Th e Pa ne l su bmi tt ed it s re po rt a ye ar l at er ,

r ecommending p r iva ti zat ion , backed by s t if f en try gu ide lines and

str ingent regulat ions, so as to avoid a repeat of the pre-nationalizat ion

fee-for-al l .

The Insurance Regu lato ry and deve lopment Authori ty ( IRDA)

was f or me d to r eg ul ate th e s ect or a nd o ver see t he p ro ce ss o f

privatizat ion. In 2000, the IRDA started giving out l icenses, and a year

la ter the f i rs t of the pr ivate p layers s tar ted opera tions . The wheel had

come full circle.

Under state controls , the insurance sector, both l i fe and non-l ife

grew steadily. Sti l l , Indians are not adequately insured and lag behind



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most countr ies. Total insurance penetra t ion ( insurance premiums as

percentage of gross domest ic product ) i s d ismal when compared to i t s

economic standing; just 2 percent of the populat ion

h a s s o m e f o r m o f l i f e i n s u r a n c e . B u t i n t h i s h u g e g a p l i e s a h u g e

opportunity, which is why private insurers are queuing up.I n m an y w ay s, t he r e- en tr y o f p ri va te i ns ur er s h as m ar ke d a

s ec on d c om in g f or t he s ec to r. I n j us t t hr ee y ea rs t he s ec to r h as

u nd ergo n e a m ak eo ve r, o ff er in g t he f ru it s o f a f re e m ar ke t; m or e

choice , be t ter service , quicker se t t lement , t ighter regulat ions, greater

awareness. State insurers have been compelled to get their act together.

And, to think of i t , these are st i l l very early days

INSURANCE IN INDIA



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InsuranceDefinition and Meaning

To insure means to make a contract that promises to payer secure payments of a

specified sum of money in case of accident, damage, loss, injury, death or any other

event taking place.


1818 The British introduce life insurance to India, with theestablishment of the Oriental Life insurance company inCalcutta.

1850 Non-life insurance debuts, with Triton Insurance Company.

1870 Bombay Mutual Life Assurance Society is the first Indian-

owned life insurance business1907 Indian Mercantile Insurance is the first Indian non-life insurer.

1912 The Indian Life Assurance Companies Act enacted to regulate

the life insurance business

1938 The Insurance Act, which forms the basis for most current

insurance laws, replaces earlier Act.

1956 Government Steps up LIC.

1958 Life insurance nationalized government takes over 245 Indian

and foreign insurers and provident societies.

1972 Non life insurance nationalized; GIC set up.

1993 Malhotra committee headed by former RBI governor R.N.

Malhotra, setup to draw up a blue print for insurance sector

reforms.

1994 Malhotra committee recommends reentry of private players,

autonomy to PSU insurers

1997 Insurance regulator IRDA (Insurance Regulatory and

Development Authority) setup.

2000 IRDA starts giving licenses to private insurers;ICICI prudential and HDFC standard life first private life

insurers to sell a policy

2001 Royal Sundaram alliance first non-life insurer to sell a policy

2002 Banks allowed to sell insurance plans; as TPAs enter thescene, insurers start setting non-life claims in the cashlessmode


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The Dictionary of Business and Finance has defined insurance as a form of

contract or agreement under which one party agrees, in return for a consideration,

to pay an agreed amount of money to another party to make good a loss, damage or

injury to something of value in which the insured has a pecuniary interest as a

result of some uncertain event . It is a device by which the loss likely to be caused by an uncertain event is spread over a number of a person who is exposed to it and

who proposes to insure themselves against such events.

MEANING OF INSURANCE

From the above definition, it becomes clear that insurance is a voluntary

agreement between two parties , viz. the insurer and the insured the former tocompensate the latter against the loss suffered by him on the happening of an event.

Thus , it is a device theough which the loss is spread over a large number parties.

Insurance is the undertaking (assurance) given by a company , society or the State to

provide safeguard against loss, provision against sikness, death etc. in return for a

regular payments called premia (plural of premium). The person or company which

undertakes to make payment in case of loss etc. is called the insurer and the person to

whom such payments will be made is called the insured. The person who pays the

premiums or premia is called insurant. The meaning of insurance can be well

understood from the following example of fire insurance.

Suppose there are ten houses in a particular locality costing Rs 1,000 each. On

an average each year one house gets completely destroyed by fire. This means the

unfortunate owner whose house catches fire has to suffer a loss of Rs 1000. Instead,

this loss can be spread over all the ten owners by means of insurance. By providing

fire insurance, a sum of Rs 100 ( in the form of premium) can be collected from each

owner and the total amount Rs 1000 so collected can be given to the unfortunate

owner to reconstruct the house. In this way, each year one house can be built. Each

owner will annually pay Rs 100 for ten years. Thus, the loss is spread over all the

owners equally. In real practice, however, it is in proportion to the value of insurance.

Thus, insurance is a device by which the loss likely to be caused by an unforeseen

event is spread over a large people who are exposed to it and who proposed to

insurance themselves against such an event.

From the legal point of view, insurance is based on a contract between two parties. It is a written agreement to make good some loss, damage or injury .The terms



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and conditions agreed to are stated in the contract which is known as insurance policy.

In this way, the risk of loss is transferred from the insured to the insurer. Insurance

has nowadays become so popular that practically everything from a pin to a giant

structure can be insured against a possible risk.

Like any other contract, the contract of insurance must also satisfy the

following conditions:

1 There must be an agreement between the two parties, the insurer and the

insured.

2 The agreement called insurance policy must be in writing.

3 The parties to the agreement must give their free consent to all terms ad

conditions of it.

4 The parties must be competent to enter into contract

5 There must be mutual consideration

6 The object of the contract must be lawful.

LIFE INSURANCE

Of al l forms of insurance, l i fe insurance or assurance occupies a

p rominent p lace in a l l wa lks , o f l i fe . A lmos t every wage-ea rne r i s

n ow ad ay s i nt er es te d i n t ak in g l if e i ns ur an ce . I t h as m ad e s uc h a

tremendous progress that i t has occupied a leading posit ion in the f ield

of insurance . This i s because the r i sk involved is cer tain . The event i s

bound to happen soon or la ter, e .g . death . Hence somet imes the term

" As s ur an ce " i s u se d i ns te ad o f t he t er m i ns ur an ce . A c on tr ac t o f

assurance guarantees the payment of a speci f ied sum of money to the

assured on the happening of a specif ied even. Hence l ife assurance Lifeinsurance or assurance i s def ined as " a contrac t by which the insurer,



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i n c on si de ra ti on o f a c er ta in p re mi um , e it he r i n a l um p s u m o r b y

pe riodic payments , under takes to pay ce rt a in sum of money to the

assured on his reaching " a par t icular age or to those ent i t led to i t in

the event of h is death" . Thus , l i fe insurance i s a contrac t be tween an

insurance company and the insured whereby the insurer , inconsiderat ion for a premium, undertakes to pay a certain sum of money

on the death of the insured or n expiry of a st ipulated period whichever

occurs ea r l i e r. S ince each one o f us , du r ing our l ives a re f aced wi th

numerous r i sks f a il ing heal th, f inancia l lo sses, acciden t s and even

fatal i t ies , our inst incts drives us to cover ourselves against those r isks.

