recruitment financial advisors of icici prudential
TRANSCRIPT
SUMMER TRAINNING PROJECTON
RECRUITMENT FINANCIAL ADVISORSOF
A report submitted to Delhi business School, New DelhiAs a part fulfillment of
MBA+Post Graduate Program (Industry Integrated) in Entrepreneurship & Business
Sabmitted to: Submitted by:Director Academics XXXXXDelhi Business School XXXXNew Delhi XXXX Ist sem.
P. T. U.
Internal Guide:Ms. XXXXXDelhi Business SchoolNew Delhi
DELHI BUSINESS SCHOOL B-II/58, M.C.I.E., Mathura Road, New Delhi
Website: www.dbs.edu.in
CONTENTS
Acknowledgement
Introduction
Preface
Company Profile
Executive Summary
Products and Policies
Product portfolio
Introduction of channel development and recruitment
Methodology used to recruit advisor
SWOT Analysis
Future growth prospects
Competitive analysis
Recommendations
Learnings
Bibliography
1
ACKNOWLEDGEMENT
I am thankful to management of ICICI prudential life insurance company limited for
granting the permissions, corporation and valuable information for preparation of this
project.
No words are enough to thank Mr. XXXXX (Unit Manager), who not only inspired me to
work on this project but also guide me to prepare it. In spite of heavy responsibilities and
busy schedule, he always managed time to provide proper guidance.
I also thankful to Ms. XXXXXX (Institute Mentor), who guide, encourage and help me to do this project.
Last but not the least; I would like to say that all my friends and well-wishers for giving
me constant support and valuable suggestions to translate my ideas into reality.
XXXXXX
2
DECLERATION
I, XXXXX student of Delhi Business School Jan 2008-10 batch. Hereby I declare that the project titled “RECRUITMENT FINANCIAL ADVISIORS” is a bonafide work and is neither submitted to Delhi Business School at any point of time nor to any other university or institution for fulfillment of the course of study.
XXXXXXX
3
Executive Summary
Identifying different profiles of the people and giving them an additional source of
income to join ICICI prudential as an Financial Advisor.
A market survey was done on life insurance companies. Different questions regarding the
companies training program for advisor, top 5usp’s, training centers etc. were asked. The
areas covered up in this survey were Badarpur and Lakshminagar. The report contains
details of different life insurance companies, which are in healthy competition of ICICI
Prudential life insurance.
In today’s era, the insurance industry is one of the most booming sectors. India itself has
population of 1-12 billion out of which roughly 33.2 % people are insured. This clearly
shows that most of the people are note insured just because they just don’t know much
about insurance. Most people have some common queries about life insurance.
4
What is life insurance?
A policy that will pay a specified sum of beneficiaries upon the death of insured person.
An agreement that guarantees the payment of stated amount monetary benefits upon the
death of the insured person.
Why insurance?
Insurance is the protection of life and assets against unforeseen circumstances. Whether it
is general accident policy, a Mediclaim policy or a pension policy, an insurance policy
helps you to scope with uncertainty and insecurity.
Ever though about why you should take an insurance policy. For one, it helps you to
hedge risks against unforeseen circumstances and save more. It that’s not all, it is:
Superior to an ordinary savings plan as it provides full protection against the risk of
death.
Encourages and forces compulsory savings unlike other savings instruments,
wherein the saved money can be easily withdrawn.
Provides loan to tie over a temporary difficult phase and is also acceptable as
security for a commercial loan.
Offers tax relief to policyholder.
Hedges risk against uncertainty.
For a policy taken under the MWP Act 1874, (Married Women’s Property Act), a
trust is created for wife and children as beneficiaries.
5
Based on the concept of sharing of losses, the society
will benefit as catastrophic losses are spread globally.
Who can buy a life insurance policy?
Any person above 18 years of age, who is eligible to enter into a valid contract, can go
for an insurance policy. Subject to certain conditions, a policy can be taken on the life of
a spouse or children.
How is a life insurance policy useful?
Planning for the financial consequences of a premature death is an essential part of every
financial plan. Generally, the consequences are simply too large to ignore and cannot be
totally covered with your own resources. Life insurance is nothing but contract with an
insurance company under which is insured (purchaser) pays a premium in exchange for
coverage of specified issues. Life insurance is protecting your family against the risk of
premature death of you (or your spouse). Life insurance planning should consider your
family’s short term needs (for example, medical expenses) and long-term needs (for
example, replacing your income),
In course of our life w are accosted by risk-that of failing health, financial losses,
accidents and so on. Insurance is mean by which life’s uncertainties are addressed in
financial terms. It offers a monetary compensation against those losses. Insurance is
considered more as a hedging mechanism rather than a true investment avenue. Life
insurance, in particular is essentially acknowledged as mechanism that eliminates risk-
substituting certainty for uncertainty primarily by transferring risk from the insured to the
insurer.
6
Is life insurance is a saving instrument?
Life insurance is mainly considered as a saving instrument rather than an investment
avenue as it promotes compulsory savings besides reducing tax burden on the
policyholder and protects the family of policyholder in the event of unforeseen
happening. It is the only saving instrument, which covers risk besides giving tax
concession both at entry (premium paid) and exit point. The section 10(D) of the income
tax act totally exempts payment of tax on any amount received as bonus against life
insurances policies.
7
Types of Insurance Plans
Traditional or Unit Linked
Broadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail of both segments:
Unit Linked Insurance Product:
ULIPs have gained high acceptance due to attractive features they offer. These include:
Flexibility
Flexibility to choose Sum Assured.
Flexibility to choose premium amount.
