reliance life insurance company
DESCRIPTION
insurance financeTRANSCRIPT
[1]
Industrial Project Report
On
RELIANCE LIFE INSURANCE COMPANY
LIMITED
Under the guidance of
Mrs Pragyan Pushpanjali
Submitted by:-
Priyadarshani Kumari
Imba, 6th sem
R.no-25
CUJ/I/2010/IMBA/28
[2]
ACKNOWLEDGEMENT
"Gratitude is not a thing of expression; it is more matter of feeling."
There is always a sense of gratitude which one express towards others for their help and
supervision in achieving the goals. This formal piece of acknowledgement is an attempt to
express the feeling of gratitude towards people who helpful me in successfully completing
of my training.
I would like to express my deep gratitude to our Head of Department of Business
Administration Prof. T.Ghoshal for providing me an opportunity to work on this Industrial
Project on Insurance Industry. I would also thank our guide Assistant Prof. Pragyan
Pushpanjali who always gave valuable suggestion throughout the pursuance of this project.
Above all no words can express my feelings to my parents, friends and all those persons
who supported me during my project.
[3]
CONTENTS
S.No. Particulars Page No.
1 Insurance overview
Meaning of Insurance
Importance of Insurance
Principles of Insurance
Insurable laws
History of Insurance
Time line in Insurance history
Types of insurances
World existence and Indian existence
Insurance law regulations in India
Entry of private companies: A landmark decision
Regulatory authorities
Meaning of Life Insurance
History of Life Insurance
Key features of Life Insurance
Benefits of Life Insurance
Role of Life Insurance in the growth of economy
5-17 5 5-6 6-7 7 8 9 9-10 10-12 12 12 12-13 14 14-15 15-16 16-17 17
2 Insurance in India
Insurance companies
Top Insurance Policies
India insurance industry major problems
17-21 18-19 19-21 21
3 INTRODUCTION TO THE COMPANY
Executive Summary
About Reliance Life Insurance
History
Achievement
Role of IT at Reliance Life Insurance
Mission
Core Values
Future Plans
Head – Office
Branches
Benefits of Reliance Life Insurance Policies
22-28 22 22 23 23 23-25 25 25 26 26 26 27-28
4 Product mix
Solutions for Individuals
Solutions for group
Traditional Plans
Unit linked Plans
29-40 29-31 32-33 33-37 38-40
5 Comparative Analysis
41-48
[4]
Why Compare Best Life Insurance Policies in India
Why Compare Best Life Insurance Plans in India
Comparative Analysis Of Top 10 Life Insurance Companies
Subsequent Growth rate in insurance industry
Insurance industry contribution to GDP
Comparing Reliance Life Insurance, Max New York Life Insurance, MetLife Insurance
Comparing LIC, Reliance Life Insurance, ICICI Prudential Life Insurance
41 41-42 42-43 43-44 44-46 47 48
6 Research objective
Research Methodology
Research Design
Research constraints
49 49-50 50 51
7 Benefits of this project 51
8 Compare reliance child life insurance and LIC komal jeevan
52-55
9 Market share of Life Insurance industry 56-57
10 Capital fund of life insurance industry 58
11 Distribution channel 59-60
12 Promotional Programmes & Target Segment 60
13 Findings and Conclusions 61
14 Swot Analysis 62
15 Recommendations/Suggestions 63
16 Limitations 64
17 Bibliography and References 65
[5]
Insurance:- An overview
Insurance is a form of risk management primarily used to safeguard against the risk of an
uncertain loss.
In general an insurer, or insurance carrier, is a company selling the insurance; the insured, or
policyholder, is the person or entity buying the insurance policy. The amount to be charged
for a certain amount of insurance coverage is called the premium.
The transaction involves the insured assuming a guaranteed and known relatively small loss
in the form of payment to the insurer in exchange for the insurer's promise to compensate
(indemnify) the insured in the case of a financial (personal) loss. The insured receives a
contract, called the insurance policy, which details the conditions and circumstances under
which the insured will be financially compensated.
MEANING OF INSURANCE
Insurance may be described as a social device to reduce or eliminate risk of loss to life and
property. Insurance is a collective bearing of risk. Insurance is a financial device to spread
the risks and losses of few people among a large number of people, as people prefer small
fixed liability instead of big uncertain and changing liability.
Insurance can be defined as a “legal contract between two parties whereby one party called
insurer undertakes to pay a fixed amount of money on the happening of a particular event,
which may be certain or uncertain.” The other party called insured pays in exchange a fixed
sum known as premium.
Insurance is desired to safeguard oneself and one’s family against possible losses on account
of risks and perils. It provides financial compensation for the losses suffered due to the
happening of any unforeseen events.
IMPORTANCE OF INSURANCE
Insurance constitutes one of the major segments of the financial market. Insurance services
play predominant role in the process of financial intermediary. Today insurance industry is
one of the most growing sectors in India. There is lot of potential in the Indian Insurance
Industry.
There are many issues, which require study. The scope of the study of insurance industry of
India would be very great as there are on-going developments in the industry after the
opening of the sector.
The major issue right now is the hike in FDI (Foreign Direct Investment) limit from 26% to
49% in the insurance sector. Government may in near future allow 49% FDI in Insurance.
This would lead to more capital inflow by foreign partners.
[6]
Another major issue is the effects on LIC after the entry of private players in the market.
Though market share of LIC has been affected, it has improved in terms of efficiency.
There are number of other hot topics like penetration of Health Insurance Rural marketing
of insurance, new distribution channels, new product ranges, insurance brokers’ regulation,
incentive scheme of development officers of LIC etc. So it offers lot of scope for studying the
insurance industry.
Right now the insurance industry has great opportunities in a country like India or China
which huge population. Also the penetration of insurance in India is very low in both life and
Non-life segment so there is lot potential to be tapped.
Before starting the discussion on insurance industry and related issues, we have to start
with the basics of insurance. So first we understand what is insurance? How the word
‘insurance’ is different from the word ‘assurance’? Etc.
PRINCIPLES OF INSURANCE
An insurance contract is based on some basic principles of insurance.
(1) Principle of “Uberrima Fides” or Principle of utmost good faith
It means “maximum truth”. Both the parties should disclose all material information
regarding the subject matter of insurance.
(2) Principle of indie
This means that if the insured suffers a loss against which the policy has been made, he shall
be fully indemnified only to the extent of loss. In other words, the insured is not entitled to
make a profit on his loss.
(3) Principle of subrogation
This means the insurer has the right to stand in the place of the insured after settlement of
claims in so far as the insured’s right of recovery from an alternative source is involved. The
insurer before the settlement of the claim may exercise the right. In other words, the
insurer is entitled to recover from a negligent third party any loss payments made to the
insured. The purposes of subrogation are to hold the negligent person responsible for the
loss and prevent the insured from collecting twice for the same loss. The concept of ‘Third
Party Claims’ is based on the same principle.
(4) Principle of causa proxima
The cause of loss must be direct and an insured one in order to claim of compensation.
[7]
(5) Principle of insurable interest
The assured must have insurance interest in the life or property insured. Insurable interest is
that interest which considerably alters the position of the assured in the event of loss taking
place and if the event does not take placed, he remains in the same old position.
Insurable laws:-
Insurance law is the practice of law surrounding insurance, including insurance policies and
claims. It can be broadly broken into three categories - regulation of the business of
insurance; regulation of the content of insurance policies, especially with regard to
consumer policies; and regulation of claim handling.
Until 2005 all, common law jurisdictions require the insured to have an insurable interest in
the subject matter of the insurance. An insurable interest is that legal or equitable
relationship between the insured and the subject matter of the insurance, separate from
the existence of the insurance relationship, by which the insured would be prejudiced by the
occurrence of the event insured against, or conversely would take a benefit from its non-
occurrence.
Utmost good faith
A strict duty of disclosure and good faith applies to selling most financial products that
contributed to the Global Financial Crisis.
The Doctrine of utmost good faith - is present in the insurance law of all common law
systems. An insurance contract is a contract of utmost good faith. The most important
expression of that principle, under the doctrine as it has been interpreted in England, is that
the prospective insured must accurately disclose to the insurer everything that he knows
and that is or would be material to the reasonable insurer. Something is material if it would
influence a prudent insurer in determining whether to write a risk, and if so upon what
terms. If the insurer is not told everything material about the risk, or if a material
misrepresentation is made, the insurer may avoid (or "rescind") the policy, i.e. the insurer
may treat the policy as having been void from inception, returning the premium paid.
Warranties
In commercial contracts generally, a warranty is a contractual term, breach of which gives
right to damages alone; whereas a condition is a subjectivity of the contract, such that if the
condition is not satisfied, the contract will not bind. By contrast, a warranty of a fact or state
of affairs in an insurance contract, once breached, discharges the insurer from liability under
the contract from the moment of breach; while breach of a mere condition gives rise to a
claim in damages alone.
[8]
HISTORY OF INSURANCE
The concept of insurance is believed to have emerged almost 4500 years ago in the ancient
land of Babylonia where traders used to bear risk of the carvan by giving loans, which were
later repaid with interest when the goods arrived safely.
The concept of insurance as we know today took shape in 1688 at a place called Lloyd’s
Coffee House in London where risk bearers used to meet to transact business. This coffee
house became so popular that Lloyd’s became the one of the first modern insurance
companies by the end of the eighteenth century.
Marine insurance companies came into existence by the end of the eighteenth century.
These companies were empowered to write fire and life insurance as well as marine. The
Great Fire of London in 1966 caused huge loss of property and life. With a view to providing
fire insurance facilities, Dr. Nicholas Barbon set up in 1967 the first fire insurance company
known as the Fire office.
The early history of insurance in India can be traced back to the Vedas. The Sanskrit term
‘Yogakshema’ (meaning well-being), the name of Life Insurance Corporation of India’s
corporate headquarters, is found in the Rig Veda. The Aryans practiced some form of
‘community insurance’ around 1000 BC.
Life insurance in its modern form came to India from England in 1818. The Oriental Life
Insurance Company was the first insurance company to be set up in India to help the
widows of European community. The insurance companies, which came into existence
between 1818 and 1869, treated Indian lives as subnormal and charged an extra premium
of 15 to 20 percent. The first Indian insurance company, the Bombay Mutual Life Assurance
Society, came into existence in 1870 to cover Indian lives at normal rates.
The Insurance Act, 1938, the first comprehensive legislation governing both life and non-life
branches of insurance were enacted to provide strict state control over insurance business.
This amended insurance Act looked into investments, expenditure and management of
these companies.
By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and 75 provident
societies carrying on life insurance business in India. Insurance business flourished and so
did scams, irregularities and dubious investment practices by scores of companies. As a
result the government decided to nationalize the life assurance business in India. The Life
Insurance Corporation of India (LIC) was set up in 1956. The nationalization of life insurance
was followed by general insurance in 1972.
[9]
TIME LINE IN INSURANCE HISTORY
(MAJOR LANDMARKS)
1818 British introduced the life insurance to India with the establishment of the
Oriental Life Insurance Company in Calcutta.