Though an insurance cover can ' t protec t you agains t emot ional losses

ar is ing out of these r i sks , i f sof tens the economic cr is i s tha t usual ly

accompanies these losses. Contract of l i fe insurance is mainly based on

two pr incip les , v iz . , those of u tmost good fa i th and insurable in teres t .

The pe rson who wan ts to t ake our l i f e insu rance po l i cy mus t possess

insurable in teres t in the l i fe he wishes to get assured.

T he re fo re , a p er so n c an t ak e o ut a l if e i ns u ra nc e p ol ic y f or

h im se lf o r h is w if e, h us ba nd , s o n, d au gh te r, p ar en ts o r a ny o th er

re la t ive in whose l i fe he or she has insurable in teres t . Li fe assurance

contact is not a contract of indemnity. I t is a contract for payment of a

specif ic amount because ac tual loss of human l i fe cannot be measured

in terms of money.

Life insurance differs from other types of insurance in several respects .

First of al l , i t is no protection to the l i fe of insured person. I t is only a

cover under compulsory saving is provided. I t i s a k ind of channel to

mobil ize smal l savings in to inves tment . Thus , i t promotes savings andi n v e s t m e n t . I t i s i n t h e f o r m o f a f i n a n c i a l a i d o f t h e f a m i l y o f a n

insured person in the event of his premature death. In case, he survives

t h r o u g h o u t t h e t e r m o f t h e p o l i c y, h e i s p a i d a l u m p s u m w h i c h i s

no th ing bu t h i s own sav ings kep t wi th the insu rance company in the

form of premiums deposited. Secondly, in l i fe insurance, the amount of

po l i cy i s ce r t a in ly payab le by the insu re r sooner l a t e r excep t in the

ci rcumstances of controvers ia l death of the assured. Third ly, the term

of a l i fe insurance contrac t i s suff ic ient ly long such as 20 years or 25



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dispute regarding the se t t lement of c la im, the mat ter i s referred to the

court for arbitrat ion purpose.

THE REAL CONCEPT OF INSURANCE

A f inanc ia l p l anner once sa id th i s abou t l i f e insu rance buy ing

habi t s o f Indians , they dont buy insu rance , and i t s so ld to them.

Unfortunately, but t rue. Individual awareness and understanding of l i fe

insurance products is extremely low, and many among the insured dont

even know whether the l i f e insu rance po li cy they own mee t s thei r

insurance needs, and in large context , their personal f inance needs, . In

most cases, chances are, they could be doing better.

The f i r s t and the most important s t ep towards doing be tt e r

involves being f inancial ly being f inancial ly l i terate, and having, at the

leas t, an e lementary understanding of l i fe insurance i s a l l about . This

means being aware of the var ious types of insurance products on offer

in the marke t , a s we l l a s hav ing the ab i l i ty to unders t and ones l i f e

insurance needs and f ind appropriate f i ts .

Li fe insurance i s chiefly a r i sk management tool , meant to offer

f inancial protection to your dependants in the unfortunate event of your

death. If you are adequately insured, your l i fe insurance should enable

your dependants ( Spouse , Chi ldren , parents) to mainta in the i r current

l i f e s ty le and pursue the i r l i f e goa l s t i l l such t ime as they a re in a

pos i tion to se t up an a l ternat ive income s t ream by themselves. That s

the basic purpose of l i fe insurance.

But in India, as in most other developing markets , l i fe insurance

h as c om e t o r ep re se nt m or e t ha n j us t r is k c ov er. T he b es t s el li ng

insurance p roduct s in the market doub le a s inves tment op tions and

offe r a t tr act ive t ax b reaks. In f act , i t s because o f th is two- in-one

p ro fi le t ha t t he y a pp ea l t o t he a ve ra ge i nd iv id ua ls w ho s ee ks

convenience in personal f inance matters .



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METLIFE PO L I C I E S

B as ed o n t he ir o bj ec ti ve , b as is p la ns o ff er ed t o i ns ur er s c an b e

classi f ied under three broad ca tegor ies: pure insurance products ( te rm

plans) , pure investment products (pension plans) and investment-cum-

insurance p roduc t s ( endowment , money-back , Inves tment -cum-

insuran ce products (endowment, money-back, whole-life and unit- linked

insurance plans). Increasingly, insurers are launching hybrid variants of these plain vanil la plans.

T E R M P L A N S

Term plans are the pures t form of insurance . These are no-f r il l s

policies that cover only the risk of your death. In the event of your death

during the policy term, your nominee receives the cover amount . In

insurance parlance holders , mutual funds to unit holders , automobile



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clubs to members, and so on. Factor in such freebies while computing

your life cover.

E N D O W M E N T P L A N S

While term plans cover jus t the r i sk of death , endowment p lans

also offer return on the premiums paid by you. So, i f you die during the

policy term, your nominee gets the sum assured plus some returns; if you

survive the policy term, you st i l l gets back the sum assured and returns.

As much a s this mo ney if you live "Philoso phy is an enticing

proposit ion, i t comes at a price; high premiums, which drag down the

returns from endowment plans, to barely 4-6 percent a year.

In an endowment plan, you pay premiums for pre-defined tenure

and sum assured. The premium will depend on your age, the sum assured,

the plant tenure and the nature of returns. A portion of premium paid by

you is inves ted by the insurer on your behal f. Another port ion goes

towards. Meeting the insurer administrat ive expenses, this lowers the

effective yield on your investment in endowment plans.

WHOLE-LIFE PLAN :

The three ca tegor ies of insurance p lans ment ioned above provide you

l if e c ov er o n ly f o r a d e fi n i t e p e r i o d , u p t o a c e r t a in a g e ( g e n e r a l l y,

7 0 y e a r s ) W h o l e - l i f e p l a n s , o n , t h e o t h e r h a n d , a n d ( ge ne ra ll y, 70

yea r s ) Whole - l i f e p lans , on , the o the r hand , and p rov ides you cover

through your l i fet ime-the only class of insurance policies to do so.

Typical ly, whole- l i fe p lans are s t ructured such the pol icyholder

has the opt ion to pay premiums up to a cer ta in age ( refer red to as the

matu r i ty age , the insu re r p rov ides you the op t ion to e i the r con t inue

through your l i fe t ime ( for which no fur ther premiums wi l l have to be

paid) or encash the maturi ty benefi ts (sum assured plus bonuses) . Some

insure r s do g ive the op t ion to encash the bonus dur ing t e rm i t se l f ,



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which can serve as a useful income s t ream dur ing your la ter years , i f

you so desire.

But do you rea l ly need l i fe cover through your t ime? Typical ly,

y ou r l if e i ns ur an ce n ee ds s ta rt t ap er o ff a ft er t he a ge o f 5 0. You r

children are earning and probably in need of l i fe cover themselves.

You yourse l f would have accumulated , or are wel l on your way

to accumulating, a sizeable nest-egg to see you through your ret irement

years . Only i f you have f inancia l dependants or have an income s team

to protect during your post-ret irement year does i t make sense to buy a

whole-l ife policy.