Option to change level of Premium /Sum Assured even after the plan has started.
Flexibility to change asset allocation by switching between funds
Transparency
Charges in the plan & net amount invested are known to the customer
Convenience of tracking one’s investment performance on a daily basis.
Liquidity
Option to withdraw money after few years (comfort required in case of exigency)
Low minimum tenure.
Partial / Systematic withdrawal allowed
8
Fund Options
A choice of funds (ranging from equity, debt, cash or a combination)
Option to choose your fund mix based on desired asset allocation
Traditional Plans:
These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:
Steady Investment
Major chunk of investible funds are in debt instruments
Steady and almost assured returns over the long term
Features
Death benefit is Sum Assured + guaranteed & vested bonus
Helps in asset creation as they are for a long tenure
Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity
9
Tax Benefits on Insurance and Pension
Life insurance and retirement plans are effective ways of saving taxes. The tax breaks that are available under our various insurance and pension policies are described below: 1. Life insurance plans of ICICI Prudential are eligible for deduction under Sec. 80C.
2. Pension plans of ICICI Prudential are eligible for a deduction under Sec. 80CCC.
3. Health insurance plans/riders of ICICI Prudential are eligible for deduction under Sec. 80D.
4. The proceeds or withdrawals of life insurance policies of ICICI Prudential are exempt under Sec 10(10D), subject to norms prescribed in that section.
10
COMPANY PROFILE
ICICI Prudential Life Insurance Company is joint venture between two heavy weights,
ICICI Bank, India and Prudential Plc., UK. The name, ICICI Bank is not a new name in
the Indian finance sector. It is India’s second largest and largest private sector bank with
over 50 years of financial experience. It offers a wide range of banking products and
financial services to corporate and retail customers in areas of investment banking, life
and non-life insurance, venture capital and asset management. It is leading player in retail
banking and has over 13 million retail customer accounts. The bank has a network of
over 570 branches and extension customers, and 2000 ATMs.
Prudential Plc. Is a London based finance company. It was established in the year
1848. The name Prudential might not be familiar along us but we have an emotional
attachment with this name and specially our previous generation. The reason, many of us
infant when Kapil Dev Nikhanj lifted the cricket World Cup at Lords in 1983. That
World Cup sponsored by none other than Prudential Plc. It was named Prudential Cup.
Another famous example, in the year 1998, a movie named Titanic took all the
academy awards of that year. The incidence Titanic was a true one. The accident took
place in the year 1913. it was Prudential Plc., which provide the ship insurance coverage.
The business of Prudential Plc. spans across the globe. By its products and services, it has
brought a revolution of sort in finance sector. It provides retail financial services products
and services to more than 16 million customers, policyholders and unit holders
worldwide. The credit goes to the company to bring to the market an integrated range of
financial services and products that now include life insurance, pensions, mutual funds,
banking, investment management and general insurance. Since its inception, it has been
doing its business with its flag always flying high.
11
ICICI Prudential began its operations in India in December
2000. It is among the first private sector insurance company to get approval Insurance
Regulatory Development Authority (IRDA). ICICI Prudential’s equity based stands at
Rs. 1185 crore with ICICI Bank and Prudential Plc. holding 74% and 26% stake
respectively. Until sep. 2005, the company wrote 283,818 policies. In the process, it has
garnered Rs. 820 crore of new business premiums for a total sum assured 0f Rs. 7,131
crore. For the past four years, ICICI Prudential has been donning the No. 1 position in the
private life insurance sector in the country. It has a wide range of flexible products that
meet the need of the Indian customer at every step.
Although for the last 50 years LIC has been the only company to cater the consumer
needs in the insurance sector but the past 5 years 21 insurance companies have been
emerged in this scenario.
Some these are following:
ICICI Prudential Life
Bajaj Allianz
Max New York Life
Met Life
ING Vyasa
Om Kotak Mahindra
Tata AIG
Aviva
HDFC Standard Life
SBI Life
12
Reliance Life
Bharti
PNB Life
New players need to recognize the limitations of their rival and decide upon the right mix
of distribution channels in their business.
Vision & Values
Vision:
To be the dominant Life, Health and Pensions player built on trust by world-class people and service. The hope of tomorrow achieve by:
Understanding the needs of customers and offering them superior products and service
Leveraging technology to service customers quickly, efficiently and conveniently
Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for our employees
And above all, building transparency in all our dealings
The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of the people and the way they work. ICICI Prudential does believe that we are on the threshold of an exciting new opportunity, where they can play a significant role in redefining and reshaping the sector.
13
Given the quality of their parentage and the commitment of their team, there are no limits to the growth.
Values:
Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.
The ICICI Prudential Edge
The ICICI Prudential edge comes from our commitment to their customers, in all that they do - be it product development, distribution, the sales process or servicing. Here's a peek into what makes them leaders. 1. Products of ICICI Prudential have been developed after a clear and thorough understanding of customers' needs. It is this research that helps us develop Education plans that offer the ideal way to truly guarantee your child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire, or Health insurance that arms you with the funds you might need to recover from a dreaded disease. 2. Having the right products is the first step, but it's equally important to ensure that our customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute their products. 3. Robust risk management and underwriting practices form the core of business of ICICI Prudential. With clear guidelines in place, they ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process. 4. Entrusted with helping ICICI Prudential customers meet their long-term goals, they adopt an investment philosophy that aims to achieve risk adjusted returns over the long-term. 5. Last but definitely not the least, ICICI Prudential 28,000 plus strong team is given the opportunity to learn and grow, every day in a multitude of ways. They believe this keeps them engaged and enthusiastic, so that they can deliver on promise of ICICI Prudential to cover you, at every step in life.