1850 Non-life insurance started with Triton Insurance Company.
1870 Bombay Mutual Life Assurance Society is the first India owned life insurer.
1912 The Indian Life Assurance Company Act enacted to regulate the life insurance
business.
1938 The Insurance Act was enacted.
1956 Nationalization took place. Government took over 245 Indian and foreign
insurers and provident societies.
1972 Non-life business nationalized, General Insurance Corporation (GIC) came into
being.
1993 Malhotra committee was constituted under the chairmanship of former RBI
chief R. N. Malhotra to draw a blue print for insurance sector reforms.
1994 Malhotra committee recommended re-entry of private players.
1997 IRDA (Insurance Regulatory and Development Authority) was set up as a
regulator of the insurance market in India.
2000 IRDA started giving license to private insurers. ICICI Prudential, HDFC were first
private players to sell insurance Policies.
2001 Royal Sundaram was the first non-life private player to sell an insurance policy.
2002 Bank allowed selling insurance plans as TPAs enter the scene, insurers start
setting non-life claims in the cashless mode.
Types of insurances:-
Life insurance is an insurance coverage that pays out a certain amount of money to the
insured or their specified beneficiaries upon a certain event such as death of the individual
who is insured. This protection is also offered in a Family take-up plan, a Sharia-based
approach to protecting you and your family.
The coverage period for life insurance is usually more than a year. So this requires periodic
premium payments, either monthly, quarterly or annually.
The risks that are covered by life insurance are:
Premature
Income during retirement
Illness
The main products of life insurance include:
Whole life
Endowment
[10]
Term
Investment-linked
Life annuity plan
Medical and health
General Insurance
General insurance is basically an insurance policy that protects you against losses and
damages other than those covered by life insurance. For more comprehensive coverage, it is
vital for you to know about the risks covered to ensure that you and your family are
protected from unforeseen losses.
The coverage period for most general insurance policies and plans is usually one year,
whereby premiums are normally paid on a one-time basis.
The risks that are covered by general insurance are:
Property loss
for example, stolen car or burnt house
Liability arising from damage caused by yourself to a third party
Accidental death or injury
The main products of general insurance include:
Motor insurance
Fire/ House owners/ Householders insurance
Personal accident insurance
Medical and health insurance
Travel insurance
Insurance:- World existence and Indian existence
The global insurance scenario has undergone profound changes during the last few years,
accentuated by the terrorist attack on the World Trade Centre on 9/11/2001. Coincidentally,
the major world stock markets suffered a steep decline in value towards the end of the last
century, following the dot Com bubble burst and the unprecedented corporate scandals led
by Enron and WorldCom. Hurricanes like the Katrina, the Wilma and the others, in addition,
have bankrupted a substantial capitalization of insurers and reinsurers built up over
decades. One estimate has put it that out of a total capitalization of $750 bn the WTC attack
and the stock market failures due to the burst of dot com bubble alone wiped out a capital
of $ 250 bn of the industry in one stroke.
These financial blows have resulted in a large number of insurers/reinsurers going bankrupt
and several others suffering lowered ratings by reputed rating agencies. Despite these
[11]
setbacks the industry has recovered from such serious and unexpected financial losses and
the industry has begun to look as solid and resilient as ever.
The world insurance premium in 2005 was estimated at $3400 bn by Swiss Re. Sigma. 60%
of the premium came from life insurance. The world’s population in 2005 was estimated at
6450 mn and it’s GDP at $ 44,450 bn. The life insurance market is growing faster in the
emerging markets due to rising incomes and a growing younger working population.
It was also observed that the GDPs grew faster than the insurance premiums, both life and
non-life, reducing the levels of insurance penetration (IP) in comparison with those of 2004.
The combined ratio for the developed markets was slightly above 100% and the industry
showed strong profitability. Insurance penetration is measured as the percentage ratio of
premiums to GDP. Insurance density is measured as the gross premiums to population per
capita. These measurements on a comparative basis show the insurance progress and
sophistication of the insurance markets.
In 2004, global insurance premiums amounted to $3.3 trillion. The global insurance market
grew by 7.6% in 2007 to reach a value of $3,688.9 billion. In 2012, the global insurance
market is forecast to have a value of $4,608.5 billion, an increase of 24.9% since 2007. Life
insurance dominates the global insurance market, accounting for 59.7% of the market′s
value.
Insurance scenario in india:-
Latest reports:-
Premium collection by general insurance companies increased by 24.7 per cent year-on-year
in September 2012 at Rs 6, 059.02 crore (US$ 1.1 billion), according to the data compiled by
the sector regulator Insurance Regulatory and Development Authority (IRDA). The total
premium stood at Rs 34,001.09 crore (US$ 6.18 billion) for April-September 2012.
In terms of premium collections for life insurance segment, private players collected Rs
7,095 crore (US$ 1.29 billion) in April-September 2012 period while state-owned Life
Insurance Corp of India (LIC) recorded a remarkable 24 per cent y-o-y growth in premium
collections at Rs 15, 532.7 crore (US$ 2.82 billion) during the period. LIC’s support helped
the industry post a 15 per cent y-o-y growth in premium collected in the first half of
2012-13.
With a huge population base and large untapped market, insurance industry is a big
opportunity area in India for national as well as foreign investors. India is the fifth largest life
insurance market in the emerging insurance economies globally and is growing at 32-34%
annually. This impressive growth in the market has been driven by liberalization, with new
players significantly enhancing product awareness and promoting consumer education and
information. The strong growth potential of the country has also made international players
[12]
to look at the Indian insurance market. Moreover, saturation of insurance markets in many
developed economies has made the Indian market more attractive for international
insurance player
Insurance law regulations in India
Insurance law regulations in India manage all the matters related to various insurance
companies in the country. The concept of insurance in India dates back to the ancient
period. The idea of getting anything insured gained its momentum from the overseas
traders who used to practice marine insurance in somewhat crude form. Social insurance
was the first of its kind which took shape in India. Since its introduction, the history of
insurance in India has undergone many phases. Earlier, the insurance companies in India
were privatized.
Entry of private companies: A landmark decision
In the later years, insurance companies were nationalized with the help of insurance laws. In
the most recent move in this regard, the Insurance law regulations in India permitted the
entry of private companies and foreign investment in the sector. This remarkable decision
gave the industry a breath of fresh air. Much of the development and growth of the
insurance sector in India owes to the decision of the government to nationalize the
insurance business in India and to allow private and foreign insurance companies to
establish their business in the country.
Regulatory authorities:-
There are 4 regulatory authorities which oversee different functioning of the insurance
companies in India and provide guidelines to them. These include:
Insurance Regulatory and Development Authority (IRDA)
Tariff Advisory Committee
Ombudsmen
Insurance Association of India
Insurance Regulatory and Development Authority (IRDA)
Insurance Regulatory and Development Authority (IRDA) is a very powerful body which
oversees important aspects of the functioning of the insurance companies in India. It was
set up by the government to safeguard the interest of the insurance policy holders of the
country.
Some of the important powers, duties and functions of Insurance Regulatory and
Development Authority (IRDA) include:
[13]
To regulate, ensure and promote the orderly growth of the insurance
business
To prescribe regulations on the investment of funds by insurance companies
To regulate the maintenance of the margin of solvency
To adjudicate the disputes between insurers and intermediaries
To supervise the functioning of the Tariff Advisory Committee
Tariff Advisory Committee
The prime duty of Tariff Advisory Committee is to regulate and control the rates, benefits,
terms and conditions offered by the insurance companies working in India.
Insurance Association of India:
All the insurance companies functional in India are members of the Insurance Association of
India. It has 2 councils under its patronage. These are known as:
Life Insurance Council
General Insurance Council
Ombudsmen
Ombudsmen play important role in regulating and ensuring smooth functions of the
insurance companies. They are appointed to address all complaints relating to settlements
of claims. Anyone having a grievance against an insurance company can approach
Ombudsmen for redressed.
An ombudsman is an official, usually appointed by the government or by parliament but
with a significant degree of independence, who is charged with representing the interests of
the public by investigating and addressing complaints of maladministration or violation of
rights.
[14]
MEANING OF LIFE INSURANCE
There are three parties in a life insurance transaction: the insurer, the insured, and the
owner of the policy (policyholder), although the owner and the insured are often the same
person.
Another important person involved in a life insurance policy is the beneficiary. The
beneficiary is the person or persons who will receive the policy proceeds upon the death of
the insured.
Life insurance may be divided into two basic classes – term and permanent
• Term life insurance provides for life insurance coverage for a specified term of years for a
specified premium. The policy does not accumulate cash value.
• Permanent life insurance is life insurance that remains in force until the policy matures,
unless the owner fails to pay the premium when due.
• Whole life insurance provides for a level premium, and a cash value table included in the
policy guaranteed by the company. The primary advantages of whole life are guaranteed
death benefits; guaranteed cash values, fixed and known annual premiums, and mortality
and expense charges will not reduce the cash value shown in the policy.
• Universal life insurance (UL) is a relatively new insurance product intended to provide
permanent insurance coverage with greater flexibility in premium payment and the
potential for a higher internal rate of return. A universal life policy includes a cash account.
HISTORY OF LIFE INSURANCE
Risk protection has been a primary goal of humans and institutions throughout history.
Protecting against risk is what insurance is all about. Over 5000 years ago, in China,
insurance was seen as a preventative measure against piracy on the sea. Piracy, in fact, was
so prevalent, that as a way of spreading the risk, a number of ships would carry a portion of
another ship's cargo so that if one ship was captured, the entire shipment would not be lost.
In another part of the world, nearly 4,500 years ago, in the ancient land of Babylonia,
traders used to bear risk of the caravan trade by giving loans that had to be later repaid with
interest when the goods arrived safely. In 2100BC, the Code of Hammurabi granted legal
status to the practice. It formalized concepts of “bottom” referring to vessel bottoms and
“respondent” referring to cargo. These provided the underpinning for marine insurance
contracts. Such contracts contained three elements: a loan on the vessel, cargo, or freight;
an interest rate; and a surcharge to cover the possibility of loss. In effect, ship owners were
the insured and lenders were the underwriters.
[15]
Life insurance came about a little later in ancient Rome, where burial clubs were formed to
cover the funeral expenses of its members, as well as help survivors monetarily. With
Rome's fall, around 450 A.D., most of the concepts of insurance were abandoned, but
aspects of it did continue through the Middle Ages, particularly with merchant and artisan
guilds. These provided forms of member insurance covering risks like fire, flood, theft,
disability, death, and even imprisonment.
During the feudal period, early forms of insurance ebbed with the decline of travel and long-
distance trade. But during the 14th to 16th centuries, transportation, commerce, and
insurance would again re-emerge.
Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of
Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda.
The term suggests that a form of “community insurance" was prevalent around 1000 BC and
practiced by the Aryans.
And similar to ancient Rome, burial societies were formed in the Buddhist period to help
families build houses, and to protect widows and children.