UNIT- LINKED INSURANCE PLANS

In insurance-cum-inves tment p lans of the k ind l i s ted above, you have

l it tl e s ay i n w he re y ou r m on ey b e i nv es te d. You r i ns ur er t oo i s

governed by inves tment res t r ic t ions ; i t can inves t jus t 10 per cent of

the premium paid by you in equi ties ; the grea ter chunk of 90 per cent

has to be inves ted in deb t paper. Whi le such re s t r i c t ionsa re int ended

t o e ns ur e s af et y o f y ou r i nv es tm en t, t he y a ls o l ea d t o r ig id it y i n

i nv es tm en t a nd r ei n i n y ou r r et ur ns , t o s in gl e d ig it s. U ni t- li nk ed

insurance p lans ge t a round such rest r ic t ions, by g iving you g rea ter

control over where your premium is invested.

Th ink o f them as insu rance p lans tha t doub le a s mutua l funds .

The annual premium you pay on uni t l inked plans i s l inked to the sum

a ss ur ed a nd t he p ol ic y t en ur e. I n t he i ll us tr at io n g iv en b el ow f or

e x a m p l e , f o r a s u m a s s u r e d o f R s . 1 l a k h o n a 2 0 - y e a r p l a n , t h e

premium payable is Rs 6,000 a year. In the f irst year, typically, around

20 per cent of the premium is deducted by the insurer towards your r isk



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cover and to meet i t s own adminis t ra t ive expenses ( th is f igure drops

gradually through the plan term, tapering off at around 5 percent) . The

balance 80 per cent in the f i rs t year (more in the subsequent years) i s

inves ted in an inves tment p lan of your choice , and your are a l located

un i t , based on the p reva i l ing ne t a s se t va lue (NAV) o f the p lan youhave opted for. Just l ike in a mutual fund.

The inves tment p lans on offer cover the r i sk reward spect rum.

You c an c ho os e f ro m i nc om e p la ns ( hi gh o n d eb t, l ow o n e qu it y) ,

growth plans (high on equity, low on debt) and balanced plans (roughly

equal distr ibution between debt and equity) .

Insurers , based on the h is tor ica l performance of the i r p lans and

thei r r e tu rn expec ta t ions, t end to p roject a r ange o f r e tu rns fo r each

p lan . Take no te tha t these a re jus t guess t ima tes - wha t end up wi th

could be higher or lower, depending on your plan's performance.

Yo u c a n s w i t c h f r o m o n e p l a n t o a n o t h er f r e e o f c o s t o n c e a y ea r (a

nominal amount i s charged for addi t ional swi tches) . So, i f you th ink

s tocks a re go ing cheap , you can move to the g rowth p lan ; o r, i f you

think s tocks are overvalued, you can move your money to the income

plan . Thus , unl ike endowment p lans , you can contro l your inves tmentin unit- l inked insurance plans.

Uni t -l inked p lans a l so enab le you to pe riodical ly moni tor the

pe rfo rmance o f your inves tmen t . Insu rer s decla re the NAV of the

various p lans pe riodical ly-general ly, once in th ree months. Ex it ing

these p lans i s a l so eas ie r and i t doesn ' t i nv i t e p roh ib i t ive pena l t i e s .

Af te r a lock in pe r iod (genera l ly, one yea r ) , you can wi thdraw your

uni ts anyt ime, in par t or in fu l l , a t the then-prevai l ing NAV; your l i fe

cover wi l l be r educed accord ing ly , You can a l so make inc rementa l

inves tmen t s any t ime , and add a co r respond ing amount to your l i f e

cover.

By thei r very nature , uni t - l inked insurance p lans are meant for

individuals who understand invest ing and the stock market but prefer to

l ea ve i t t o t he e xp er ts t o d o a ct iv e m on ey m an ag em en t ; t he y a re

prepared to forfei t assurance on returns for a chance to take home more

than what a conventional endowment plan would offer.



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Th e c as e to p re fe r u ni t- lin ke d p la ns o ve r co nv en tio na l

endowment p lans i s compel l ing . Insurance p lans are long- term plans ,

wi th tenures s t re tching to 10, 15 , 20 years-dura t ions tha t g ive a good

chance to r eap the t rue r e tu rns po ten t i a l o f equ i t i e s . In endowment

p lans, though your money s tays locked for s imi lar lengths of per iods .At least 90 percent of i t is invested in low yielding debt instruments, as

a r es u lt o f wh ic h re tu rn s fr om t he m ar e p e d e s t r i a n . I n o t h e r w o r d s ,

e n do w me n t p l an s d o n ' t m a xi m iz e returns, especially for

knowledgeable investors. Unit- l inked plans offer that possibi l i ty

PENSION PLANS

P en si on p la ns d if fe r f ro m t he f iv e t yp es o f i ns ur an ce p la ns

mentioned above in a fundamental way: not al l of them offer l i fe cover.So, why are we talking about them here? Because pension plans feature

among the bevy o f p roduc t s o ffe red by insu re r s and a re p i t ched as

r et ir em en t p la nn in g s ch em es , s im il ar t o o th er i nv es tm en t- b as ed

insurance plans.

P en si on p la ns a re i nv es tm en t o pt io ns t ha t l et y ou s et u p a n

income s t ream in your pos t - re t i rement years by rout ing your savings

through an insurer, who invests i t on your behalf for a fee. The precise

re tu rns you wi l l ge t depend on seve ra l f ac to r s : your age when you

b eg in i nv es ti ng , t he c on tr ib ut io ns y ou m ak e, y ou r i nv es tm en t

preferences based on your r isk profi le , the age at which your want the

money to s tar t coming back to you, and the number of years for which

you want the returns.

Immediate or deferred? The payback f rom pens ion p lans genera l ly

takes the fo rm of an annu i ty you a re pa id a ce r t a in sum every yea r.

There are two types of annuit ies, depending on when the insurer begins



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the annui ty paybacks . With an immedia te annui ty, the payments s tar t

the year you buy the contrac t . You hand over a lump sum (Say, your

superannuat ion benef i t s ) to your insurer and choose the per iodic ity of

payments and the number of years for which you want a pension, based

on your assessment of your l i fe expectancy and needs of your f inancialdependants. Typically, this option would appeal to those who ret ired or

are about to ret ire, are looking to set up an immediate, regular income

stream, and feel i l l -equipped to handle their investments on their own.

T he o th er t yp e o f a nn u it y i s a d ef er re d a nn ui ty, w he re in t he

annu i ty payments a re de fe r red fo r l a t e r yea r s ( a t a p rede f ined age o f

v es ti ng , a s i t i s c al le d) . D ur in g t he a cc um ul at io n p ha se , y ou r

i n v e s t m e n t s e a r n a r e t u r n , a n d g r o w w i t h o u t b e i n g t a x e d - u n t i l y o ureceive your annu ity payments. Consequent ly, investment s in we l l-

managed annui ty p lans have the potent ia l to grow substant ia l ly over a

long per iod. However, you are l iable to tax (a t appropr ia te s lab ra tes)

on your annui ty wi thdrawals , which are t rea ted as income. Therefore ,

de fe r red annu i t i e s make f inanc ia l sense i f you ' r e l ike ly to move to

lower tax bracket af ter your re t i rement .