14
Fact Sheet
The Company:
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2008, the company garnered Retail New Business Weighted premium of Rs. 6,684 crores, registering a growth of 68% over the last year and has underwritten nearly 3 million retail policies during the period. The company has assets held over Rs. 29,500 crore as on May 31, 2008. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
Distribution:
ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 955 branches in addition to 1,033 micro-offices and an advisor base of over 261,000 (as on May 31, 2008). The company has 20 banc assurance partners having tie-ups with ICICI Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Co-op Bank,
15
Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative Bank
Awards & Recognitions
Awards:
ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2008 in three key categories for its marketing initiatives
16
ICICI Prudential Life was awarded the INDY’s Award for
Excellence in Mass Communication in the category of Most Creative Advertisement-
Television
India's Most Customer Responsive Insurance Company
Avaya Global Connect - Economic Times Customer Responsiveness Awards, 2007
Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged as one
of the 50 Most Powerful Women in Business by The Financial Express.
ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the
Outlook Money & NDTV Profit Awards 2007
17
Innovation Award for launching Diabetes Care – Prudence Award 2006
People Award for excellence in training and people development - Prudence Award 2006
18
PRODUCTS POLICIES
ICICI Prudential has a wide array of insurance plans that have been designed with the
philosophy that different individuals are bound to have differing insurance needs.
The ideal insurance plan is one that addresses the exact insurance needs of the
individual that will depend on the age and life stage of the individual apart of the host of
other factors.
LIFE INSURANCE PLANS:
Under Life insurance plans, ICICI Prudential offers plans under the following major
categories:
Education Insurance Plans
Wealth creation Plans
Premium Guarantee Plans
Protection Plans
RETIREMENT SOLUTIONS:
19
The primary objective of retirement plan is to help you
provide for your financial needs in your post retirement years.
Forever Life
Life Time Super Pension
Life Link Super Pension
HEALTH PRODUCT SUIT:
Under Health Product Suit, ICICI Prudential offers plans under the following major
categories:
Health Assure
Health Assure Plus
Hospital Care
Cancer Care
Cancer Care Plus
Diabetes Care
Diabetes Care Plus
20
PRODUCT PORTFOLIO
Insurance Solutions for Individuals
ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder.
Savings & Wealth Creation Solutions
Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns.
CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years.
LifeTime Gold is a unit-linked plan that offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 7 fund options - Preserver, Protector, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth.
LifeStage RP is unit linked plan that provides you with an option of lifecycle-based portfolio strategy that continuously re-distributes your money across various asset classes based on your life stage. This will help you achieve the right Asset Allocation to meet your desired financial goals.
21
LifeLink Super is a single premium unit linked insurance plan which combines life insurance cover with the opportunity to stay invested in the stock market.
Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation.
InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation.
InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options.
LifeStage RP is a unique and powerful wealth creation insurance solution, which combines the benefits of automatic asset allocation and quarterly rebalancing along with increased protection.
Protection Solutions
LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium.
22
HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.
Education Solutions
SmartKid New ULRP provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. SmartKid plans are also available in traditional form.
Retirement Solutions
ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually.
LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement.
LifeStage Pension is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your life stage, eventually providing you with a customized retirement solution.
LifeLink Super Pension is a single premium unit linked pension plan.
23
Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options.
PremierLife Pension is a unique and convenient retirement solution with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.
Health Solutions
Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover.
Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions.
Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings.
Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also
24
offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover.
Diabetes Care Plus : is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics
Hospital Care: is a fixed benefit plan covering various stages of treatment - hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years.
Crisis Cover: is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death.
Group Insurance Solutions
ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.
25
Group Gratuity Plan : ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner and also avail of tax benefits as applicable to approved gratuity funds.
Group Superannuation Plan: ICICI Prudential Life offers a flexible market linked scheme that provides substantial benefits to both employers and employees. Both defined contribution (DC) and defined benefit (DB) schemes are offered to optimize returns for members of the trust and rationalize cost. Members have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement.
Group Immediate Annuities: ICICI Prudential Life realizes the importance of prudent retirement planning. With this in mind, we have developed a suite of annuity products that not only give you an income for life but also provide you options to match your needs. In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us.\
Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide an affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.
Flexible Rider Options
ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.
1. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the
26
1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.
2. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death
3. Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with SmartKid, LifeTime Plus, LifeTime Super and LifeTime Super Pension.
4. Income benefit rider: In case of death of the life assured during the term of the policy, 10% of the sum assured is paid annually to the nominee on each policy anniversary till the maturity of the rider.
Some plans with detail
CASH BAK
Who can apply?
If you are 16 year old and not older than 55 years, the minimum sum is Rs. 75,000. You have the option of paying yearly, half-yearly and also monthly premium.
Death benefit:
Sum assured + guaranteed additions (GA @ 3.5% compound annually on SA for the 4 years) + vested bonus (VB)
27
Maturity benefit:
50% of sum assured guaranteed additions for four years + VB ob entire sum assured.
Survival benefit:
At the end of the year
SBAS % of S.S. End of the years SBAS % of S.S.
3 10% 4 10%6 15% 8 15%9 20% 12 20%12 25% 16 25%Maturity 50%+GA+VB Maturity 50%+GA+VB
Additional features:
For protection to your family against unfortunate health, hazards or eventuality, we offer you the followings riders:
1. Critical illness Riders2. Major surgical Riders3. Accident & Disability benefit4. accident benefit Riders
General features:
Surrender- after 3 policy years, you get certain amount on surrender of the policy.
SMART KID
Who can apply?