KEY FEATURES OF LIFE INSURANCE
1) Nomination: -
When one makes a nomination, as the policyholder you continue to be the owner of the
policy and the nominee does not have any right under the policy so long as you are alive.
The nominee has only the right to receive the policy monies in case of your death within the
term of the policy.
2) Assignment:-
If your intention is that your policy monies should go only to a particular person, you need
to assign the policy in favour of that person.
3) Death Benefit: -
The primary feature of a life insurance policy is the death benefit it provides. Permanent
policies provide a death benefit that is guaranteed for the life of the insured, provided the
premiums have been paid and the policy has not been surrendered.
4) Cash value: -
The cash value of a permanent life insurance policy is accumulated throughout the life of
the policy. It equals the amount a policy owner would receive, after any applicable
surrender charges, if the policy were surrendered before the insured's death.
[16]
5) Dividends: -
Many life insurance companies issue life insurance policies that entitle the policy owner to
share in the company's divisible surplus.
6) Paid-Up Additions: -
Dividends paid to a policy owner of a participating policy can be used in numerous ways,
one of which is toward the purchase of additional coverage, called paid-up additions.
7) Policy Loans: -
Some life insurance policies allow a policy owner to apply for a loan against the value of
their policy. Either a fixed or variable rate of interest is charged. This feature allows the
policy owner an easily accessible loan in times of need or opportunity.
8) Conversion from Term to Permanent: -
When in need of temporary protection, individuals often purchase term life insurance. If
one owns a term policy, sometimes a provision is available that will allow her to convert her
policy to a permanent one without providing additional proof of insurability.
9) Disability Waiver of Premium
Waiver of Premium is an option or benefit that can be attached to a life insurance policy at
an additional cost. It guarantees that coverage will stay in force and continue to grow
BENEFITS OF LIFE INSURANCE
1) Risk cover: -
Life Insurance contracts allow an individual to have a risk cover against any unfortunate
event of the future.
2) Tax Deduction: -
Under section 80C of the Income Tax Act of 1961 one can get tax deduction on premiums up
to one lakh rupees. Life Insurance policies thus decrease the total taxable income of an
individual.
3) Loans: -
An individual can easily access loans from different financial institutions by pledging his
insurance policies.
[17]
4) Retirement Planning: -
What had provided protection against the financial consequences of premature death may
now be used to help them enjoy their retirement years. Moreover the cash value can be
used as an additional income in the old age.
5) Educational Needs: -
Similar to retirement planning the cash values that flow from one’s life insurance schemes
can be utilized for educational needs of the insurer or his children.
ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY
The Life Insurance Industry has an enviable track record among public sector units. It has a
Consistent profit and dividend paying record accompanied by a steady growth in its financial
resources.
Through investments in the Government sector and socially- oriented sectors the Industry
has contributed immensely to the nation's development. The industry is recognized as one
of the largest financial Institutions in the country. The ventures initiated by the industry in
the areas of Mutual Fund, Housing Finance has done exceedingly well in recent years.
To protect the country's foreign exchange reserves, the reinsurance arrangement are so
organized that maximum retention is made possible within the country while at the same
time protecting interests of the policy holders.
Insurance in India
The Confederation of Indian Industry states that the insurance sector of the country has
been witnessing a consistent growth rate of late and its present worth is 41 billion US
dollars.
The industry has of late achieved a yearly growth rate within 32 and 34 percent and this
makes it the 5th best among emerging economies around the world. The various entities of
the industry are also bringing out newer products on a regular basis to attract their
customers.
As per rules, the upper limit of foreign direct investment permitted in this sector is 26
percent. However, this has to be done through the automatic route and the investor needs
a license from Insurance Regulatory and Development Authority (IRDA).
At present there are 22 life insurers in India. The IRDA has recently taken away the tariffs of
the interest rates and this has provided insurers greater independence when it comes to
deciding the price of their insurance policies. The insurance industry has also become more
competitive as a result.Yet another important factor affecting this sector has been the
recent financial meltdown.
[18]
Insurance companies in India:-
Public Sector
Government of India Fully owned 4 companies:
National Insurance Co Ltd (public sector)
New India Assurance Co Ltd (public sector)
Oriental Insurance Co Ltd (public sector)
United India Insurance Co Ltd (public sector)
Private Sector
Bajaj Allianz General Insurance
Bharti AXA General Insurance
Cholamandalam MS
Future General India Insurance
HDFC ERGO General Insurance
ICICI Lombard
IFFCO Tokyo
Liberty Videocon General Insurance Co Ltd
L & T General Insurance
Magma HDI General Insurance Co Ltd
Raheja QBE General Insurance
Reliance General Insurance
Royal Sundaram
SBI General Insurance
Shriram General Insurance
Tata AIG General
Universal Sompo General Insurance
Star allied
Standalone health insurance companies
Private Sector
Apollo Munich Health Insurance
Max Bupa Health Insurance
Religare Health Insurance Company Ltd
Star Health and Allied Insurance company Ltd
Ggsbs private insurance Ltd
Public Sector
[19]
Government of India Fully owns 1 company:
Life Insurance Corporation of India
Private Sector
AEGON Religare Life Insurance
Aviva Life Ia-life
Bajaj Allianz Life Insurance
Bharti AXA Life Insurance Co Ltd
Birla Sunlife
Canara HSBC Oriental Bank of Commerce Life Insurance]
Star Union Dai-ichi Life Insurance
DLF Pramerica Life Insurance
HDFC Standard Life Insurance Company Limited
ICICI Prudential
IDBI Federal Life Insurance
India First Life Insurance Company
ING Vysya Life Insurance
Kotak Life Insurance
Max Life Insurance
PNB MetLife India Life Insurance
Reliance Life Insurance Company Limited
Sahara Life Insurance
SBI Life Insurance Company Limited
Top Insurance Policies
Following are the featured insurance policies of various insurers in India:
Company Product
LIC Jeevan Vaibhav
ICICI Prudential ICICI Pru iCare
Reliance General Insurance Reliance Private Car Insurance Reliance Travel Care for Students
Bajaj Allianz Cash Rich Family Floater Health Guard Plan Car insurance
HDFC Life Click2Protect HDFC LIFE SMART WOMAN PLAN
Tata AIG Insurance
Tata AIG Motor Insurance Tata AIG Travel Insurance Tata AIG Wellsurance Family
Kotak Life Insurance
Kotak Assured Protection Plan Kotak Assured Income Plan
[20]
Kotak Assured Investment Plan
Aviva
Aviva Health Secure Aviva i-Life
Future General
Future General Smart Life Future General Health Suraksha
MetLife
Retirement Plans Met Monthly Income Plan
Star Union Dai-ichi Life Insurance Suraksha Kavach
Shriram Life Insurance
Shri Life Wealth Plus Money Back Shriram Ujjwal Life SP
Bharti AXA Bharti AXA Life eProtect
Aegon Religare iTerm
IDBI Federal Termsurance Wealthsurance Childsurance Lifesurance Healthsurance Incomesurance Loansurance Homesurance Bondsurance Microsurance
Canara HSBC OBC Life Insurance Dream Smart Plan Grow Smart Plan Future Smart Plan Secure Smart Plan Smart Sanchay Plan
DLF Pramerica Life Insurance
Income Rakshak DLF Pramerica Family Income DLF Pramerica Family First DLF Pramerica U-Protect
IndiaFirst Life Insurance IndiaFirst Maha Jeevan Plan
Sahara Life Insurance Sahara Vatsalya-Jeevan Bima
Apollo Munich Health Insurance Optima RESTORE
Star Health Insurance
Family Health Optima Star Unique Health Senior Citizen Health Insurance
IFFCO TOKIO General Insurance
Auto Protector Policy Individual Medishield Policy
New India Assurance
Householder's Policy Motor Insurance Policy
[21]
Overseas Mediclaim Policy Fire & Machinery Policy Industrial All Risk Policy Shopkeeper's Policy
Oriental Insurance Oriental's Motor Insurance Policy Happy Family Floater Scheme
National Insurance Car Insurance
Cholamandalam MS General Insurance
Chola MS Private Car Chola MS Student Travel Chola MS Family Healthline
HDFC Ergo
Travel Insurance HDFC Ergo Health Suraksha
Universal Sompo General Insurance Householder's Insurance Policy Shopkeeper's Insurance Policy Motor Insurance Policy Individual Health Bills
L&T Insurance my:health Medisure Prime Insurance
India insurance industry major problems
Following are some of the major problems plaguing the insurance industry in India:
Focus on actuarial pricing
Regulatory misunderstanding
Investment regulations
Solvency regulation
Claims settlement procedures
Data clarity
Distribution channel issues
[22]
RELIANCE LIFE INSURANCE
EXECUTIVE SUMMARY
Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of 100 percent
shareholding in AMP Sanmar Life Insurance Company Limited. Reliance Life Insurance
Company Limited is officially launched on February 1, 2006. This was after obtaining the
required regularity approvals from the Registrar of Companies and the Insurance Regulatory
and Development Authority. Reliance Life Insurance is the part of the Reliance Capital.
Reliance Life Insurance has plenty of plans on the anvil. It has also 118 branches, with strong
presence in South and a bouquet of products catering savings protection and investment
need of individuals and corporate. The head-office of it is at Chennai.
The company has already added 600 employees in addition to the 1000 plus staff of the
erstwhile AMP Sanmar Life Insurance Company Limited. Reliance Life Insurance aims to be
the consumer’s preferred life insurer by understanding and meeting his needs.
Think Bigger, Think Better!
ABOUT RELIANCE LIFE INSURANCE
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance -
Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector
financial services companies, and ranks among the top 3 private sector financial services and
banking companies, in terms of net worth. Reliance Capital has interests in asset
management and mutual funds, stock broking, life and general insurance, proprietary
investments, private equity and other activities in financial services. Reliance Capital Limited
(RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India
under section 45-IA of the Reserve Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial services sector in
India and aims to become a dominant player in this industry and offer fully integrated
financial services.
Reliance Life Insurance is another steps forward for Reliance Capital Limited to offer need
based Life Insurance solutions to individuals and Corporate.
[23]
HISTORY
Reliance Capital Limited announced the launch of its life insurance business on February 1,
2006. This was after obtaining the required regulatory approvals from the Registrar Of
Companies and the Insurance Regulatory and Development Authority.
It was in August 2005 that the ball was set rolling when Reliance Capital Limited, the
financial arm of Reliance – Anil Dhirubhai Ambani Group (ADAG) – announced the
requisition of 100% shareholding in AMP Sanmar Life Insurance Company Limited; and the
formal transfer of shares took place in October 2005.
The company will issue all policy contracts under the Reliance Life Insurance Company
limited name. All the existing policy contracts also stand transferred to the Reliance Life
Insurance entity with all the original contractual terms and commitments intact.