Defe r red annu i ty schemes en fo rce a savings d i sc ipl ine : un likewi th se l f managed inves tments , you are commit ted to making per iodic

payments . Addi t ional ly, s ince these a re conce ived o f a s long- t e rm

i nv es tm en t v eh ic le s, p re ma tu re w it hd ra wa ls i nv it e p ro hi bi ti ve

penalt ies, so i t ' s important to st ick with them; only then wil l you also

benef it f rom the power o f compound ing . Increas ing ly, in su rer s a re

packing in a few options that provide greater f lexibil i ty to your pension

plan.

Participative or unit-linked? The most important among this relates to

where your money is invested and by extension, how much returns you

can expec t . Based on the su re ty o f r e tu rns (which i s r e f l ec ted in the

manner in which these p lans a re s t ruc tu red) , pens ion p lans can be

classif ied as part icipative or unit- l inked. In a part icipative plan, at the

t ime o f inves t ing , the insu re r wi l l i nd ica te (no t a s su re ) the annu i ty

amount you are l ikely to receive during the benefi t period.



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No such indicative assurances are given under unit- l inked pension

plans . Your contr ibut ions are d i rec ted to an inves tment p lan of your

choice . For each inves tment you make, you wi l l be g iven some uni ts ,

b as ed o n t he s ch em e' s t he n- p re va il in g N AV. A s i n u ni t- li nk ed

insurance p lans , you can choose f rom a va ri e ty o f scheme p ro f i le s(typically, income, growth and balanced) and make a free switch once a

y ea r ( a n om in al c ha rg e i s l ev ie d f or a dd it io na l s wi tc he s) . E ac h

c on tr ib ut io n m ad e b y y ou w il l e nt it le y ou t o a dd it io na l u ni ts .

D ep en di ng o n t he p er fo rm an ce o f y ou r s ch em e, t he v al ue o f y ou r

i nv es tm en t w il l a pp re ci at e o r d ep re ci at e. P en si on p la ns f ac il it at e

disc ip l ined, long- term inves t ing-one of the p i l la rs of weal th crea t ion .

E ac h y ea r, y ou s et a si de a c er ta in , p re -s p ec if ie d s um t ow ar ds y ou

re ti r ement k i tty. Th is money says inves ted fo r long pe riods o f t ime ,

reap ing the benef it s o f compound ing . P rematu re wi thdrawal s invi t e

prohibit ive penalt ies- typically; you lose 7 percent of the current value

of your inves tmen t i f you wi thdraw wi th in a yea r, 3 .5 to 5 pe rcen t

w it hi n 3 y ea rs a nd 3 .5 p er ce nt a ft er t hr ee y ea rs . O n r ea ch in g t he

vest ing age, you can withdraw your money. Alternatively, you can use

it ( in part or in ful l) to buy a part icipative annuity, from your exist ing

insurer or from another insurer. The variable option gives you a play on

e qu it ie s, a nd t he re fo re h as t he p ot en ti al ( bu t n o a ss ur an ce ) t o

outperform the f ixed- re turn opt ion. I t ' s a r i sk- re turn t rade-off , and

you have to f ind your f i t .

Some insure r s , on some o f the i r p l ans , g ive you the op t ion to

bundle l i fe insurance a long wi th these pens ion plans . You can ch oo s e

t h e a m o u n t o f l i f e c o v e r y o u w a n t , b a s e d o n w h i ch a premium

will be deducted from your contribution, which wil l make a differenceto your maturi ty amount: I t wil l show up as marginally lower annuit ies

in part icipative plans and lower sum invested in unit- l inked plans

INSURANCE AS INVESTMENT

Endowment p lans are the bes t se l l ing l i fe insurance product in

the country. This single fact says a lot about how most Indians who get

themselves covered l ike the i r insurance products to be : insurance cum

investment plans. Individuals have been known to banks on endowment



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plans to get their l ives insured, save on tax, build a ret irement corpus,

and fund the i r ch i ld rens educa t ion and among o the r th ings . Bu t a re

th ey ma ximi zi ng t hei r r et ur ns , o r c an th ey d o b et te r, wi th ou t

compromis ing on the l i fe insurance benef i t s? In o ther words , do l i fe

insurance plans make good investments?The answers to these ques t ions are not s t ra ight forward, g iven

the number of factors that influence returns on your investments. These

include the impossibil i ty of predict ing interest rates and tax rates over

twenty years or more-tenures typically of insurance contracts .Yet , with

some realist ic assumptions, i t is possible to assess if endowment plans

make good investments.

THE RETURN EQUATION

I l lustrat ion : The case of a healthy 30- year old male who wants l i fe

cover of Rs 5 lakh for 20 years. He has two options before him. The

first is to buy an endowment plan which gives him l ife cover of Rs 5

lakh by way of a term plan ( the cheapest l i fe cover) , and invest the

premium differential in investments of his choice.

We have cons ide red Insurance p lans f rom LIC, the coun t ry s

larges t Li fe Insurer. The endowment p lans i s Endowment Assurance

Plan, in which he wil l have to pay an annual premium of Rs 23,978. the

term plan i s Jeevan Anmol , in which a cover of Rs 5 lakh can be had

fo r a p remium of Rs 1 ,528 a yea r. The d i ff e ren t i a l o f Rs 22 ,450 i s

invested in var ious ins t ruments . In order to g ive an idea of the re turn

possibi l i t ies , we looked at three instruments that span the r isk- rewardsspect rum: PPF( r i sk-f ree , modera ted re turns) , debt funds ( modera te

r isks, modera te re turns) and equi ty funds ( h igh r i sk , h igh re turn( . In

an endowment plan they declare an annual bonus of Rs 50 per Rs 1,000

sum assured a rea l i s t ic assumpt ion through the term yie lds Rs 10

lakh ( tax f ree) the end of the term, which t rans lated in to a re turn of

6.6 per cent a year. Thats s ignif icantly less than what in other options

wo ul d y ie ld , e ve n i f t he p re mi um d if fe re nt ia l w as i nv es te d i n a

comparable r i sk-f ree ins t rument , l ike the 8 per cent PPF; the re turns



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would increase further if the premium differential was able to earn the

his tor ica l re turns debt funds and equi ty funds has been known to g ive

over such long periods.

THE ROAD AHEAD

Returns from endowment plans have fal len sharply; between 1999and 2005, bonus rates have dropped from 9 percent of sum assured to 4

percent and these could drop even further

FALLING RETURNS

There are guidelines on where l i fe insurer can invest the money they

collect by way of premiums from you on endowment plans. Around 90

per cent of i t is to be invested in safe debt instruments, leaving just 10

percent for the high yielding asset class that is equit ies. I t fol lows that

profi ts of insurers wil l closely track returns from debt paper.

