tata aig life insurance

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Introduction To CompanyIntroduction To Company

TATA AIG LIFE INSURANCE CO.TATA AIG LIFE INSURANCE CO.

(TATA) (AIG)



Tata AIG Life Insurance Company LimitedTata AIG Life Insurance Company Limited (Tata(Tata AIG life) is a joint venture company, formed by the Tata AIG life) is a joint venture company, formed by the Tata

Group and American International Group, Inc. (AIG).Group and American International Group, Inc. (AIG).Tata AIG Life combines the Tata Groups preTata AIG Life combines the Tata Groups pre--eminent eminent leadership position in India and AIGs global presence asleadership position in India and AIGs global presence asthe worlds leading international insurance and financialthe worlds leading international insurance and financialservices organization. The Tata Group holds 74 per cent services organization. The Tata Group holds 74 per cent

stake in the insurance venture with AIG holding thestake in the insurance venture with AIG holding thebalance 26 percent. Tata AIG Life provides insurancebalance 26 percent. Tata AIG Life provides insurancesolutions to individuals and corporate. Tata AIG Lifesolutions to individuals and corporate. Tata AIG LifeInsurance Company was licensed to operate in India onInsurance Company was licensed to operate in India onFebruary 12, 2001 and started operations on April 1,February 12, 2001 and started operations on April 1,

2001.2001.



Vision VisionTo be the leading provider of wealth management,protection andTo be the leading provider of wealth management,protection andretirement solutions that meets the needs of our customers andretirement solutions that meets the needs of our customers andadds value to their lives. adds value to their lives.

MissionMissionTo be transparent in the way Co. deal with customers and to act To be transparent in the way Co. deal with customers and to act with integrity.with integrity.

To invest in and build quality human capital in order to achieveTo invest in and build quality human capital in order to achievemission.mission.



About Unit Link Insurance Plan About Unit Link Insurance Plan

Unit link insurance Pan (ULIP) is a policy in which premiumUnit link insurance Pan (ULIP) is a policy in which premium paid are invested as per the choice of policy holder either in paid are invested as per the choice of policy holder either indebt or equity product or in combination of both. Unit link debt or equity product or in combination of both. Unit link insurance plan has both the benefit of insurance as well asinsurance plan has both the benefit of insurance as well aschoice to choose the return on investment. ULIP's have thechoice to choose the return on investment. ULIP's have theflexibility of choosing premium amount and the choice of flexibility of choosing premium amount and the choice of funds in which money to be invested. At present allfunds in which money to be invested. At present allInsurance companies have 4Insurance companies have 4--5 Unit link insurance plan.5 Unit link insurance plan.In case of untimely death of the policy holder his nomineeIn case of untimely death of the policy holder his nominee

would get either the sum assured or the value of unitswould get either the sum assured or the value of unitswhichever is higher.whichever is higher.Unit link insurance policy which is also known as "ULIP" isUnit link insurance policy which is also known as "ULIP" isone of the most popular insurance plan today because of one of the most popular insurance plan today because of following benefits:following benefits:



Feature of ULIPFeature of ULIP FlexibilityFlexibility to choose premium amount. It can be single, regular or variable.to choose premium amount. It can be single, regular or variable.

Various choices of funds in which in which money to be invested.Various choices of funds in which in which money to be invested.

It has liquidityIt has liquidity. As per the terms of policy, money invested in ULIP's can. As per the terms of policy, money invested in ULIP's can be withdrawn in case of need and urgency of funds. Normally ULIP's has 3 be withdrawn in case of need and urgency of funds. Normally ULIP's has 3years lock years lock--in period. The amount can be withdrawn in unitsin period. The amount can be withdrawn in units

Choice of returnsChoice of returns. Since premiums are invested in equity related market or . Since premiums are invested in equity related market or debt market. So a policy holder who want high returns can opt investmentdebt market. So a policy holder who want high returns can opt investmentin equity and the person who don't like risks of equity market can opt for in equity and the person who don't like risks of equity market can opt for debt funds.debt funds.

Tax benefitTax benefit. Proceeds from investment in ULIP get tax rebate under . Proceeds from investment in ULIP get tax rebate under section 88 (in India) whereas proceeds from investmentsection 88 (in India) whereas proceeds from investment



Research methodologyResearch methodology

RESEARCH OBJECTIVESRESEARCH OBJECTIVES

Main objectiveMain objective: To find out the preference of people towards ULIP or: To find out the preference of people towards ULIP or

Mutual fund.Mutual fund.

SubSub--objectiveobjective

To compare the perception of the people about ULIP of differentTo compare the perception of the people about ULIP of differentinsurance companies.insurance companies.

To know about the customer awareness about of TATA AIG LIFETo know about the customer awareness about of TATA AIG LIFEINSURANCE CO. LTD.INSURANCE CO. LTD.



Data collectionData collection

QUESTIONNAIRE METHOD:QUESTIONNAIRE METHOD:In this study questionnaire was sent to the persons concernedIn this study questionnaire was sent to the persons concerned

with a request to answer the questions and return thewith a request to answer the questions and return the

questionnaire. A questionnaire consisted of a number of questionsquestionnaire. A questionnaire consisted of a number of questionstyped in a definite order on a set of forms. The respondents had totyped in a definite order on a set of forms. The respondents had toanswer the question on their own.answer the question on their own.