If you are a parent’s aged between 20 & 60 years with children in the age group of 0 to 15 years with minimum sum assured Rs. 1,00,000.
Death benefit:
Nominee get 100% sum assured + profit accrued on the plan till such date + Wavier of premium
Survival benefit:
28
This policy pays out money at regular interval coinciding with important Miles tones in child’s life. It has two options for payment.
Option 1:
At the end of Child Age Pay out
Term-7 5 years 0% of S.A.
Term-5 7 years 5% of S.A.
Term-2 0 years 5% of S.A.
Term 2 years 0% of S.A.+GA+VB
Option 2:
At the end of Child Age Pay out
Term-4 8 years 5% of S.A.
Term-3 9 years 20% of S.A.
Term-2 0 years 20% of S.A.
Terrm-1 1 years 0% of S.A.
29
Term 2 years 0% of S.A.
Riders:
1. Income benefit riders2. Accident & Disability Benefit riders
3. Accident benefit riders
General features:
Surrender: after three policy years have been completed
Tex-benefit: Sec 80(c) on premium payment
Sec 10(10) D benefit on death & maturity claim.
FOREVER LIFE PENSION PLAN
Who can apply?
If a person age between 20 & 60 year with minimum term 5 years and maximum 30 years.
Life cover benefit:
Forever life pension plan provides life covers during the deferment phase. In unfortunate event of the death, the spouse has the option to receive the sum assured with guaranteed additions and vested bonuses(if any) as a lump sum or get an annuity that would provide a regular income for life.
30
Maturity benefit:
1. Life Annuity: annuity for life2. Life annuity with return of purchase price: life annuity for the annuitant with the
return of the purchase price.3. Life annuity guaranteed for 5, 10, 15 years: guaranteed annuity paid for chosen
term and after that the annuity as long as the annuitant is alive.4. Joint life, last survivor with return of purchase price: in this case, the annuity is
first paid to annuitant. After the death of annuitant, the spouse starts getting a pension, which is an amount that equal to the annuity paid to the annuitant. After the death of last survivor, the purchase price is return to the beneficiary.
Open market offer:
ICICI Prudential giving offer to you to buy a pension from any other insurer of your choice at the time of vesting. So, you have the freedom to take the best offer available in the market.
Riders:
1. Critical illness riders (standalone)2. Major surgical assistance riders3. Accident and disability benefit riders4. Accident benefit riders
General feature:
Surrender: After 3 policy years
Tax benefit: 80 CCC on premium paid.
Power to choice the retirement date between 50 to 70 years.
31
LIFE TIME PENSION II
Who can apply?
If your age between 18 & 65 years. In that case you have opted to choose a zero death benefit. Else, you have to between 18 & 60 years of age.
Sum Assured at inception:
Option 1: You can opt for a zero sum assured.
Option 2: You can opt for a sum assured will be equal to product of your annual
contribution & term.
32
Pension investment plans:
1. Pension Maxi miser: If high is your priority, this is the plan for you. You can enjoy long term application from a portfolio that is investment primarily and equity related securities.
2. Protector: If on the other hand, your priority is steady return, you can opt for the Protector Plan. Here, you can accumulate a steady income at low risk across a medium to long term period from a portfolio, which is primarily in fixed income securities.
3. Balancer: If you prefer a balance of growth and steady returns, you can choose our Balancer plan. This would ensure you that your portfolio is invested in equity and equity linked securities, as well as in fixed income securities.
4. Preserver: The objective of this plan is to ensure capital protection by invest in very low risk investment like the cash and call money markets. However the return generated may also be on the lower side due to the investment pattern. At inception, investment up to 20% can be allocation to this fund.
Asset allocationfund
Asset mix Potential Risk-reward
Maxi miser Equity and related securities max 100%Debt, money market & cash max 25%
High
Balancer Debt, money market & cash min 60%Equity and related securities max 40%
Average
Protector Debt instruments: max 100% money market & cash : max 25%
Moderate
Preserver Debt instruments: max 50% Money market & cash: min 50%
Low
Premium allocation :
33
Allocation of contribution would be depending on the first contribution made.
The allocation will be as follows:
Allocation(Rs.) 1 year 2 years 3-10 years Thereafter
10,00-49,999 78% 88% 99% 100%
50,000 & above 83% 83% 99% 100%
Other cheers:
1. Top up charges: Top up charges will be 1 % of top up value.2. Switch charges: Except from 4 free switches allowed every policy year, all
a. Other switches will be charged @ Rs. 100 per switch
3. Administrative charges: A fixed charge of Rs. 20 per month will be levied by
a. Cancellation of units.
4. Fund related charges: The annual fund, related charge for the various funds will be as follows:
Fund type Investment chargesMaxi miser 1.50%Balancer 1.00%Protector 0.75%Preserver 0.75%
Surrender Value:
During 1st policy year 95% of policy investedDuring 2nd policy year 96% of policy investedDuring 3rd policy year 97% of policy investedDuring 4th policy year 100% of policy invested
34
Maturity benefit:
1. Life annuity: annuity for life
2. Life annuity with return of purchase price: Life annuity for annuitant with return of the purchase price of beneficiary.
3. Life Annuity Guaranteed for 5, 10, and 15 years: Guaranteed annuity is paid for chosen term and after that the annuity as long as the annuitant is alive.
4. Joint life, last survivor with return of purchase price: In this case, the annuity first paid to annuitant. After the death of the annuitant, the spouse start getting a pension, which is an amount that is equal to the annuity paid to the annuitant. After death of the last survivor, the purchase price is returned to the beneficiary
5. Joint Life, Last Survivor with Return of Purchase Price: In this case the annuity is first paid to annuitant. After death of the annuitant, the spouse starts getting a pension, which is an amount that is equal to the annuity paid to annuitant.