Literature Review

1. M. ShriNivas Osmani a University Hyderabad , 2008

This s tudy was a modes t a t tempt to analyze the causes fo r l apsa tion

af ter pr iva tiza t ion on the bas is of the exper iences of the funct ionar ies

l ike b ranch managers , deve lopment o ffi cer s , Agency managers and

insurance agents (CSOs) who are the core marketing staff for MetLife

India Ins. Co . Pv t. L td. Af te r p r iva ti zat ion s ign i fi can t p rogress has

taken p lace in Indian insu rance secto r e spec ia l ly in l i fe insu rance

business. However st i l l lot of potential for l i fe insurance consumption

i s a va il ab le i n I nd ia a s t he I nd ia 's L if e I ns ur an ce p en et ra ti on a nd

densi ty i s low when compared to Asian average or wor ld average . In

s pi te o f r ap id p ro gr es s t he s ec to r i s s uf fe ri ng w it h h ig h r at e o f lapsation of policies . This s tudy reveals tha t forced se l l ing of pol icies

wi thout car ing for matching of MetLife products wi th requirements of

the policy holders plays a vi tal role in lapsation of policies in the f i rs t

year of policy l ife. This is happening due to the fact that beneficiaries

are unaware about the insurance products and their comparative meri ts

and l imitat ions. In addit ion the services after sale of policies are not as

pe r the r equ i rement s o f the po l i cy ho lde rs . Hence there i s a need to

organ ize spec ial t r ain ing camps to agen t s and awareness camps to



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benefic iaries per iodical ly. At tention has to be paid on not to y ie ld for

forced sel l ing, target oriented last movement sel l ing without caring for

matching of insurance products with that of the requirements of policy

holder.

2. Misbah Showkat, Student of K.U., J&K, 2008

In her s tudy Misbah has c lar if ied tha t For the purpose of identi fy ing

prime causes for lapsation, the perceptions of the core functionaries in

t he m ar ke ti ng n et wo rk o f M et Li fe a re a sc er ta in ed b y c an va ss in g

questionnaire. They include Branch managers , Area Managers , Sales

Managers, Development Officers and Agents. For the purpose strat if ied

random sampl ing is appl ied in se lec t ing sample of Branch managers

(BMs) , Development Off icers (Dos) and Banca Agents . The s tudy isconfined to the ci ty of Srinagar. The f indings include awareness levels

of the customer (about personal r isks, insurance and insurance product

knowledge) , p roduct mismatch ( l ack o f need based se ll ing / fo rced

sel l ing/ wrong se l l ing) , incompetent services (by agent and MetLife) ,

f inancial problems of customers (due to insufficient income, inflat ion,

lack of f inancia l p l ann ing ) , C om pe ti ti on ( wi th o th er f in an ci al

inst i tut ions and other investments with higher returns) .

3. Irfan Ali Zargar, student of Kashmir Univer sity, J&K, 2007

In h is s tudy I r fan Al i has l i s ted tha t purchase of insurance more than

affordabi l i ty, purchase of wrong type pol ic ies , purchase of expensive

pol icies e tc are some of the causes for lapsa t ion. He has inc luded the

Sr inagar c i ty as epicenter, s ince Sr inagar i s the bes t s i te of Kashmir

va l l ey fo r success fu l bus iness . P resen t ly he i s the Area manager o f

Sales Depar tment ; th is i s the resul t of h is s incere effor ts towards themiss ion o f o rgan iza tion. The conc lus ion and recommenda t ions were

very he lp fu l to the management . He has r e ins t a t ed a lmos t 100 (one

hundred) lapsed policies.

4. IRDA journal Aug., 2008:

T he f oc us o f t hi s i ss ue o f j ou rn al i s o n LA PS AT IO N OF LI FE

INSURANCE BUSINESS. I t s tarts with an art icle discussing inter alia

t he v ul ne ra bi li ti es t ha t i ns ur er s a re e xp os ed t o a cc ou nt o f e ar lyl ap sa ti on . I n t he n ex t a rt ic le , a t ea m o f l if e i ns ur an ce d om ai n

http://www.britannica.com/EBchecked/topic/207178/financial-planninghttp://www.britannica.com/EBchecked/topic/207178/financial-planning


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payment options given by MetLife are monthly, quarterly, semi-annually and

annually. A policy at MetLife will lapse if the renewal premium has not been paid and

the grace period has expired. Grace period at MetLife is a specified period of time,

usually 30 or 31 days after the due date, during which the premium may be paid

without penalty and coverage remains in force. If a renewal premium is not paid bythe end of the grace period, the policy lapses, which means coverage ends and the

company is no longer bound by the insurance contract. Metlife may waive its right to

have premiums paid on the due date.

If your policy lapses because you did not pay the premium by the end of the grace

period, you may be able to reinstate your policy at MetLife with some special ease

than other companies. It is because the reinstatement guidelines followed at MetLife

are quite different from others, they are more customer focused. Policies at may bereinstated after termination. Payment of past due premiums is required. MetLife

require an application and evidence you are insurable under their underwriting rules

then in effect. Reinstatement takes effect on the date Metlife approve the application

of reinstatement. If MetLife do not decline reinstatement in writing within 45 days,

the policy will be reinstated on the 45th day after date of the conditional receipt will

give you in exchange for your payment of all premiums due.

7. Keep your Life Insurance Policy Current

There are two basic types of life insurance, and premium payments are processed

differently for each of them. Failure to pay your premiums will have a different effect

on your policy depending on the type of product purchased. There are many reasons

why policy at MetLife lapses. The two most common reason a customer let's a Life

Insurance Policy lapse is because they forgot to renew it or they don't think they can

afford the premium. Allowing a Life Insurance Policy to lapse is a very bad thing.

Don`t think you can simply call MetLife and reinstate your policy some time after itlapses similar to a cable, cell phone or electricity bill but the fact is you can't. If you

allow your policy to lapse it is very likely you will need to apply for a new policy.

This can be very costly as you may have had a term life insurance policy locked in 10

years ago when you were young and healthy. There is no doubt your premium will

now go up even with the same death benefit but how much the premium goes up

depends on how well your health is. Don't forget to renew it! MetLife have made it

very easy to ensure you never forget to renew it. So before you invest in MetLife

http://www.compuquotes.com/term-life-insurance-articles.htmlhttp://www.compuquotes.com/term-life-insurance-articles.html


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make sure that you are satisfied with the reinstatement procedure so that in will not

prove costly to you

OBJECTIVESOF THE STUDY



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Objectives of the Study :

The main objective of the study is to know the actual

problem of lapses and loopholes in the whole system/process,

The following objectives were set for the present study :

1) To rectify the errors in the system which led PSPs and Monthlys

to appear in the lapsed list.

2) To find the discrepancy in the data for the rest of the modes.



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3) To know the factors responsible for the lapsed policies.

4) To go for the revival of the pol icies.



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RESEARCH DESIGNAND METHODOLOGY

RESEARCH DESIGN



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A conclusive Research was adopted to conduct the study in two stages. Firstly, to

know the factors responsible for the lapsed policies, discrepancies in the data of SA,

A and Q and to rectify the errors in PSPs and monthlys. Secondly, to go for the

revival of the policies.

In order to realize the objective of the study, primary data was collected through

SCHEDULE besides the use of Secondary data.

Sampling Plan

The population of interest was the policy holders of Kashmir valley whose policies

has gone lapsed. Three branches of J&K bank were selected for the sample. All the55customers were contacted whose policies fall in lapsed list. The customers were

approached at their respective residences, business establishments or at the concerned

bank branches. Some of the customers were contacted telephonically.

Sample size

Monthly = 10 respondents

Quarterly = 7 respondents

Semi-annually = 15 respondents

Annually = 23 respondents

DATA COLLECTION

Data Source:

Primary as well as secondary were usedPr imary da ta has been co ll ected f rom the su rvey conducted th rough

s ys te ma ti c g at he ri ng o f d at a f ro m s tr uc tu re d s am pl e o f c us to me rs

through questioner

Secondary da ta compr ised main ly o f management books and

various websites.