ACHIEVEMENTS
Largest Private Life Insurance in terms of Number of Policies for two consecutive
years as of 31st March 2012
A wide network of 1230 branches and 1,50,000 advisors Over 9 million policies
RLIC continues to be amongst the foremost Life Insurance companies in India to be
certified ISO 9008:2001
Winner of “Best Non-Urban Coverage” Award at Indian Insurance Awards 2011
RLIC’s Boundaries for Books Campaign won the 'Silver' at the Indian Digital Media
Awards (IDMA) 2012, under Best Integrated Campaign – Social Cause and Best Use of
Social Network – Social Cause
Amongst the top 3 Most Trusted Service Brands in the Insurance category as per the
Brand Equity‘s ‘Most Trusted Service Brands 2011’ Survey
ROLE OF INFORMATION TECHNOLOGY AT RELIANCE LIFE INSURANCE
1) World Class Data Centre: -
They plan to establish a Primary Data Centre at Navi Mumbai (Dhirubhai Ambani Knowledge
City) which will cater to their company needs across India, with fail-over capability to their
Chennai Data Centre with in the same business day in occurance if an incident or Disaster
happens.
2) Inter Office Connectivity: -
All their Branch / Area and Regional offices will be Inter connected to their Data Centre with
a 24x7 access to Core Applications like Lotus Mail, Life-Asia and Internet Applications. This
will enable their associates to work faster and better with high-speed Internet connectivity
and also ensure faster Turnaround Time for their customers.
[24]
3) Customer Care Centre: -
They will host a centralized Customer Care Centre at Dhirubhai Ambani Knowledge City at
Navi Mumbai, which cater services to internal and external queries and complications. A
customer Relationship Management Tool (CRM) and Lead Management System (LMS) are in
progress.
4) Web Portal: -
This portal will be an interface between both internal employees and their external users.
Some of the functions included in their portal are Policy Tracking Systems, Corporate News,
Quality Checking System, Under Writing Medical System, and Agent Management System
etc.
5) R World:-
Reliance Mobile R-World will provide online information about their Company, Products,
and Policy Services to their existing customers, Agents/Advisors and Lead Generators.
6) SMS Alerts: -
SMS Alerts will be provided to their Sales Managers about the latest happenings like
Contests and Campaigns, Employee Alerts will include Company News and
Welcome/Birthday/Anniversary message etc. Customer Alerts will include
Welcome/Birthday/Anniversary message, Policy Dispatch Details, Policy Servicing SMS like
Premium Receipt and Renewal Premium reminders etc.
7) Life and Group Asia: -
Single Life and Group Life details will be captured and managed by Life and Group Asia. A
common middleware between these applications will enable Group Life Customers to view
their individual Single Life Insurance Plan details taken with Reliance Life Insurance and vice
versa.
8) Advisor Lounge: -
It is a dedicated area for Reliance Life Insurance Agents/Advisors in all the branches across
India. This Lounge will be equipped with desktops and printers with Internet connectivity,
where their Advisors can bring in the prospects and can have discussions across the table
and they can create and print quotes. The Agents/Advisors can use this area to service their
existing customers.
9) Document Management System: -
DMS will enable both policy issuance and contract servicing through an automated
workflow, which yields a faster Turnaround Time to both internal and external users. This
[25]
application will enable them to have a paperless office and thus mitigate the risk of losing
vital records/papers.
10) Wireless Data Access: -
This will enable identified Top Sales Managers and Top Advisors to access real time data for
both LMS and CRM on the fly through Handheld PDA device.
11) SAP – ERP Modules: -
SAP (Finance and HR Modules), will automate the Expense, Travel and Leave Management
Systems
Vision
Empowering everyone live their dreams.
Mission
Create unmatched value for everyone through dependable, effective, transparent and
profitable life insurance and pension plans.
Our Goal
Reliance Life Insurance would strive hard to achieve the 3 goals mentioned below:
Emerge as transnational Life Insurer of global scale and standard
Create best value for Customers, Shareholders and all Stake holders
Achieve impeccable reputation and credentials through best business practices.
CORE VALUES
Reliance Life Insurance Company Limited has some core values which are listed as follows:
1) Result Oriented
2) Performance Driven
3) Customer Focused
4) Learning and Development Oriented
5) Employee Centric
6) Informal and Fun
[26]
FUTURE PLANS
Forty-four new branches to be opened across the country in the coming months; and
a pan India presence with 162 branches in the coming year.
A state-of-the-art customer care centre will provide continuous, responsive services
to the caller and promptly address queries, collate feedback and suggestions from
the caller, who may be both prospective and existing clientele and from channel
partners in Chennai and Mumbai.
It will be launching additional products aimed at providing unparalleled service to its
valued clientele.
HEAD – OFFICE
Reliance Life Insurance Company Limited,
The Trapezium,
39, First Floor,
Nelson Manickam Road,
Chennai – 600 029.
BRANCHES
They have so many branches and substations in the India. They have around 160
branches in the India. And they have planned to open more branches across the country
in the coming months.
•Branches located in Ranchi
Balbir Complex, Ground Floor, Main Road, Adjacent to Web World, Hinoo, Ranchi,
Jharkhand-834002
Phone no.-0651-3207112/0651-3207114
Office No.501 A, Panchvati Plaza,Kutchery Road, Ranchi, Jharkhand-834001
0651-3982417/0651-3982418
[27]
Benefits of Reliance Life Insurance Policies
The name “Reliance” is very popular in telecom sector, but its rapid growth in every
sphere no matter whether it is Real estate, financial sector, or insurance sector, is not
unknown to anyone. That is the reason when India’s corporate sector came into lime
light globally, the Reliance Pvt. Ltd. Company stood at the third position, among those
corporate companies, which has helped Indian economy to boom its financial services,
and is still maintaining the name and fame of being the fastest growing Corporate
Company of India which is spreading its root of success globally.
The Reliance life insurance Pvt. Ltd. Company is the joint venture of Anil Dhirubhai
Ambani Group and Indian finance, insurance group, which has teamed up around five
years back and made a commendable success when over 1.5 million people connected
with Reliance life insurance Company while buying its varies life insurance policies.
While recording this tremendous growth in the Company’s success graph, the owner of
Reliance Life insurance company (Mr. Ambani) expanded the branches of Reliance Life
Insurance Company, and today, it has 800 branches only in India, where approximately
60,000 advisers are working. The Reliance Life Insurance Company is a trusted name,
and the fact that it is the only ISO 9001:2000 certified Company further proves it well.
From child plans to retirement plans, protection plans to savings and investment plans
one can choose any policy of Reliance Life Insurance for the better assurance of future
savings.
Here are the name of Reliance Life Insurance Products and policies:
Reliance Child’s Super Invest Assure Policy and Reliance Secure Child Policy best cope up
with your child’s future expenditure on studies.
However, if you want to take a health plan then, the Reliance Wealth + Health Policy is
the best choice.
Moreover, there are various protection plans that covers life log insurance, like
1) Reliance Connect 2 Life
2) Reliance Credit Guardian Plan
3) Reliance Term Plan
4) Reliance Special Term Plan
5) Reliance Simple Term Plan
6) Reliance Special Credit Guardian Plan
7) Reliance Whole Life Plan
[28]
In addition, apart from protection plans, pension and retirement plans are even
beneficial, which promises higher return along with the flexibility of the policy. These
plans are
1) Reliance Super Automatic Investment Plan
2) Reliance Super Golden Years Plan – Plus
3) Reliance Money Guarantee Plan
4) Reliance Super Golden Years Plan
5) Total Investment Plan II – Pension
Moreover, if you want to invest your money in the market to get higher returns or just
want a savings plan than following policies will suit you best.
Reliance Special Endowment Plan
Reliance Super Invest Assure Plus Plan
Reliance Money Guarantee Plan
Reliance Super Golden Years Plan – Value
Reliance Super Automatic Investment Plan
Reliance Savings Linked Insurance Plan
Reliance Cash Flow Plan
Reliance Super Market Return Plan
Lastly, there is even an additional option for employers for better savings. That is:-
Employee Voluntary Benefits
Employee Protection Solutions
Employers Liability Solutions
[29]
PRODUCT MIX
Life insurance products are designed to suit the requirements of customers. Fundamentally
the product provide for:
Risk cover
Investment
Health cover
In every product, to a certain degree, risk cover is imperative for it to fall under the category
of insurance. Based on the coverage of the product, the premiums are calculated and the
customer pays accordingly.
In order to suggest the right product, it is essential for an agent to understand the
requirements of the customer well.
Solutions for Individuals
In today's world of ever increasing challenges and uncertain times, we understand your
primary responsibility of safeguarding your family's financial security. Nothing is as
important as ensuring your family’s protection against any financial hardships that may
occur at any time.
It is our aim to ensure that we help meet your financial goals without any hassles and at the
same time, protect your loved ones in any unfortunate event, with absolutely no financial
worries.
Reliance Life Insurance Company Limited presents a wide range of plans that will help you
make wise investments, protect your family, secure your child’s future and even chalk out a
sound plan for your retirement.
Plans:-
1. Protection Plans
2. Savings & Investment Plans
3. Unit linked Plans
4. Child Plan
5. Retirement Plan
6. Health Plan
1. Protection Plans
In today’s uncertain world, there could be calamity at every step of the life. It is up to you to
ensure that your family stays protected always.
[30]
Reliance Protection Plans helps you do exactly the same. You have a wide range of options
to choose a plan from. Right from limited period plans to lifetime protection plans, you can
opt for the one that suits your lifestyle.
While we understand that nothing can compensate for the loss of a life, we intend to
provide you the peace of mind. Investing in Reliance Protection Plans would mean your
family’s future is in safe hands.
Reliance Life Insurance eTerm Plan
Reliance Term Plan
Reliance Simple Term Plan
Reliance Special Term Plan
Reliance Credit Guardian Plan
Reliance Special Credit Guardian Plan
2. Savings & Investment Plans
Reliance Life Insurance Super Endowment Plan
Reliance Life Insurance Guaranteed Money Back Plan
Reliance Life Insurance Money Multiplier Plan
Reliance Cash Flow Plan
Reliance Endowment Plan
Reliance Super Five Plus
Reliance Whole Life Plan
Reliance Connect 2 Life Plan
3. Unit linked Plans
Unit Linked Insurance Plans generally called as ULIP are investment cum protection plans
that offers you dual benefits of availing market linked returns on your investments along
with life insurance cover.
You have an option to choose from a variety of funds available under the selected plan
along with the flexibility to manage and switch between funds.
Reliance Life Insurance presents you a wide range of Regular and Single premium ULIP plans
that suits your investment need.
• Reliance Life Insurance Guaranteed Maturity Insurance Plan
• Reliance Life Insurance Classic Plan - II
• Reliance Life Insurance Classic Plan – Limited Premium
• Reliance Life Insurance Pay Five Plan
[31]
• Reliance Life Insurance Classic Plan
4. Child Plans
Being a parent is one of the joys of life. Your child looks up to you and depends on you for
love, protection and support. You want to provide your child with the best in life.