Riders:-1. Waiver of premium.2. Accident & death benefit riders.
INTRODUCTION TO CHANNEL DEVELOPMENT AND RECRUITMENT
Who is an insurance advisor? An agent is the representative of an insurance company who sells different policies or product to its clients.Another term used for insurance agents is advisors; ICICI Prudential life insurance company Ltd introduced this term.Today in life insurance companies’ advisors are known to be the backbone of the whole system. Advisors/agents do not work on monthly payroll basis; they receive a certain commission on the policies they sell to the clients. The eligibility required to become an advisor/agent is that he/she should be 12th pass to operate in urban area and 10th pass for rural areas. Before a person becomes an advisor/agent he/she has to undergo 100hrs training according to IRDA norms, which is compulsory.A person who wants to be an advisor has first to fill a recruitment form and has to pay a fee of Rs. 1500/- in favor of ICICI Prudential. Then, he has to pass a test, which is compiled by IRDA. After he gets through that test he is awarded a license and then his
35
training starts in the company regarding the insurance business. ICICI Pru provides this training in 3 modes as per the suitability of the advisors viz:- 1) Classroom training: - it is a Full Time Training with a period of 17 days regular between 9 am to 5pm at the training centers allotted to the advisor. 2) Online training: - it is another mode of training where the company provides CD’S and books to the advisor for his own study. 3) Classroom training: - it is a Part Time Training with a period of 36 days.
Advisor Role:
To provide ongoing financial advice for his/her clients: Identify future clients Making appointments Conduct financial review meetings with prospects/clients. Close sales Get referrals Provide service to clients. Follows internal sales and reporting system.
Working Environment of an advisor/agent. To be a part of world-class sales team. Work from your own office or residence. Work full time or part time (an advisor can work part time by undergoing only 50hrs of
training and 100hrs training is for full time advisors.) Earn Commission, Bonus & Incentives. No upper limits on earnings. Flexible career.
Opportunities for an Advisor/agent
No startup capital required. Flexible working environment. Be your own boss. Unlimited earning potential. To be a part of a world-class team.
Commission Structure .
Different products will have different commission structures.For example: Single Premium products will have a commission of 2%.Renewal Commission is paid at the following rates:
36
2nd yr: 7.5% 3rd yr: 7.5% 4th yr: 5% 5th yr: 5% onwards
MOST PREFERRED PROFILES TO RECRUIT AS ADVISIORS/AGENTS
Housewives Income tax consultant Charted accountant Sales personnel’s working in
Automobile dealership Credit card co. Telecom Mutual fund
DSA’s M R’s Doctors Teachers VRS holders Advisors of other insurance companies Post office agents Businessmen
37
Accountants OI in an organization
How does an advisor/agent work?
Firstly an advisor/agent has to make a list of 100 people that he/she knows.
Then the advisor/agent makes a call to these clients and tries to fix an appointment.
When an appointment is fixed, the advisor/agent meets the customer & tries to sell the product.
After that the adviso/agent asks for reference of maximum number of people from the client.
The reference is asked in context to make future calls and whole procedure is repeated again.
Insurance advisory survey
Gender of the respondent
Frequency Percentage Validpercentage
Cumulativepercentage
FemaleMaleTotal
155065
21.678.4100
21.678.4100
21.6100
38
Inference:As we can see from the figure itself that there is a sex ratio difference between males and females, 4:1 in the insurance industry. It is mainly because advisor’s job is demanding in terms of rigorous fieldwork and hence women finds difficult to cope up with it.
Educational qualification of the respondent
Frequency percentage Validpercentage
Cumulativepercentage
Inter GraduateProfessionalTotal
5402065
7.761.530.8100
7.761.530.8100
7.769.2100
39
Inference:
Among insurance advisors, it has been observed that 61.5% of them are graduate in comparison to professionals like CV’s or MBA’s who joint 30.8%. While intermediates pass people just make 7.7% of the whole lot.
Source of information of the customer
Frequency percentage Validpercentage
Cumulativepercentage
News PapersTV &WebRelatives/FriendsOther sourcesTotal
1514241265
23.121.536.918.5100
23.121.536.918.5100
23.144.681.5100
40
Inference:
As per the point of view of the 36.9% advisors, the customers usually get to know about the policies & products of any insurance company via their relatives or friends while 23.1% advisors gave the credit to the advertising in the newspapers as the source of information to the people. TV & Web had 21.5% of the advisors favoring them.
MATHODOLOGY USED TO RECRUIT ADVISOR
The basic aim of the company in providing us with this assignment was to find out the people’s perception of their brand in the market and via this increasing their advisor base by encashing on their brand name.
1) Hence, our sales pitch in recruiting the good profile advisor was based on:
Money:
41
For those who are needy, greedy and speedy Excellent back end support, attractive payments and benefits and Extensive training for that edge over competition
Reward and Recognition
For those who want to be recognized and honored
Several programs including foreign trips, seminars etc. Selected club memberships like president’s club, ICICI Pru Star
Club, MDRT club etc. Achievements rewarded with trophies and certificates as well with
Point rewards to give you a flying start.
Carrier Prospects
For people who want to climb the success ladder fast.
Programs like PINNACLE, AGENCY CHAMPION and TIGER TEAM has been devised.
This whole strategy was based on the MASLOW‘s THEORY OF NEEDS.
2) Then, instead of going personally and meeting these alresdy well-establishedAdvisors, we tried the concept of holding BOP ( Business Opportunity presentation).