T he r ep or t m ai nl y c on si st s o f p ri ma ry d at a g at he re d t hr ou gh t he

schedule of quest ions asked to the respondents direct ly.



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Research instrument

In o rde r to f aci l it a te r e spondent s express ion a semi s t ruc tu red non

d is g ui se d t yp e o f s ch ed ul e o f q ue st io ns w as u se d c on ta in in g t he

re levan t ques t ions a s pe r the r eason o f thei r non con t inu ing o f the

policies. The same was done with the FAs of the J&K bank.

INTERVIEWING PROCESS

T he s u rv ey w as c on du ct ed t hr ou gh i nt er vi ew s w it h t he FAs a nd

customers were asked the reason of lapsed policies and the interviewer

n ot ed d ow n t he r es po ns es . T hi s e ns ur ed h ig h r es po ns e r at e a nd

eliminated wrong irrelevant responses.

Pilot survey

The schedule was pre tested for errors and ease of understanding. The errors thus

determined were eliminated. The understanding issues were also eliminated to the

extent they could be without any effect on the intended purpose of the query.

This brought some changes in the schedule regarding phrasing, order, and

number of Queries that were made on time.

Statistical tools

Microsoft Excel was used for tabulat ion of data, percentages are drawn

f or g en er al iz in g t he s tu dy a nd g ra ph s a re u se d f or h av in g b et te r

pictorial representat ion.

.



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METLIFE PROFILE

The spirit of MetLifes commitment..

V I S I O N



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Build f inancia l f reedom for a l l through leadership in providing

p rofess iona l f inancia l advice and bu ild ing long t e rm re la t ionsh ips

through innovat ive protec t ion , accumulat ion and re t i rement products ,

robus t underwr i ting p rocesses and c rea t ing a world -c las s customer

service experience for our customers.

O U R M I S S I O N

B y 2 01 0, p ro vi de 5 m il li on c us to me rs i n I nd ia w or ld -c la ss

solutions for f inancial securi ty and in the process add significant value

to our shareholders, associates and society.

O U R C O R E VA L U E S1 We lead th rough innovat ion to o ffe r wor ld cl a ss and compet i tive

products to our customers.

2 We bu ild long t e rm re lat ionships with our cus tomers by c rea ting

a wor ld c lass service exper ience through opera tional excel lence

and the innovative use of technology.

3 We c r ea te a c u s to me r c e nt er ed a nd r e s ul t f o cu se d d i vi si on t ha t

insp i res and has the buy in o f a l l ou r a s soc ia t e s and has the i r

buy-in.

4 We are committed to crea t ing a h igh performance organiza t ion by

creating an environment that al lows each one of our associates to

perform at the i r peak. As a result we wi l l a lso be recognized as

an employer of choice.

5 We a r e c o mm it te d t o p a r tn er in g w i th o ur i n t er na l a n d e x te rn al

customers for mutual success.

6 We work wi th in tegri ty, fa i rness and f inancia l prudence in al l our

deal ings keeping the in teres t of our shareholders , cus tomers and

employees paramount.

.Partnering for excellence



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MetLife proudly inheri ts i ts parent company's over- 136 year-old

r e p u t a t i o n o f h e l p i n g b u i l d f i n a n c i a l f r e e d o m f o r e v e r y o n e .

Ra nk ed 3 8 o n th e F ort un e 5 00 l is t ( Ap ri l 2 00 4) Me tLif e

insurances (MetLife) is one of the largest , s trongest and most respected

f inancia l organiza t ions . MetLife through i t s ' a ff i l ia tes i s the number

one l i fe insurer in the U.S wi th approx. @2.5 t r i ll ion of l i fe insurance

in force (as of Dec. 2002) and has been delivering rel iable, high quali ty

service to i ts customers since 1868.

MetLife is a leader in group benefi ts that serve 88 of the top onehundred FORTUNE 500 companies, and p rov iding benef it s to 37

mill ion employees and family members through i ts sponsors in the U.S.

T h e M e t L i f e c o m p a n i e s a r e a l s o r a n k e d # 1 i n g r o u p l i f e a n d # 1 i n

commercia l denta l in the U.S. Headquar tered in New York. MetLife

through i t s a ff i lia tes, subs idiar ies and representa tive off ices , opera tes

in 15 countr ies throughout the America , Europe and Asia . MetLife ' s

ins t i tu t ional c l ients have approx. 35 mi l l ion employees and members .

MetLife has assets under management worth $255 bil l ion.

(FORTUNE 500 is a registered trademark of FOURTUNE

Magazine, a division of Time, Inc)

MetLife insurance Company private Limited was incorporated in

India on April 11, 2001 as a joint venture between MetLife

international Holdings Inc. , The Jammu and Kashmir Bank, M. Pallonjiand Co . P r iva te L imi ted and o the r p r iva te inves to r s. MetL ife has-

developed and distr ibutes a range of l i fe insurance in India.

MetLife is headquartered in Bangalore with officers and presence

in major Indian c i t ies , and an addi tional 1000 out reach points through

its channel partners.



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Through our highly professional agency system, we are dedicated

to help ing Indian consumers p lan for the i r f inancia l secur i ty through

customized solutions.

MetLife i s dr iven by the pr incip les of uncompromis ing in tegr i ty

and the h ighes t level of profess ional ism. I t s miss ion i s to work wi th

utmost integri ty, fairness and f inancial prudence in al l i ts dealings.

MetLife benef i t s f rom i t s parent company 's g lobal presence in

the f ield of insurance, t rack record of establishing successful insurance

opera t ions in emerging markets and the unique s t rengths of i t s o ther

Indian p romote r s. Drawing f rom these exper iences , MetL ife wi ll be

able to address the needs of the Indian customer.

MetLi fe a sp i res to bu i ld on MetLi fe h i s to ry o f mee t ing po l i cy

holder and contract obligations and the, abil i ty to withstand the impact

of adverse economic facto rs . The MetLife brand, known for

empowering people to fee l protec ted , guided and hopeful about the i r

l ives, wil l do the same for i ts Indian customers.

In the past two years, MetLife has made significant

contribut ions to the growth of MetLife in ternat ional . S ince se l l ing i t s

f i rs t pol icy in January 2002, MetLife has exper ienced s t rong growth

f rom i t s agency fo rce , wh ich inc reased 45% dur ing 2003 a lone . The

company p resent ly has more than 240,00 po li c ie s in p lace and has

recen tly en te red the inst i tu t ional marke t wi th a g roup l i fe p roduct .

Whi le g roup insu rance in Ind ia i s no t cu r ren t ly a l a rge marke t , t he

segment is forecasted to grow rapidly in the next two-to-three years. By

focusing on this untapped market , MetLife can meet the needs of large

corpora t ions , he lp ing them es tabl ish benef i t programs that he lp themat t rac t and re ta in top ta lent . However, i t i s per t inent to mention here

tha t Ind ia ' s Banc as su rance and Corpora te Agency has a l so p layed a

significant role in contributing to this success. The goal is for MetLife

to contribute signif icantly to the MetLife mission of reaching

100 mi l l ion cus tomers by 2010. To help reach tha t goal , MetLife p lan

on launching innovat ive products in the near fu ture , th is wi l l ac t as a



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major d i fferent ia tor among compet i tors . In addi t ions , wi th the launch

of the new MetLi fe t e l ev i s ion commerc ia l s , wh ich i s a f i r s t fo r our

I nd ia o pe ra ti on , t hi s w il l a dd g re at ly t o M et Li fe 's g lo ba l b ra nd

r ec og ni ti on . Th e c omb in ati on o f t his b ra nd a nd t he c on ti nu ed

outstanding efforts wil l provide the fuel to drive MetLife further up theroad of success.