The Reliance Child Plan helps you save systematically so that you can secure your child’s
future needs. Be it higher education, his or her first home or any other requirement, you will
always be there for your child when he or she needs you.
So, invest in a Reliance Child Plan right away—it is the best gift you could ever give your
child.
Reliance Child Plan
5. Retirement Plans
You are a young and earning individual. The income you earn allows you to enjoy life, your
only worry being whether you will be able to continue the same lifestyle after retirement.
A Reliance Retirement Plan will help you save money for your retirement. It ensures that
you continue to get some income after retirement thereby ensuring that you do not have to
depend on any other person or make any compromises to maintain the same lifestyle.
Invest in a Reliance Retirement Plan today and enjoy life after retirement on your own
terms.
Reliance Life Insurance Smart Pension Plan
Reliance Immediate Annuity Plan
6. Health Plan
"We Protect, We Care"
We are sure you would like to do too
convey that you care for your family through Reliance Life Insurance
Reliance Life Care for You Advantage Plan
Reliance Life Care for You Plan
[32]
Solutions for Groups
As an employer, you believe in providing the best opportunities for your employees while
keeping the interests of the company in mind. How will you strike a balance between the
two?
Reliance Life Insurance offers you a win-win solution with Solutions for Groups. Not only are
your employees covered for life from accidents and disablements, you can also efficiently
manage their future with gratuity and pension plans.
So invest in Reliance Solutions for Groups to give your employees a sense of belonging and
feel at peace knowing that you have fulfilled your obligation towards your corporate family.
Plans:-
1. Employees Liability Solutions
2. Employee Protection Solutions
1. Employees Liability Solutions
As an employer, you have a lot to think about, especially how you can go about managing
your employee’s future.
The best way is to invest in Reliance Employers Liability Solutions. Plan the way ahead for
your employee with the Group Superannuation and Group Gratuity scheme. This will help
you to efficiently manage your employee’s well-being.
So take care of your greatest assets—your employees—by investing in Reliance Employers
Liability Solutions!
Reliance Life Insurance Traditional Group Superannuation Plan
Reliance Life Insurance Group Leave Encashment Plus Plan
Reliance Traditional Group Gratuity Plan
Reliance Life Insurance Group Gratuity Plus Plan
2. Employee Protection Solutions
Your employees mean a lot to you. You want to protect them from any mishap whatsoever
and show them that you care about their well–being.
By investing in Reliance Employee Protection Solutions Group Term, you can give your
employees total cover from accidents and disabilities for life.
Provide your employees with security and a feeling of being part of a family—invest in
Employee Protection Solutions today!
[33]
Reliance Jan Samriddhi Plan
Reliance Group Credit Shield Plan
Reliance Group Term Assurance Plan
Group Term Insurance Plan – EDLI
TRADITIONAL PLAN:-
1) Reliance Term Plan
2) Reliance Whole Life Plan
3) Reliance Child Plan
4) Reliance Endowment Plan
5) Reliance Special Endowment Plan
6) Reliance Cash Flow Plan
7) Reliance Credit Guardian Plan
8) Reliance Special Credit Guardian Plan
Each of the above traditional plans is discussed as follows:
1) Reliance Term plan: -
This insurance policy is designed for those who only want life cover for the protection of
their family, and do not wish to save for themselves. It can also be useful to business firms
that wish to provide financial security to their business against the sudden loss of partners
or valuable manpower. Since there is no saving element or bonus provision, the premium is
very low. Hence, this is a high-risk plan with a low premium.
• Features: -
a) Purely a term plan
b) Entry age minimum 18 years and maximum 65 year
c) Maximum premium paying term is 30 year
d) Loan facility N.A.
e) Maturity amount = Sum assured
[34]
2) Reliance Whole Life Plan: -
This insurance policy is designed for people who do not wish to avail of any benefits
themselves but wish to create an immediate estate to protect their family by availing of
insurance cover on their life at a very low cost.
• Features: -
a) It is a whole life insurance policy with profits
b) Low cost life cover
c) Maturity age is 85 year or 99 years last birthday as chosen
d) Maturity amount = Sum assured+ Vested bonus
e) Tax benefit is available
3) Reliance Child Plan: -
This insurance policy is designed for people who wish to save money for a future time when
there will be a recurring need for substantial amounts of money. This is especially true when
it comes to paying large sums of money for higher education as and when your son or
daughter is studying to become an Engineer, a Doctor or specialize in some other field, or is
perhaps planning to go abroad. This money is payable in equal instalments over the last 4
years of the policy term.
• Features: -
I. Minimum entry age is 20 year and maximum 60 year
a) Minimum sum assured is Rs. 25,000.
b) Minimum premium paying term is 5 year and maximum 20 year
c) Tax benefit is available
d) Maturity amount = Four equal instalment of sum insured in last four year plus vested
bonus in the last year
e) Loan facility is available
4) Reliance Endowment Plan: -
Reliance Life Insurance’s Reliance Endowment Plan is the key to all your financial needs. It is
an inexpensive and easy way to protect you, your family or your business.
[35]
In a nutshell this plan will keep you financially prepared for all the special occasions in your
life - your daughter’s wedding, your child’s university education or even a new office for
your business - by eliminating the burden that a shortage of money creates.
In the event of your untimely death, Reliance Endowment Plan will also assist your loved
ones through this difficult time by the financial support that it provides.
Reliance Endowment Plan also gives you the additional benefit of participating in the
company’s profits, which you will receive at the end of the policy period.
• Features: -
a) Entry age minimum is 5 year and maximum 65 year
b) Maturity age minimum is 18 year and maximum 75 year
c) Minimum premium paying term is 5 year and maximum 35 year in case of regular and
in case of single 15 year
d) Minimum sum assured is Rs. 25,000 or as determined by the minimum premium
e) Maximum sum assured is Rs. 5,00,000 (entry age below 18 years and no limit for entry
age 18 and above)
f) Premium mode annual, half yearly, quarterly and monthly (by salary deduction only)
g) Loan up to 90% of the surrender value of the policy
h) Maturity amount = Guaranteed sum assured + Reversionary bonus
5) Reliance Special Endowment Plan: -
This insurance policy is designed for people who wish to combine savings with extended
security. The unique feature of this policy is that life protection continues for five years after
you have stopped the payment of premium. Payment of sum assured at the end of premium
paying term and extension of life cover thereafter for the full sum assured for a period of
5years, are characteristics of the policy.This plan also participates in the profits.
• Features: -
a) Entry age minimum 12 year and maximum 65 year
b) Minimum sum assured is Rs. 25,000
c) Minimum premium paying term is 10 year and maximum 40year
d) Unique feature of this policy is that five year life protection continues after you have
stopped the payment of premium
[36]
e) Tax benefit is available
f) Under this policy bonus is compounded yearly
g) Loan facility is available
h) Maturity amount = Full sum assured before maturity date +Vested bonus at the time
of maturity date
6) Reliance Cash Flow Plan: -
This insurance policy is designed for those who have a recurring need for reinvestment in
business or look for short-term investment channels. The advantage of the policy is that
they need not part with a sizable amount of money at any one time, but create, through
regular premium payments, a periodic return of lump sums which become available for
reinvestment at higher returns, while providing simultaneously, substantial life cover.
Alternatively, it can be used to meet any immediate financial crisis in the family like your
son's college admission, your daughter's engagement, and renovation of your home or
perhaps, a holiday abroad.
The money is payable in instalments. The first instalment is paid at the end of the 4th year
and thereafter at the end of every 3rd year.
• Features:-
a) Plan with profits
b) Minimum entry age is 15 year and maximum is 63 year
c) Maximum premium paying term is 34 year
d) Loan facility is not available
e) In case of death full sum assured + accrued bonuses up to the date of death is payable
immediately
f) In case of survival up to maturity date all premiums paid
g) Rider accident death and critical illness
h) Mode of payment is available
[37]
7) Reliance Credit Guardian Plan: -
This insurance policy is designed for those who not only safeguards individuals but also
families and businesses from the financial hardship that could arise from unfortunate and
unexpected death.
Features: -
a) Loan protection against home, home improvement, two wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for single and regular is available
e) Premium paying term is 2/3 of loan period and remaining period paid by the company
8) Reliance Special Credit Guardian Plan: -
This insurance policy is designed for those who not only safeguards individuals but also
families and businesses from the financial hardship that could arise from unfortunate and
unexpected death, disability or critical illnesses.
• Features: -
a) Loan protection against home, home improvement, two wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for regular and single is available
e) Premium payment term is 2/3 of loan period and remaining period paid by the
company
f) Maturity amount = All the premium paid amount
g) Tax benefit is available
[38]
UNIT LINKED PLAN
A unit-linked policy is a life assurance policy in which the benefits depend on the
performance of a portfolio of shares.
Each premium paid by the insured person is split: a part is used to provide life assurance
cover, while the balance (after the deduction of costs,expenses, etc.) is used to buy units in
a unit trust.
In this way, a small investor can benefit from investment in a managed fund without making
a large financial commitment. As they are linked to the value of shares, unit linked policies
can go up or down in value. Policyholders can surrender the policy at any time and the
surrender value is the selling price of the units purchased by the date of cancellation less
expense). A small part of the contribution is used for providing life cover and the balance is
invested in unit. Legal heirs are entitled to the amount of insurance cover and entitled units
in case of death of the insured.
Reliance Life Insurance Company Limited has also offered the two
Unit Linked Plans, which are listed as follows:
1) Reliance Market Return Plan
2) Reliance Golden Years Plan
Amongst the above plans the Reliance Market Return Plan is the largest selling plan of the
Reliance Life Insurance Company Limited.
[39]
The above two ULIP plans are discussed as follows:
1) Reliance Market Return Plan: -
Reliance Market Return Fund is the unit-linked product that helps you invest in the financial
markets in a combination of investment instruments of your choice. You can enjoy the
returns from the markets without the trouble of monitoring and managing your own
investment portfolio and keeping track of the market movements. At the same time your
investment premiums provide you with insurance cover. Reliance Market Return Fund unit-
linked insurance plan provides you with a basket of fund options that balances your return
and risk exposure while providing life cover at the same time.
Features: -
a) Minimum entry age is 30 days and maximum entry age is 65 year
b) Maximum policy term 40 year and minimum policy term 5 year
c) Mode of premium as annual, quarterly, half yearly and monthly Rs. 1000 (for salary
deduction only) and Rs.2500 (standing order/credit card)
d) Top up premium minimum Rs. 2500
e) Option of investment fund
i. Capital secure 100% fixed interest securities
ii. Balanced minimum 80% fixed interest securities and maximum 20% in equity
iii. Equity 100% equity
iv. Growth minimum 60% fixed interest securities and maximum 40% in equity
f) Loan facility is not available
g) One switches every year free and subsequent switches charged 1% of the amount
switched
h) Partial withdrawals per year under regular and single premium options is 2 times
i) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawals is Rs. 10,000
[40]
2) Reliance Golden Years Plan: -
Reliance Golden Years Plan, The Reliance Life Insurance ‘no-worry stay happy’ retirement
plan. Reliance Golden Years Plan is a flexible package that provides freedom of choice in
choosing the type of investment, life cover, vesting options such as commuting and annuity
options. Contributions provide Income tax savings as well.