For this we drafted an invitation, which was a gimmick so as to entice these advisors into coming to our own office, and it was based on the pretext of ONE MILION POLICY CELEBRATIONS, the target that ICICI PRU has just achieved.
And result was good in the sense that we were able to convert 5 to 10 advisors for our company then and there only.
42
3) Then, we targeted high profile people like CA’s or MBA’s or govt.People.
For that, we drafted a letter in which we just gave them a hang of what our proposal was for them (for recruiting them as our advisors) and asked them to contact us themselves if they are interested.We got at least 10-15 calls of people who were interested and wanted to become our advisors. Meetings were held with them and they were converted.The BOP letter and then invitation for the BOP i.e. Business Opportunity presentation has been attached at the end in the annexure.
SWOT ANALYSIS
Strength
Vast untapped market:
In a country of 1 billion people there is a huge potential market for life insurance products. In India the penetration of the insurance sector in the rural and semi-urban areas is low. There is a market of 900 million for life insurance and 200 million for householder’s insurance policy. In addition to this the affluent section can be tapped for Overseas Mediclaim and Travel Insurance policies.
Huge pool of skilled professionals:
43
Whether it is banks or insurance companies, there is no dearth of skilled professionals in India to carry out a successful banc assurance venture.
Weakness:
Lack of networking among bank branches
In spite of growing emphasis on total branch mechanization (TBM) and full computerization of bank branches, the rural and semi-urban banks have still to see information technology as an enabler. Complete integration of branch network involves huge investments for creation IT and communication infrastructure.
Low savings rate
Though we have a huge market for insurance policies, the middle class who constitutes the bulk of this market is today burdened under inflationary pressures. The secret lies in including savings habit but considering the amount of surplus funds available with the middle class for investing in future security, the ability to save is very nominal.
Opportunities:
Data mining:
Banks have a huge customer database which has to be properlyleveraged. Target segments should be identified and tapped.
Wide distribution networks of banks provides a great opportunity to sell insurance products through banks
Another potential area of growth of banc assurance is exploiting the corporate customers and tying up for insurance of the employees of corporate clients.
Threats:
Human Resource Challenges
44
Success in banc assurance venture requires a change in mindset. Though we have a large talent pool, the inability to sell complex insurance products on the part of bank professionals and their reluctance to learn can be severe setback. There has to be a change in the thinking, approach and work culture.
Non-response from the target groups can also pose a challenge as it happened in the USA in 1980s
FUTURE GROWTH PROSPECTS OFCOMPANY
In the total market share, LIC has reduced its share from 91% to 70%. This means that private insurance players have got more margins in their hands which have increased from 9% to 30% in last 2years only.
In the private market share, ICICI PRU leads with 39% of the market share in its hand followed by Bajaj Allianz with 18% shares and then comes BirlaSun Life with 15% market shares.
45
ICICI PRU has been maintaining its NO 1 position since last 5 years because of its prolific product range and commanding brand equity. It has a highest capital base of Rs. 925 crores and a team of more than 56,300 week-trained advisors. It enjoys a brand recall rate of 92% and gives credit of its success to the 5 core values-
Integrity
Customer
Boundary Less
Ownership
Passion
COPETITIVE ANALYSIS WITHHDFC-STANDARD LIFE
HDFC Standard Life Insurance Company is a joint venture between India’s largest housing finance provider, HDFC and Europe’s largest mutual life assurance The Standard Life Assurance Company (U. K).Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance industry for 175 Years by combining sound financial judgment with integrity and reliability.It is the Largest Mutual Life company in Europe and has total assets of Rs. 5,50,000 crore.
Training activities for agents/advisors:
46
As per IRDA guidelines, 100hrs training is compulsory.
Both online & classroom training are available.
Training is compulsory with both part-time &full time Options.
A clear exam is conducted by IRDA, the minimum Qualification required is-
12th pass for urban areas10th pass for rural areas.
Commission Structure:
Depends on the product, like on savings20-40% Ist year premium. On investment On pension 7.5%
Modes & ways through which the company recruits agents.
Direct contacts. Newspaper adds. Consultants. Member of the company can introduce a new member.
Current agent force
500-600 in NOIDA.
Top 5 USP’s (Unique Selling Proposition) Of HDFC Std. Life
Best insures according to Outlook.
47
Well supported by foreign Ist private sector life insurance Company to be granted a license.
Declared bonus every year from the day of incorporation (only company.)
Provides fast service to the customers in terms of claim
RECOMMENDATIONS AND SUGGESTIONS
During the exposure of 2 months I had in the insurance industry via ICICI Prudential, it helped me to develop the basic understanding of how this industry works and the work experience & knowledge gained has also helped me to give the recommendations as stated below:
An insurance policy is a product, which needs a lot of convincing before it can be sold because what I analyzed in this internship that there are very few people who have a basic knowledge about life insurance especially the lower middle class society. So, it is essential for the advisor to know what the customer actually needs and then letting the customer know what benefits he will get out of it.
48
The limitation here is how to win the trust of people when so many companies are offering the same product range. Here, ICICI Pru need to encash brand name because after the survey I conducted what I concluded is that after LIC if people know any other insurance company is then it is ICICI Prudential.
During the calls where I went along with the Unit manager, I observed that people in general have the perception that insurance is all about getting discount in tax. People should be made realize that it is a great way of saving for the future too.
Besides doing market research, my other job was also to increase the advisor base of the company. And company preferred the profiles of the already established insurance advisors of the other company especially the LIC ones. What I suggest is that before approaching these prominent agents we need to do a SWOT analysis of the co. they are into. Like LIC Agents usually complain of LOW returns and hence ICICI Pru can tap them on this loophole of LIC.