MetL ife de liver s va lue and world -c las s se rv ice to customers

through i t s f inancia l advisors and corpora te sa les representa tives . The

miss ion o f MetL ife Insu rance i s to bu ild f inancia l f r eedom fo r a l l.

What is f inancial freedom? It is al l about securing one's future. I t about

approaching l ifes major milestones without any worries. True f inancial

f r eedom a r ises f rom iden t ify ing your f inancia l capab il i ti e s , s e tt ingreal i st i c goal s based on your d reams and aspi rat ions and achieving

them through a comprehensive p lan . Most impor tant ly, whi le you se t

out to draw up f inancial plans for your l i fe- you need to understand that

i t i sn ' t a one - t ime p lan . The p lann ing tha t goes in to a t t a in ing your

f inancia l f r eedom should be dynamic , s ince l i fe i t se l f i s dynamic .

What 's good for you today might not be next year.

Du ri ng th e c ou rs e o f yo ur l ife yo u n ee d to a ch ie ve yo ur

aspi ra t ions ( l i fe owning of house) , meet cer ta in f inancia l obl iga t ions

( li fe e du ca ti ng y ou r c hi ld re n o r- ge tt in g t he m m ar ri ed ), r id e o ve r

unforeseen contingencies and plan a f inancial ly independent ret irement

phase . The Met Advice Financia l P lanning could be the f i rs t s tep in

your p lann ing exe rc i se . I t a t t empts to g ive you on overv iew of the

various investment options available in the market today.

P R O D U C T S O F M E T L I F E

1. MET 100

2. MET SUKH

3 . MET M ORTA GAGE P RO TECTOR S ING LE PAY

4 . M ET P LATI NUM ( PA RT IC IPATI VE E ND OW NM EN T)

5 . MET 10 0 GO LD (PA RTI CI PATI VE WHO LE LI FE)



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6 . M ET 1 00 PL AT IN UM (PARTI CI PATI VE WH OL E L IF E)

7 . M ET G OL D ( NO N PARTI CI PATI VE E ND OW NM EN T)

8. MET BHAVISHYA

9 . M ET SU VI DH A ( NO N PARTI CI PATI VE RE GU LA RPAY )1 0. M ET S UV ID HA ( NO N PA RT IC IPAT IV E LI MI TE D PAY)

11. M ET S UV ID HA ( NO N PARTI CI PATI VE SI NG LE PAY )

1 2. M ET S UV ID HA ( NO N PARTI CI PATI VE SI NG LE PAY )

1 3. M ET SU VI DH A ( PA RT IC IPAT IV E LI MI TE D PAY )

1 4. M ET SU VI DH A ( PA RT IC IPAT IV E LI MI TE D PAY )

1 5. M ET SU VI DH A ( PA RT IC IPAT IV E S IN GL E PAY )16. MET PENSION ( PARTICI PATIVE SINGLE PAY)

1 7. M ET PE NS IO N ( PA RT IC IPAT IV E R EG UL AR PAY)

1 8. M ET PE NS IO N ( PA RT IC IPAT IV E L IM IT ED PAY)

1 9. M ET S UR AK SH A ( NO N PA RT IC IPAT IV E RE GU LA RPAY )

2 0. M ET S UR AK SH A ( NO N PA RT IC IPAT IV E LI MI TE DPAY )

2 1. M ET S UR AK SH A (N ON PARTI CI PATI VE S IN GL EPAY )

2 2. M ET SU RAKS HA LI MI TED TO A GE 6 0 ( NO N PA RTI CI PATI VE

REGULAR. PAY)


LIMITED PAY)


SINGLE PAY)

25. MET SMART PLUS-RP

26. MET SMART PREMIER- RP

27. MET SMART PLUS SINGLE

2 8. MET S MART PREM IER SI NG LE

29. MET ADVANTAGE PLUS-



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MetLife`S ACHIEVEMENTS MetLife enjoyed a golden performance on May 15, 2009 (New York) - At the

15th Annual FCS Annual Portfolio Awards, the Financial Communications

Society (FCS): four awards, all Gold trophies, plus the Best-in-ShowMulticultural award for its "South Asian Brand Television Campaign," created

by IW Group. The award was sponsored by Forbes. MetLife also won Gold in

the new ROI category, which recognized the success of marketing campaigns

for their stated return on investment.

MetLifes corporate vision to build financial freedom for everyone guides

the companys response to peoples growing need for first-rate financial

products and services through various life stages and economic cycles.MetLifes trusted brand, capital strength, and existing relationships with



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millions of individual and institutional customers around the globe uniquely

position MetLife among its competitors. The "everyone" in MetLifes vision took on added meaning in 2000 as the

company welcomed an important new constituency: shareholders. MetLife

transformed itself from mutual to stock ownership in April of that year through a demutualization and initial public offering that was completed in

just 18 months after Board authorization. The year 2001 was a true test of the qualities that define MetLife. The

companys core values, brought to life in what MetLife does every day, were

no more evident than in MetLifes response to the tragic events that shook our

nation on September 11. MetLife responded quickly. The company served its

customers, communities and employees during this difficult time. At the same

time, MetLife invested $1 billion in a broad array of publicly-traded common

stocks. In 2001, MetLife was the first insurance company to establish a financial

holding company with a nationally chartered bank. Leveraging its unparalleled

distribution channels, MetLife entered the retail-banking arena with the launch

of MetLife Bank, making it an easy and convenient way for MetLifes

customers to realize their financial goals.

MetLife announced in 2002 that it would be continuing its long-standing

relationship with Snoopy and the rest of the PEANUTS characters. The

company signed a new contract that would allow the characters to appear in

MetLifes domestic and international advertising for the next 10 years. The sale of State Street Research & Management Company to BlackRock, Inc.

was announced in 2004. In line with MetLifes strategy to focus on core

business growth, the sale benefited many of the companys Individual and

Institutional Business clients who held investments through State StreetResearch, as it became part of one of the largest publicly traded investment

management firms in the U.S. The companys stated long-term goal is to become the recognized leader

throughout the world for relationship building, connectedness and caring in

financial services in the "giant league" with over 100 million people as

MetLife customers by the year 2010. MetLife took a major step toward realizing this goal in 2005, when it acquired

Travelers Life & Annuity and substantially all of Citigroups international



42/99


insurance businesses for $12 billion. Completed on July 1, 2005, the Travelers

acquisition made MetLife the largest individual life insurer in North America

based on sales, the second largest provider of retail annuities and the largest

provider of institutional annuities.