Reliance Golden Years Plan, a flexible pension product is available for all individuals who are
between the ages of 18 and 65.
Features: -
a) Entry age minimum is 18 year and maximum 65 year
b) Minimum premium amount Rs. 10,000 and maximum is unlimited
c) Mode of premium payment is available
d) Pension plan with risk cover and without risk cover
e) Choice of investment
i. Capital secure fund – 80% in equity and 20% in government security
ii. Balanced fund – 80% in government and 20% in equity
f) No loan facility is available
g) Tax benefit is available
h) Annuity options
i. Annuity payable for life
ii. Annuity payable for 5/10/15 years certain and thereafter with life
iii. Annuity payable for life with return of capital on death of the annuitant
[41]
COMPARATIVE ANALYSIS
The study of project is all about comparative analysis of different insurance products of
different companies.
• Comparing Reliance Life Insurance, Max New York Life Insurance, MetLife Insurance
• Comparing LIC, Reliance Life Insurance, ICICI Prudential Life Insurance
• Comparing Market Share of Indian Insurance Companies
• Comparing Capital funds of Indian insurance companies
• Compare between Reliance child insurance and LIC komal jeewan policy
Why Compare Best Life Insurance Policies in India
Life insurance policy provides you assurance that your family will get financial security and
support even when you are not around. This is the best way where the insured person can
save his family from financial crisis at the time of any mishappening or after death, but prior
to this it’s necessary to compare best life insurance policies offered by different companies,
necessary compare contract terms, cost, premium quotes, limitations and benefits.
With a population of over one Billion, only 35 million people in India are covered with life
insurance. There are so many reasons behind this low penetration of life insurance.
Undoubtedly, ignorance about insurance, lack of knowledge about facilities and cost
efficiency of insurance - are some of the reasons.
Why Compare Best Life Insurance Plans in India
If you too are looking for a good life insurance policy but do not have any idea about which
insurance company to choose and what type of policy is apt for you, www.policybazaar.com
can be a great help.
At our site, we are offering details of the leading life insurance companies in India. You can
get comprehensive details of different life insurance policies offered by these companies.
You can even compare different life insurance policies to see which policy suits you the
most. You can also enrol for a policy and pay the premium for the policy. So get insured, all
it takes is a few clicks of the mouse at our website.
Not many today know that life Insurance premium over the past few years has been revised
by quite a few insurers. This has not only reflected in the amount of increased allocation per
life insurance premium but also the returns that guaranteed returns that a policyholder gets
on his life insurance premiums.
[42]
To learn more about life insurance premium for the bestselling products all a customer
today needs and get life insurance quotes from all the top rated insurers.
COMPARATIVE ANYLISIS OF TOP 10 LIFE INSURANCE COMPANIES IN INDIA
1. Life Insurance Corporation of India
LIC (Life Insurance Corporation of India) still remains the largest life insurance company
accounting for 64% market share. Its share, however, has dropped from 74% a year before,
mainly owing to entry of private players with innovative products and better sales force.
2. ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in India. It
experienced growth of 58% in new business premium, accounting for increase in market
share to8.93% in 2007-08 from 6.97% in 2006-07.
3. Bajaj Allianz Life Insurance Company Ltd.
Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its market share went
up to 6.98% in 2007-08 form 5.66% in 2006-07. The company ranked second (after LIC) in
number of policies sold in 2007-08, with total market share of 7.36%.
4. SBI Life Insurance Company Ltd
SBI Life Insurance Co Ltd in terms of new number of policies sold, the company ranked 6th
in2007-08. New premium collection for the company was Rs 4,792.66 crore in 2007-08, an
increase of 87% over last year
5. Reliance Life Insurance Company Ltd.
Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore and its market share
went up to 2.96% from 1.23% a year back. It now ranks 5th in new business premium and
4th in number of new policies sold in 2007-08.
6. HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680 crore in FY2007-
08,registering a year-on-year growth of 64%. Its market share is 2.88% and it ranks 6th
among the insurance companies and 5th amongst the private players.
7. Birla Sun Life Insurance Company Ltd.
Birla Sun Life Insurance Co Ltd market share of the company increased from 1.22% to 2.11%
in 2007-08.
8. Max New York Life Insurance Company Ltd.
[43]
Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08. Total new
business generated was Rs 641.83 crore as against Rs 387.51 crore.
9. Kotak Mahindra Old Mutual Life Insurance Ltd.
Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported
growth of 80%, moving from the 11th position to 9th. It captured a market share of 1.19%
in2007-08.
10. Aviva Life Insurance Company India Ltd.
Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9thlast
year. It has presence in more than 3,000 locations across India via 221 branches and close
to40 banc assurance partnerships. Aviva Life Insurance plans to increase its capital base by
Rs 344 crore.
Subsequent Growth rate in insurance industry
The life insurance companies have performed the best when it comes to growth with an
increase of almost 70% in new premium that has been collected in the initial 5 months of
2012.
As per IRDA data, in April-August 2010 the insurance companies earned $11.73 billion in
new premium - in the corresponding period in the previous year the amount stood at 6.9
billion dollars.
LIC, a state held insurer, had been the biggest profit maker at that time with an addition of
88% to their existing business. The privately owned insurers together had seen a leap of
34% to their policy sales.
ICICI Prudential earned 576.60 million dollars at that time. During April-August 2009 SBI Life
had earned $379.20 million in sales of new policies and that figure went up to $531.87
million in the corresponding period in 2010 making it an increase of 40%. HDFC Standard
Life also experienced a good growth of 54% in new sales.
IRDA data shows that between April and October 2010 the general insurance industry
experienced a year-on-year growth of 22.76% with regards to underwritten gross premium.
The total value of that premium was 5.29 billion dollars while the same figure stood at $4.31
billion in April-October 2009. For the public sector companies the year-on-year growth rate
was 21.09 percent between April-October 2010 and April-October 2009.
In the same period the privately held insurers saw an increase of 25.19 percent in terms of
premium collected. Among the publicly owned entities, New India Insurance was one of the
better performers with a premium income of 916.77 million dollars in April-October 2010.
[44]
At the same period in 2009 they had earned 770.25 million dollars which implies a growth
rate of 19.04%. The IRDA Summary Report of Motor Data of Public and Private Sector
Insurers 2009-10 states that in the same period almost 28.4 million policies were sold and
the aggregate worth of premium collected was $2.31 billion.
The health insurance sector, according to the RNCOS' research report named "Booming
Health Insurance in India" posted unprecedented growth rates in 2008-09 and 2009-10. The
report also estimates that between the 2009-10 and 2013-14 the sector would see a
compound annual growth rate (CAGR) of at least 25%.
Insurance industry contribution to GDP
Experts are of the opinion that around the world the insurance industry contributes around
4.5% to national GDPs. They have questioned the logicality of opinions that in India the
contribution can be higher saying that there are other important sectors like education,
defence, and health that cannot be undermined in this context.
They have ruled out possibilities that the sector can contribute 10% to India's GDP. The
Chairman of IRDA, Hari Narayan has ruled out any such possibility asking if India's GDP
growth will be that much in the next few years ahead.
The IRDA states that in India land and gold are more preferred as forms of investment.
Narayan feels that if the insurance sector is to do well in terms of contribution to GDP then
more people should be convinced about its capability to provide good ROI (return on
investment).
[45]
In terms of policies sold following are the top insurers in India:
Company Policies sold till December 2011 (approximate figure)
LIC 20404281
Future General Life 100143
ICICI Prudential 785938
Met Life 98904
Reliance Life 698109
Star Union Dai-ichi 82037
Bajaj Allianz 640483
Shriram Life 73490
Birla Sunlife 589855
Bharti AXA Life 69151
SBI Life 491927
Aegon Religare 47332
Max New York 405662
IDBI Federal 45833
HDFC Standard 397408
Canara HSBC OBC Life 44899
Tata AIG 199275
DLF Pramerica 43299
Kotak Life Insurance 199614
IndiaFirst 38498
Aviva 100216
Sahara Life 36228
Edelweiss Tokio 1968
Key findings
Following are some important findings from World Bank regarding the condition of
insurance industry in India:
Between 2005 and 2010 the yearly GDP growth was approximately 8.56%
At the same time, the ratio of gross savings to GDP was 33%
Middle class saw the quickest growth
The life expectancy rate of people went up and urban development happened at
almost 54%.
In 2010 rate of premium growth came down to 4.2% and compared to global
standards the premium share was pretty low
Major operational issues for insurers were expenditure control, claims settlement
procedures, improving investment yields, and capital requirements
In the 2010-11 fiscal the life insurance industry grew by 4.20% while the general
insurance industry increased by 8.10%.
[46]
During that time the paid-up capital (private total) for the life insurance sector was
INR 236.57 billion while the paid-up capital (industry total) was INR 236.63 billion.
In 2010-11 the paid-up capital (private total) for the general insurance sector was
INR 39.56 billion while the paid-up capital (industry total) was INR 67.06 billion.
In 2010-11 the operating costs of privately owned life insurers was INR 159.62 billion
while the total life insurance industry expense was INR 329.42 billion.
In the same time the privately owned general insurers spent INR 39.32 billion from
an industry total of INR 106.20 billion.
In 2010-11 the privately held life insurers paid benefits and claims worth INR 312.51
billion while the industry aggregate was INR 1425.24 billion.
At the same time the private general insurers paid benefits and claims worth INR
99.37 billion while the industry total was INR 295.36 billion.