Instead of approaching these good profile agents personally, the company can hold Seminars or Club Meeting because every one comes for free lunches. Once they come, they can be given Business Opportunity presentation about the incentive, commission structure etc ICICI Pru is offering to its advisors.
Since the commission structure has been fixed by the IRDA only so no insurance company can give more commission on products but every company has a different mode of distributing commission, since ICICI pru has all kind of products and policies with it (including the products which LIC have and even those which LIC do not have) thus every agent can earn as much (NO UPPER LIMIT ON EARNINGS) as he wants because he has more choice to offer to the customer. This can be one of the sales pitch for the ICICI Pru.
49
LEARNINGS
The basic aim of the company in providing us with this assignment was to find out the people’s perception of their brand in the market and via this increasing their advisor base by encashing on their brand name.
I learned how to recruit insurance advisor and convinced them for job profile.
When I was doing this project I met several person & collected their response, some of them give positive response, some gave negative response & some can’t say any thing, they don’t believe in private sector. I also personally met 9 to 10 person in a day. I also do Tele-calling & appointment. It is very helpful in the collection of the customer database.
Under this project:
No. of customer met: more than 50
50
No. of customer called (phone):500
ICICI Prudential Life Insurance Company is the number one private life insurance company in India with a market share of 4202%. Birla sun life stands second in private life insurance companies with a market share of 1805%. Looking in private sector ICICI Prudential has been the dominant player because the amount of gap between the market shares is huge.
But if we analyze in all sectors of life insurance then LIC has been the most dominant player since 1956. The impact of LIC has been so much in both rural and urban areas that people use the term LIC instead of lie insurance.\
ICICI prudential faces a big challenge in front of them to stay in the race with Life insurance Corporation (LIC) because with the entrance of other companies like Max New York, HDFC Standard Life & Birla Sun Life the competition has become tougher.
But insurance is also growing day by day, India has a population of 1.2 billion and only 33.3% population is insured. This means insurance is an upcoming industry but ICICI prudential has to work a lot on their strategies to overcome LIC.
CONCLUSION
The project has various facets and the tenure in my SIP has been the best part in my life
as there were moments of happiness, sorrow and stress. At the end the winner is “True
Manager” and one who has control on his emotions. I have learned to live the hard way
and I came to know my strength and weaknesses. It was really valuable for me as I got a
project, which could test my skills in various areas, and this helped me a lot to decide the
field I am most confident and successful.
The Indian Insurance Industry has suddenly witness a major boom. Being a globalize
market, the customer seeks and demand world-class products. In global market
everything is bench marked and compared. The market for Insurance business is found
51
vast; the potential policyholders are in a very good number.
And their needs and requirements are not identical.
The market share of life insurance business is comparatively superior to general
insurance business. Free markets and globalization have increased competition in the
changed scenario; life insurance business has to reengineer its approaches and strategies
on quality basis.
So, the study on life insurance business with the reference to quality becomes more
important, this quality-based strategy called as ‘service sigma’. Six sigma is a
management philosophy. It is a customer based approach realizing the defects are
expensive. It is considered to be a way or path to achieve strategic business results. Fewer
defects in the operation mean lower costs and improved customer loyalty. It is not a
single activity, it is a continuous process.
The project revolves round the above-mentioned approach with a right kind of mix of
technical and marketing aspects of life insurance industry.
I would like to conclude my report with a wish that all employees of ICICI Prudential
would remember me for days to come and with all due respect like to again thank Mr.
Neural Chatham, Sales Manager for giving me an opportunity to serve the company and
giving me days which have been the most learning for me.
Overall, the life insurance and pension sector is set for rapid changes and growth in the
years ahead. Delivering service, building trust and being innovative are key areas in
which any company will have to excel in order to do well in the long road ahead.
Different companies will take different approaches and it would be myriad of solutions
that will be found to delight the Indian customer
In a world dominated by isms of many kinds, there is a need for advertising to reflect on
the efficacy of emotion in advertising. But before that, an understanding of whether we
52
are at all emotional people needs to be established. I, for one,
believe the average Indian is selectively emotional—he looks for emotions that he can
express in public where he seeks peer approval or in private whom I guess happens most
of the time. For advertising to look at emotion as an idiom can both be tricky as also
tiresome
1. The analysis revealed that it’s not just a myth that people avert from private
companies but is a harsh reality.
2. LIC enjoys credibility over other private players in the industry.
3. Out of 250 sampled people just 90 of them have taken some policies from the private
companies, which is actually small in number.
4. People who had taken various policies from the private companies are fully satisfied
because of the attractive returns, capital guarantee on some plans and easy liquidity as
one of the major factors.
5. People look for handsome returns along with security in all of their investment plans.
Although insecurity is one major factor that avert people to invest in the private
companies.
6. Many people in the market were not aware of the fact that IRDA governs the
functioning of all the private companies along with LIC.
7. People’s faith in the private players actually increased after the IRDA regulation fact
was revealed to them.
8. There are many people who are greatly influenced by their natural circle while some
are ignorant about the existence of the private insurance players and the plans they are
offering and the rest of the surveyed people have already taken some policies from
LIC and are pretty satisfied.