Working Mother magazine honoured MetLife in 2005 by naming the companyone of the "100 Best Companies for Working Mothers," for the seventh

consecutive year. In 2005, the company was named to Diversity Inc.s list of

the Top 50 Companies for Diversity. In early 2006, MetLife was also named

to the National Association for Female Executives annual list of Top 30

Companies for Executive Women. In 2006, MetLife appointed C. Robert (Rob) Henrikson chairman of the board

of directors, president and chief executive officer of MetLife, Inc. Henrikson

was appointed CEO on March 1, 2006 and chairman of the board on April 25,

2006. Henrikson has been the architect of an aggressive growth strategy that

included double-digit organic growth, the divestiture of non-core businesses,

and an M&A strategy which resulted in market leadership in all of MetLifes

core product lines. Before it was commonly talked about, Henrikson

recognized the opportunities presented by the changing demographics in a

global marketplace and set the company on a course for continued success by

developing innovative products and services and strengthening the companys

distribution power in the U.S. and 16 markets in Asia Pacific, Latin America

and Europe. Today, a time when consumers are feeling a greater financial burden than ever

before, MetLife is helping millions of customers create their own personal

safety net. At no time in the companys history has MetLife been as well

positioned to capitalize on its history, its reputation for security and stability,and its innovative products and services as it is today.

In the future, MetLife will continue to grow its business with focus, innovation

and profitability. This will be accomplished by drawing on the reservoir of

history that has produced an enduring set of corporate values based on more

than 138 years of integrity, social responsibility, strong leadership and

financial strength.

Some other achievements



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Largest life insurer in the US with approximately $3.4 trillion of life insurance in

force 1

Serves 70 million customers and experiences the existence of over 140 years in

the industry

Ranked 39 on the FORTUNE 500 listing Ranked 6 th In Fortune Magazine 2009 List of Americas Most Admired

Companies Named by Forbes magazine as The Best Managed Insurance Company in

America (2008) 3rd Runner up in customer loyalty survey Conducted by Business Standard & AC

Nielson in 2008

Chart showing Market Share of ULIPS in Kashmirregion

Inference and analysis:The Graph shows that 31 .39 Cr i s the market share of Kashmir region

regarding ULIPS(Uni t L inked Insurance Po li c ie s ) , 27 Cr i s that o f

ICICI prudential and 22.5 Cr that of Bajaj All ianz.

Inference :

I t implies that major port ion of ULIPS market is that of MetLife

India Insurance Ltd . But there i s a tough complet ion among the three1Metlife inc. through its affliates



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tha t i s Bajaj Al l ianz , ICICI Prudent ial and MetLife . So, MetLife have

an edge over others and sho uld continue the same in the market .

Growth Ranking 2008


0 %

1 %

2 1

2 1

3 7

3 7

3 9

5 1

5 7

7 3

8 2

8 8

9 1

1 0 3

N AN AN A

N AN AN A

- 2 0 % 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % 1 2 0 %

B h a r a t i A x a L i f eF u t u r e G e n e r a l iID B I F o r t is L if e

C a n a r a H S B C O B CA e g o n R e lig a r eD L F P r a m e r ic a

A v i v aB a j a j A llia n z

IC I C I P r u d e n t ia lIN G V y s y a

S h r ir a m L if eH D F C S t a n d a r d

Ta t a A IGM a x Ne w Y o rk

S a h a r aO m K o ta k

B i r la S u n lif eM e t L if e

R e lia n c e L i f eS B I L i f e


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Financial Status of MetLife{See annexure for fin. report}

From balance sheet

The f igure of total assets has increased f rom $ 356,808.0(2004) to $559,149.0(2007) during past four years but i t

showed drastic decline in the financial year 2008,

[$ 501,678.0]. This might be the resul t o f huge economic

meltdown which effected all over the world. There is increase

in cash amount but the long term investments have declined

due to high risk in the slowing down economic scenario. Alsothe good will of company has increased to satisfactory level.

S imilar ly the l iabi li ti es f igure has increased f rom 2004

($ 333,984.0) t o 2007 ( $ 523,970.0) but dec lined in 2008

financial year up to $ 477,944.0. The h ighest fi gure

($ 408,961.0) is of policy liabilities i.e. the amount which the

company owes to i ts pol icy holders in case of their c la im/accident. The amount of long term debt has shown an

increasing trend from past five years ( $ 7,412.0 to $ 13,425.0).

There i s a huge amount of retained earnings ( $ 6,608.o to

$22,403.0) which depicts that the company is not distributing

its all net profit after tax in its shareholders. So the figure of

total liability & shareholders equity is $ 501,678.0 in financial

year 2008.



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From income statement Total revenue figure shows increasing trend i .e. $38,701 to

$50,989 where the total p remium earned increases f rom

$25,067 to $31,295. Gross profit shows small inclination from

2004 to 2007 but slows down in 2008 ($24,189 to $23,155).

The company is doing increased expenses year after year, in

2005 it was $7,553 but in 2008 it was $7,907.0.

Net income after tax fi gure shows incline from 2004

($2,572.0) to 2007 ($4,102.0), but in 2008 the net income after

tax amount is US $3,510. The EPS has increased in last 4 years

but in 2008 it remains low at 4.72.

From past ten years income statement predicts similar increase in coming

financial year but there might the effect of economic slowdown. Figure

moves from EBIT $1,175 to US $5,762 [In mil lions] (up to 2007),

and in 2008 it declines to US $5,090 [In mill ions] Also ES

(earning per share) varies from 0.83 to 5.2 (4.54 in 2008).From past 10 years balance sheet similar trend is viewed i.e.

Cur rent Asse ts var ies f rom $225,232 .0 (in mil li ons) t o

$501,678, up to 2008. Also cur rent l iabi li ti es vary f rom

$211,542 to $477,944. In addition long term debt increases

from $2,514.0 to $13,425.0.

All above figures are forecasting better future of MetLife but

C.A. should be utilized properly and lowering the liabilities. It

is better to retain earnings than long term debt by discussing

the same issue with share holders.



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BANCASSURANCE

B A N C A S S U R A N C E



48/99


B an c a ss ur an ce i n i ts s im pl es t f or m i s t he d is tr ib ut io n o f

insurance products through a bank 's d is t ribut ion channels . In concrete

terms banc assurance , which i s a lso known as Allfinanz - descr ibes a

p ac ka ge o f f in an ci al s er vi ce s t ha t c an f ul fi ll b ot h b an ki ng a nd

insurance needs at the same t ime.

I t takes var ious forms in var ious countr ies depending upon the

demography and economic and l egi s la t ive c l ima te o f that coun t ry.

Demographic prof ile of the country decides the k ind of products banc

assurance shal l be deal ing in wi th , economic s i tua t ion wi l l de termine

the t rend in terms of turnover, market share , e tc . , whereas legis la t ive

cl imate wi l l decide the per iphery wi th in which the bane assurance has

to operate.

The mot ives behind banc assurance a lso vary. For banks i t i s a

means of product diversif icat ion and a source of addit ional fee income.

Insurance companies see banc assurance as a tool for increas ing the i r

market pene t ra t ion and p remium tu rnover. The customer sees banc

assurance as a bonanza in terms of reduced price, high quali ty product

and delivery at doorsteps. Actually, everybody is a winner here.

Benefi ts to bank

Using bank as a d is t ribut ion channel benefi t s both the insurance

company and the bank. Benefi ts of using bank as a distr ibution channel

are:

1) Banks provide a readymade infrastructure and, th erefore,

reduces the t ime and cost in est

metlife general

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