[47]
Comparing Reliance Life Insurance, Max New York Life Insurance, MetLife
Insurance
Attributes
Reliance Life Insurance Max New York Life
Insurance
MetLife Insurance
Corporate
Life Insurance
Annuity Solutions,
Group Gratuity Plans,
Group Protection Plans,
Group Term Insurance
Plans
Group Gratuity Plans,
Group Term Insurance
Plans, Unit Linked Group
Superannuation Plan,
Employee Deposit
Linked
Group Gratuity Plans,
Group Scheme Plans,
Group Term Insurance
Plans
Agent No No No
Affiliation Reliance Max New York Met Life India
Insurance
Life Insurance
Corporation (LIC)
Types Life Insurance
Corporation (LIC)
Life Insurance
Corporation (LIC)
SMS Short
Code
- 54242 56161
Individual Life
Insurance
Children Plans,
Endowment Assurance
Plans, Money Back
Plans, Protection Plans,
Retirement Pension
Plans, Savings And
Investment Plans, Term
Assurance Plans, Whole
Life Plans, Health Plans
Children Plans,
Endowment Assurance
Plans, Money Back
Plans, Protection Plans,
Retirement Pension
Plans, Savings And
Investment Plans, Term
Assurance Plans, Unit
Linked Insurance Plans
(ULIPS),Whole Life
Plans, Health Plans
Children Plans,
Endowment
Assurance Plans,
Health Plans, Money
Back Plans, Protection
Plans, Retirement
Pension Plans, Savings
And Investment Plans
[48]
Comparing LIC,Reliance Life Insurance,ICICI Prudential Life
Insurance
Attributes LIC Reliance Life Insurance ICICI Prudential Life Insurance
Corporate Life Insurance
Group Critical Illness Rider, Group Gratuity Plans, Group Leave Encashment Plan, Group Mortgage Redemption Assurance, Group Scheme Plans, Group Term Insurance Plans, Social Security Plan
Annuity Solutions, Group Gratuity Plans, Group Protection Plans, Group Term Insurance Plans
Annuity Solutions, Group Gratuity Plans, Group Protection Plans, Group Scheme Plans, Group Term Insurance Plans
Agent No No No
Affiliation Life Insurance Corporation (LIC)
Reliance ICICI Bank
Types Life Insurance Corporation (LIC)
Life Insurance Corporation (LIC)
Life Insurance Corporation (LIC)
SMS Short Code - - 56767
Individual Life Insurance
Children Plans, Endowment Assurance Plans, Joint Life Plans, Money Back Plans, Plans For Handicapped Dependents, Plans For High Worth Individuals, Protection Plans, Retirement Pension Plans, Special Plans For Women, Term Assurance Plans, Unit Linked Insurance Plans (ULIPS),Whole Life Plans
Children Plans, Endowment Assurance Plans, Health Plans, Money Back Plans, Protection Plans, Retirement Pension Plans, Savings And Investment Plans, Term Assurance Plans, Whole Life Plans
Children Plans, Endowment Assurance Plans, Health Insurance, Money Back Plans, Protection Plans, Retirement Pension Plans, Savings And Investment Plans, Term Assurance Plans
[49]
RESEARCH OBJECTIVES:
The main purpose of the project is to know about the company, about its products and
types of plan. And also know about which insurance has maximum market share and capital
fund in India and comparison with its competitors.
1. Competitors analysis – Comparison of children’s plan (Reliance child Plans) based on the
nearest Competitor plans (LIC komal jeevan policy). On the basis of following features:
• Plan type
• Min/Max Term Child
• Min/Max Age of Child
• Payment Mode
• Life assured
• Beneficiary
• Benefit Structure
• Death Benefit
• Bonus and Additions
• Riders Available
2. To know the different promotion strategy used by companies to aware their customers.
3. To develop and standardize a measure to evaluate investment pattern in life insurance
services.
4. To analyse the market share of competitors towards the company.
RESEARCH METHODOLOGY
Research Strategy
For my research study first of all this is very important that I have to know what is child
Insurance policy and how it works. I’ll visit Reliance Life Insurance Company in Ranchi to
know more about child Insurance policy.
[50]
Data Collection
There are two sources of study:-
1. Primary data
2. Secondary data
1. Primary Data:
•Fixing appointments with their agents.
I contact the Agent of Reliance Life Insurance Company Ltd. to obtain some of the
information about market share.
2. Secondary Data:
Secondary data is one which already exists and is collected from the published sources. The
sources from which secondary data was collected are:
• Newspapers and Magazines like Economic Times, Insurance Times, and Insurance Post.
• Internet
Secondary data would give me real figures as to the current position and trends of the
company. It would help me to come to a better conclusion for my research objective and
understand the performance of different companies in the market.
RESEARCH DESIGN:-
Research design is the arrangement of condition for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with the economy in
procedure. It is the blueprints for collection, measurement and analysis of data.
Type of Research: Analytical Research
Under the analytical research, the researcher has to use facts or information already
available and analyze the facts and information to make a critical evaluation of the material.
During this research descriptive and exploratory approach is taken into consideration
because of the availability of relevant information to describe the relationships between the
marketing problem and the available information.
[51]
Research Constraints
Due to busy academic schedule, class activities and transportation problems, the data for
the research is basically compiled from secondary sources.
There are some limitations of this project but Researcher will try to overcome as far as
possible.
Benefits of this Project
1. Get to know about the products and features Reliance Life Insurance.
2. How the whole insurance industry work, we get the knowledge.
3. After comparative analysis, we got to know about the positions of various companies.
4. After the whole study, we even understand the similar various insurance company capital
funds and market share in this project.
5. Even got the critical know how of working of any insurance.
6. The research would also help in identifying the needs of the people and the present day
wants.
7. The project would also help me to understand the Insurance sector, the nature of work
performed and operations.
8. After the data is collected and analysed, researcher will be able to present it
systematically. This project will help in making the data more understandable and simpler.
9. This project report will indicate the current market trends.
10. This project will be beneficial in comparing Reliance life insurance performance with the
average performance of the insurance industry.
[52]
Compare between Reliance Child Plan and LIC Komal Jeevan Policy
SR
NO.
Reliance Child Plan LIC Komal Jeevan Policy
1. Reliance Child Plan:-
Reliance Child Plan is a Traditional
Money Back Child Plan where 25%
of the Sum Assured is returned every
year in the last 4 years. In this plan,
the life of the parent is insured for
the benefit of the child. The premium
needs to be paid for the entire tenure
and 25% of the Sum Assured is paid
in the last 4 years of the policy along
with Bonus on maturity. However, if
the parent dies or becomes totally
and permanently disabled within the
policy tenure, the entire Sum
Assured is paid as immediate benefit.
The future premiums in this child
plan are waived to ensure that the
Maturity Benefit is paid either ways.
LIC Komal Jeevan Policy:-
LIC’s Komal Jeevan Plan is a children’s
money back policy in which the premium is
returned on the policy anniversary after the
child attains 18 years, 20 years, 22 years and 24
years. If the child dies within the policy tenure
after risk commencement, then the Sum
Assured along with Guaranteed Additions are
paid and the policy is terminated.
2. Key Features of Reliance Child
Plan:-
This is a Traditional Money
Back Plan where 25% of the
Sum Assured is paid every
year in the last 4 years.
Maturity Benefit is paid
under all circumstances, even
in case of unfortunate loss of
parent.
This policy provides high sum
assured rebate
Accumulated Bonus is
payable on maturity
There are 3 riders available
in this plan- Critical Illness
Rider, Accidental Death &
Total & Permanent
Disablement Rider and
Key Features of LIC Komal Jeevan Plan:-
This plan can be taken by the child’s
parents or grandparents for a child
between 0 to 10 years.
Premium needs to be paid till the child
is 17 years old.
Risk starts to commence after 2 policy
years or the child is at least 7 years old,
whichever is later.
No medical examination is required
under this plan.
Loyalty or Terminal Bonus is payable
on death or maturity.
An Additional Premium Waiver Benefit
rider can be taken along with this plan.
There is a Guaranteed Addition of Rs.
75 per thousand Sum Assured for each
[53]
Family Income Benefit Rider completed year.
3. Benefits you get from Reliance Child
Plan:-
Death Benefit – In case of
death of the Life Insured, i.e.
the parent, the entire Sum
Assured is paid for immediate
expenses; the future
premiums are waived and
paid by the insurer such that
the Survival Benefits are
either ways paid.
Survival Benefit – Is provided
as below:
When child is 3 years of age
before maturity -25% of Sum
Assured
When child is2 years of age
before maturity-25% of Sum
Assured
Maturity Benefit – On
maturity the remaining 25%
of Sum Assured + Bonus
Income Tax Benefit - Life
Insurance premiums paid up
to Rs. 1,00,000 are allowed as
a deduction from the taxable
income each year under
section 80C
Benefits you get from LIC Komal Jeevan
Plan:-
Death Benefit – Sum Assured + Bonuses
after commencement of risk. Otherwise,
the sum of basic premiums are paid
back
Maturity Benefit – Guaranteed
Additions along with Loyalty additions
is payable in a lumpsum.
Survival Benefit –
When child is 18 years of age - 20% of
the Sum Assured
When child is 20 years of age - 20% of
the Sum Assured
When child is 22 years of age - 30% of
the Sum Assured
When child is 24 years of age - 30% of
the Sum Assured
Income Tax Benefit – Premiums paid
under life insurance policy are
exempted from tax under Section 80 C
and maturity proceeds are exempted
from tax under Section 10 (10D)
4.
Eligibility conditions and other
restrictions in Reliance Child Plan:-
Sum Assured (in Rs.)- 25,000
to no limit
Policy Term (in years)- 5 to 20
Premium Payment Term (in
years)- equal to PT
Entry Age of Policyholder (in
years)-20 to 60
Age at Maturity (in years)-25
to70
Payment modes-Yearly, Half-
yearly, Quarterly and
Eligibility in LIC Komal Jeevan Plan:-
Sum Assured (in Rs.)- 1,00,000 to
25,00,000
Policy Term (in years)- 18 years –
Child’s Age at Entry
Premium Payment Term (in years)- 8 to
18
Entry Age of Policyholder (in years)-0
to 10
Age at Maturity (in years)- 26
Payment modes-Single, Yearly, Half-
yearly, Quarterly, Monthly or SSS
[54]
Monthly
5 Sample illustration of premium of
Reliance Child Plan:-
Age of Policyholder = 30, 35
and 40 years
Policy Tenure = 18 years
Sum Assured= Rs.5,00,000
Guaranteed Benefits:
3 years before maturity =
25% of Sum Assured is paid =
Rs 1,25,000
2 years before maturity =
25% of Sum Assured is paid =
Rs 1,25,000
1 year before maturity = 25%
of Sum Assured is paid = Rs
1,25,000
On Maturity = 25% of Sum
Assured is paid = Rs 1,25,000
+ Bonus
Sample illustration of premium amount in
LIC’s Komal Jeevan Plan:-
The illustration is for a healthy child
opting for a Sum Assured = Rs. 1,00,000
Policy Term= 18 years – Age at entry of
the child.
6. Additional Features and Benefits of
Reliance Child Plan:-
There are 3 additional riders
available in this policy
a. Critical Illness Rider
b. Accidental Death & Total &
Permanent Disablement Rider and
c. Family Income Benefit Rider
Additional Features and Benefits of LIC’s
Komal Jeevan Plan:-
There are riders available with this plan
a. Premium Waiver Benefit
b. RiderTerm Rider
7. What happens if?
You stop paying the premium
within the first 3 years– The
policy will lapse if the
premium has not been paid
within the grace period and
the policy benefits stop.
You stop paying the premium
after the first 3 years– If the
premium has not been paid
within the grace period, the
policy will made 'Paid up' and
the Sum Assured will be
What happens if?
You want to surrender the policy –
Surrender of policy is allowed only after
completion of 3 years or more. The
Guaranteed Surrender Value before the
date of commencement of risk is 90% of
the premiums paid excluding the
premiums paid during the first year
and any extra premium paid.
After the date of commencement of risk,
the Guaranteed Surrender Value is
90% of the premiums paid before the
date of commencement of risk excluding
[55]
reduced proportionately.