53
BIBLOGRAPHY
Study Material for AMFI exam
Investment update report of other AMC’S
Various Business Newspaper
Magazines
Economic Times The Times Of India India Today
54
WWW.AMFINDIA.COM
WWW.ICICIPRULIFE.OM
WWW.INVESTMSRTINDIA.COM
WWW.PERSONALFN.COM
WWW.ECONOMICTIMES.COM
WWW.STOCKINDIA.COM
ANNEXURE
Questionnaire
Name:
Age: 30-35 35-40 40-45 45-50
Gender: Male Female
Address:
Tel. No.:
Email ID:
55
Occupation
Business
Service
Annual Income
Less than 1 laky
1 laky -2.5lakh
2.5 lakh-5 laky
More than 5 laky
1. Have you taken any life insurance policy?
Yes
No
2. From which company have you bought an insurance product?
ICICI Prudential Life Insurance Co. Ltd.
Max New York Life Insurance Co. Ltd.
HDFC Standard Life Insurance Co. Ltd.
TATA AIG Life Insurance Company Ltd.
Any other
3. Which product have you bought?
Term Insurance
Whole life plan
Retirement plan
Unit linked policy
56
Other
4. What influenced you to buy an insurance product?
Print Media
Radio
Television
Campaigns/ hoardings
Agent/Friend
5. Which is the most attractive advertisement in your view?
ICICI Chintamani
Max New York Dravid
HDFC Sar utha ke jiyo
Any other
6. If you have bought your product from ICICI Prudential Life Insurance Co. Ltd.
then what is your satisfaction level?
Completely satisfied
Satisfied
Not Satisfied
Dissatisfied
Completely Dissatisfied
7. Which is the most effective punch line in your view?
We cover you. At every step in life.
Your partner for life
Making life easier for you
Your dreams. Our commitment.
With you always
8. What do you feel about the punch line of ICICI Prudential Life Insurance Co.
Ltd.?
Catchy
57
Low Profile
Generate feeling of security
Touches your heart
9. What do you think about the ICICI Prudential advertisements?
Aggressive
Comparable with its competition
Low Profile
Unsatisfactory
GLOSSARY
A
Accident: A sudden and unintentional happening leading to a loss. In the context of life
insurance, it is a sudden and unforeseen happening that causes disability or death of the
policyholder.
Accidental Death Benefit: An add-on benefit in which the benefit is payable in the event
of death of the life insured as a result of an accident provided he has opted for this
benefit.
Accumulation Period: The time interval between the commencement of the policy and
the time when benefits are paid out. It is established by the insured.
58
Actuary: A professional with expertise in technical aspects
of insurance. An actuary is a statistician and mathematician by training.
Agent (Life Advisor): A representative of an insurance company authorized to sell
insurance policies.
Annuity: The amount paid under an annuity scheme at stipulated intervals like
yearly/half yearly/quarterly/monthly intervals.
Authority: The Insurance Regulatory and Development authority established under sub-
section (1) of section 3 of the Insurance Regulatory and Development Authority Act,
1999.
B
Beneficiary: The person who receives the benefit of a policy in case of death during the
term or the policyholder who receives the benefit on maturity.
Bonus: Bonus is the amount added to the basic sum assured under a with-profit life
insurancepolicy.
C
Claim: A request for payment of the contractual benefits by the insurer that is made by
the insured or the beneficiary.
Concealment: When an applicant withholds critical information from the insurance
company, it is called concealment. For instance, if the applicant is suffering from a
terminal disease and he does not notify the company of this, he is concealing information.
D
Death Benefit: The benefit received by the beneficiary (ies) on the death of the insured.
E
Endowment Plan: A plan in which the amount is paid to a policyholder if he outlives the
tenure of the contract or to the beneficiary if the insured person dies before the date on
which the policy matures.
59
F
Free look period: A free look period gives the client an option to review the terms and
conditions of the policy within 15 days from the date of receipt of the policy document.
G
Group Life Insurance: Life insurance of a group of people under a policy. This group
should already be in existence and should not have come together only for the purpose of
insurance.
H
Human Life Value: The present value of the family's share of the breadwinner's future
earnings is considered as Human Life Value, for purposes of life insurance.
I
IRDA: The acronym for the Insurance Regulatory and Development Authority of India,
it is the apex body overseeing the insurance business in India. It protects the interests of
the policyholders, regulates, promotes and ensures orderly growth of the insurance
industry and for matters connected therewith or incidental thereto.
L
Lapse: The termination of an insurance policy due to non-payment of premia.
Level Premium Life Insurance: Life insurance for which the premium remains
unchanged year after year.
License: Permission granted by IRDA to the applicant for commencement of the ins.
business in India.
M
60
Money Back Plan: A plan in which part of the sum assured
is paid back to the policyholder at regular intervals.
Maturity Date: The date on which the policy term expires.
N
Nomination: A provision by which a policyholder can designate any person to receive
the policy money in the event of his death.
Nominee: A person selected by the policyholder to receive the benefit in case of death of
the life insured.
P
Policyholder: The person who owns the policy, in this case, a life insurance policy.
Premium: The amount paid by a policyholder to the insurance company, in order to be
covered under a policy.
R
Rider: An add-on benefit available at the option of the policyholders that may alter
certain features of a policy by increasing or restricting benefits.
Reinsurance: The transfer of part of the risk by the original insurance company to one or
more reinsurers.
S
Selling price: This is the price at which you can sell units, based on the market value per
unit, less the relevant trading costs associated with selling the assets.
Surrender Value: A value payable if you want to surrender the plan before a claim
arises.
T
61
Term: The tenure of the policy.
Term Cover: A type of life insurance where the sum assured is payable only in the event
of death of the insurer during the specified term.
W
Whole Life Insurance: A life insurance policy where benefits are payable to a
beneficiary on death of the insured, whenever that occurs. The premium payment can
happen for a specified number of years or throughout life.
62
WE COVER YOU, AT EVERY STEP IN LIFE
Thank You
63