You want to surrender the
policy – If premiums for 3
years have been paid up, then
surrender of policy is allowed.
Guaranteed Surrender Value
= 30% of basic premiums
paid – 1st year’s premium
and additional premium paid
(if any).
You want a loan against your
policy - There is loan
available under this plan but
only after 3 policy years and
upto a maximum of 90% of
the Surrender Value of the
policy at the time of availing
the loan.
the premiums paid during the first year
and any extra premium paid plus 30%
of the premiums paid after the date of
commencement of risk.
You want a loan against your policy –
Policy Loan is not available in this plan.
8. Other child insurance plans from
Reliance Life Insurance :-
No more
Other child insurance plans from Life
Insurance Corporation of India:-
LIC Jeevan Anurag
LIC CDA Endowment Vesting At 2
LIC CDA Endowment Vesting At 18
LIC Jeevan Kishore
LIC Child Career Plan
LIC Child Future Plan
LIC Jeevan Chhaya
LIC Marriage Endowment Or
Educational Annuity Plan
[56]
India insurance industry - market share of leading companies
The following table shows the market share of top insurers in India in the period till April
2011:
Company Approximate market share
LIC 50%
ICICI 10%
SBI 5%
Bajaj 4%
Reliance 5%
HDFC 6%
Birla 4%
Max New York 3%
Tata 2%
Met Life 1%
Kotak 2%
Others 8%
In line with expectations, life insurance industry’s new business volumes in the individual
new business segment remained strong, growing 36% Y-o-Y and 23% M-o-M, in August
2010.
In the individual new business segment, while LIC, ICICI, and HDFC improved WNRP industry
market share (YTD) by 3.8 percentage points, 1.5 percentage points, and 0.7 percentage
points, respectively, Bajaj Allianz (1.8 percentage points), Birla (1.25 percentage points), SBI
(1.26 percentage points) and Reliance (0.31 percentage points) lost significantly. At 5mFY11
end, private insurers’ market share stood at ~50%.
Here is how Various Life Insurers stack up against each in the Industry as a whole. The
following Data suggests that LIC of India is still the market leader followed by ICICI
Prudential, HDFC Standard Life, SBI, Reliance, Bajaj, Birla Sun Life, Max New York etc.
[57]
Market share in 2010.
Market share in FY 2012.
Source: www.freepress.in
Key Trends of 2012 –
(1) Private bank led insurers have fared much better than insurers dependent on agency
distribution in volumes
(2) Share of single premium policies, which had inched up after the new ULIP guidelines, has
reversed now as new ULIP schemes have stabilized.
(3) Overall ticket sizes have remained flat for private insurers in FY12 but bank led insurers
have done better with growth in average ticket sizes aiding overall volumes.
[58]
Capital Fund: -
Capital funds of private companies (Rs in Crore)
ICICI Prudential 375
Max New York 250
HDFC Standard 218
Bajaj Allianz 200
Tata AIG 183
Birla Sun Life 180
AVIVA 155
OM Kotak 153
Reliance Life 126
SBI Life 125
Met Life 110
ING Vysya 110
[59]
DISTRIBUTION CHANNEL
Reliance Life Insurance Company Limited is using five types of distribution channel, which
are as follows:
1) Agency: -
Independent insurance agents represent a number of companies and can research these
companies’ products to find the right combination for their clients. Independent agents &
insurance producer groups are growing in prevalence. Although producer groups are in their
infancy, their emergence may potentially be realignment in the distribution of financial
services. Independent shops realized that by pooling production and funding a central
support office, they had increased buying power.
The one type of distribution channel, which Reliance Life Insurance Co. Ltd is using, is an
agency. This channel works as follows:
Branch
Managers
Advisors
Customers
2) Bank Assurance: -
While a lot of bank relationships with insurance companies have been established, life
insurance sales have been slower than one would expect he primary bank insurance
activities have been the distribution of annuities, credit life, and direct marketing insurance.
Banks are failing to incorporate successful sales tactics used to sell other financial services
like investments.
Another type of distribution channel is bank assurance. This channel is tie up with banks. In
this channel the advisors using or targeting the bank customers to make a business with
them i.e., to sell the policy of the company.
3) Corporate:-
To gain a better understanding of the demand amongst independent advisors for trust
services and to gain a better feel for how independent advisors handle trust services, a
research was performed with independent advisors across several broker/dealers and
custodians.
The interviews revealed that demand is greatest for living trusts among independent
advisors, followed by demand for corporate trustee services.
[60]
Another type of distribution channel is corporate, which are for employee benefits. This
channel is tie up with corporate or small enterprises. Through these small enterprises, the
advisors will sell the products/policy to customers of the small enterprises.
4) Rural Benefits:-
Brokerage firms have gained much of the institutional and personal trust business lost by
the banks. These firms have steadily captured assets, primarily at the expense of the banks.
The number of non-bank trust companies has increased in recent years as independent trust
companies have emerged and more broker/dealers are integrated services. Insurance
companies view full-service brokers as a potentially new distribution channel as well.
Another type of distribution channel is rural benefits. This channel works as a dealership. In
this channel, the dealers will sell the policy to the target customers.
5) Web World:-
Direct sales of life insurance are growing rapidly, but many of the traditional full-serve
players seem to be letting it go. Across all financial services, consumers are expressing a
willingness to deal with a variety of providers on the web. Web sites are starting to pop up
offering consumer insurance products especially designed for distribution over theweb.
Another type of distribution channel is web world. This channel is tie up with customer
database. In this channel, the advisors will sell the policy to the target customers, which are
taken from the customer database, are listed in the website.
PROMOTIONAL PROGRAMMES & TARGET SEGMENT
Promotional programmes and target segment are related to each other. The promotional
programmes are made to motivate the advisors/agents and sales managers to do more
business i.e., to sell the more policies. The Reliance Life Insurance Co. Ltd has made three
promotional schemes, which are as follows:
1) Shubh – Arambh
2) Reliance Advisor’s Reward Experience: This programs consists of
New Advisor Incentive Program
Board of Advisors -
Annual Discovery Series
Advisor Career Progression
RARE Club – Loyalty Program
[61]
CONCLUSION
Reliance Life Insurance has always been an innovator in the field of Insurance. The company
has a keen interest in the development and enhancement of its products in India. The
company focuses in providing quality products to all the areas of our country.
After the deep study of insurance sector of India, I can tell that this is the sector, which has
most business opportunities perhaps in India Insurance industry is one of the fastest sectors
in India.
Insurance sector has been growing by 25% to 30% and it is expected to increase by 50% in
coming 5 years. After the opening up of the insurance sector, it has become much
competitive and insurance awareness among people has increased.
As far as the comparison of Reliance Life Insurance and other players is concerned, there are
both positive as well as negative impacts on both the sides.
For Reliance Life Insurance, the negative aspect is that its market share is low.
For private players the negative aspect is that they have to fight with the public sector giant
which is established player with a high brand value.
But the positive impact is that the life insurance awareness has increased and the business
of Reliance Life Insurance has increased.
Reliance Life Insurance products have tremendous amount of potential and demand in the
market. The name speaks for it and the customer associate themselves with the brand
name. Reliance Life Insurance has tight competition with ICICI Prudential.
Reliance Life Insurance product quality is good but the technical aspects of its functioning is
average. Advertisement of its products is the main area of improvement, which is deviating
from the desired level. The various promotional activities been conducted by Reliance Life
Insurance in regional languages is an effective tool. The growing demand in the market for
Reliance Life Insurance products indicates the prospect of new customers for the company.
Finally I conclude that Reliance Life Insurance has built up a brand name, which needs to be
maintained through continuous feedback, improvement and proactive actions. The
company has already sensed the market potential and now it should focus on coming with
schemes and products plans to give the market what they want from Reliance Life
Insurance.
[62]
SWOT ANALYSIS
STRENGTH
1) A strong brand name with a high degree of financial support which is the back bone of
the company.
2) Brand leaders in bringing latest financial services for the common man.
3) An innovator, pre problem seeker and risk taking capabilities.
4) Systematic, planned and quick actions taken up lead to quick reactions by the company
ultimately providing a competitive edge to Reliance Life Insurance.
WEAKNESS
1) The data collected cannot be considered as 100% accurate but it is only an estimated
figures gathered by the survey.
2) The analysis so done cannot be regarded as the final as change is the only constant thing
which happens.
OPPORTUNITIES
1) A huge untapped market.
2) Emerging middle class, a good potential market.
3) Increasing employment rate and income.
4) Increasing financial investments in market.
THREATS
1) Neck to Neck competition with ICICI and HDFC with respect to services and policies.
2) Threats from growing competitors like Bajaj Allianz and Aviva in Insurance sector.
3) New entrant in the market, Sahara India Life, Om KOTHAK MAHINDRA etc, is an area of
concern.
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Suggestions and recommendation
Followings are the recommendations and the suggestions not only for the Reliance life
insurance company but also for other private life insurance companies if they want to
complete with public/government life insurance companies.
1. Creating positive image: Private companies should try their level best to create positive
and favourable image in the minds of people i.e. in the minds of their target customers.
2. Training and development to agents: Company must provide training to their agents and
financial so that they can satisfy customer and doubts effectively.
3. Concern towards customers: Serious concern must be given to the customers as in
today’s scenario it regarded as “Customer is a king”. In formal words we can say that if can
customers more loyal towards the company.
4. Co-operation with agents and branch managers: The Company must full co-operate with
branch managers and agents.
5. Availability of branch offices: There must be the branch offices in each 20-30 Km.
diameter.
6. Efficient management: The management appointed must be that much capable that it
can control the whole team and improve the goodwill and image of the company.
7. Sales promotion and marketing: The marketing department must be so aggressive that it
can have a close watch on the competitors‟ activities. Not only this but also it must take
care of the need and wants of the customers also.
8. Incentive schemes and permanency in job: There must be good incentive schemes to be
designed as these can acts as good motivators for the agents. The scheme of permanent job
placement must be introduce for those agents who have shown extra ordinary
performance.
9. Solution of Grievances: There must regular meetings with the financial consultants and
agents to motivate them and to solve grievances if there are any.
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Limitations
Although every effort has been in to collect the relevant information through the sources
available, still some relevant information could not be gathered.
Busy Schedule of Concerned Executives:
The concerned executives were having very busy schedule because of which they were
reluctant to give appointment.
Time:
The time duration could not provide ample opportunity to study every detail of the
company.
Unawareness:
Customers were unaware of many terms related to same while asking to them.
Confidential Information:
As the company on account of confidential report has not disclosed some figures. Moreover,
in some cases separate accounts of division are not separately maintained thereby, leading
to restrictions in study.
Area:
Area of study chosen was not large.
[65]
BIBLIOGRAPHY AND REFERENCES
www.reliancelife.com
www.indiainfoline.com
www.bimaonline.com
www.google.com
www.yahoo.com
www.wikipedia.com
www.moneycontrol.com
Marketing Management by Philip Kotler
Business Research by N.K. Malhotra