PRIMARY DATA:PRIMARY DATA:The primary data are those which are collected afresh and for theThe primary data are those which are collected afresh and for the

first time; and thus happen to be original in character. In this studyfirst time; and thus happen to be original in character. In this study

data is collected through observation, guidance of the supervisor &data is collected through observation, guidance of the supervisor &data is collected through questionnaire.data is collected through questionnaire.SECONDARY DATA:SECONDARY DATA:

In this study secondary sources of data were the various websitesIn this study secondary sources of data were the various websitesand insurance manuals. This mainly provided information about theand insurance manuals. This mainly provided information about theinsurance sector and the companys profile. These helped ininsurance sector and the companys profile. These helped ingaining knowledge about the industry.gaining knowledge about the industry.



SAMPLING:SAMPLING:

It is the process of obtaining information about anIt is the process of obtaining information about anentire population by examining only a part of it.entire population by examining only a part of it.

SAMPLING UNITSAMPLING UNIT INDIVIDUALSINDIVIDUALSSAMPLE SIZESAMPLE SIZE 150 UNITS150 UNITS

SAMPLING TECHNIQUESAMPLING TECHNIQUE RANDOM CONVENIENCERANDOM CONVENIENCE

Survey period was six weeks.Survey period was six weeks. (15 JUNE to 27 JULY (15 JUNE to 27 JULY 2009)2009)



SCOPE OF THE STUDYSCOPE OF THE STUDY

This project includes following areas:This project includes following areas:

In this project, the study related to theIn this project, the study related to thecomparative analysis of ULIP with mutualcomparative analysis of ULIP with mutualfund.fund.

Survey of Survey of PANIPATPANIPAT is included.is included.

Survey of 150 individuals is also includedSurvey of 150 individuals is also included



RESEARCH DESIGN USED IN STUDYRESEARCH DESIGN USED IN STUDY

DESCRIPTIVE RESEARCH DESIGNDESCRIPTIVE RESEARCH DESIGN::Descriptive research studies are those studiesDescriptive research studies are those studieswhich are concerned with describing thewhich are concerned with describing thecharacteristics of a particular individual, or of characteristics of a particular individual, or of a group. In this study like, observation,a group. In this study like, observation,questionnaires, examination of records, etcquestionnaires, examination of records, etcare used for such studies.are used for such studies.



ULIP vs Mutual FundULIP vs Mutual Fund

Unit Links Insurance Plan (ULIP) andUnit Links Insurance Plan (ULIP) and Mutual FundMutual Fund (MF) are the two(MF) are the twomost preferred options for a part time investor to invest into equity.most preferred options for a part time investor to invest into equity.But how do we decide which one should we go for. Though it isBut how do we decide which one should we go for. Though it isvery easy to decide, people tend to confuse themselves most of thevery easy to decide, people tend to confuse themselves most of thetime. Need to consider while deciding which option we want to take.time. Need to consider while deciding which option we want to take.Mutual Fund are pure investments. ULIP are combination of Mutual Fund are pure investments. ULIP are combination of Insurance and Investment.Insurance and Investment.Now let us compare ULIP and MF based on certain well knownNow let us compare ULIP and MF based on certain well knownfacts:facts:

1) 1) InsuranceInsurance ULIPsULIPs provide you with insurance cover. MFs don't provide you withprovide you with insurance cover. MFs don't provide you with

insurance cover.insurance cover.



2) 2) Entry LoadEntry Load ULIPs generally come with a huge entry load. For different schemes,ULIPs generally come with a huge entry load. For different schemes,

this can vary between 1.5% to 40% of the first years premium. MFsthis can vary between 1.5% to 40% of the first years premium. MFshave a small entry load of a maximum of 2.5% which can also behave a small entry load of a maximum of 2.5% which can also bewaved off if you apply directly (i.e. not through a agent).Here MFswaved off if you apply directly (i.e. not through a agent).Here MFshave a huge advantage. If we consider a conservative market returnhave a huge advantage. If we consider a conservative market returnof about 10of about 10--15% you may get a zero percent return in the first 15% you may get a zero percent return in the first

year.year.

3) 3) MaturityMaturity ULIPs generally come with a maturity of 5 to 20 years. That what ULIPs generally come with a maturity of 5 to 20 years. That what

ever money you put in, most of it will be lockedever money you put in, most of it will be locked--in till the maturity.in till the maturity.Tax saving MF ( Popularly called as Equity Linked Saving Scheme orTax saving MF ( Popularly called as Equity Linked Saving Scheme orELSS) come with a lockELSS) come with a lock--in period of 3 years. Other MFs don't have ain period of 3 years. Other MFs don't have alocklock--in period. Again MFs have advantage over ULIPs. ULIPs doin period. Again MFs have advantage over ULIPs. ULIPs doallow you to take money out prematurely but they also put penaltiesallow you to take money out prematurely but they also put penaltieson you for doing that.on you for doing that.



4) 4) Compulsion of InvestingCompulsion of Investing

ULIPs would generally make you pay at ULIPs would generally make you pay at least first three premiums. MFs don't haveleast first three premiums. MFs don't haveany compulsion on future investments.any compulsion on future investments.

5) 5) Tax SavingTax Saving

Both the MF and ULIP come under 80CBoth the MF and ULIP come under 80Cand can save you tax. Returns in the bothand can save you tax. Returns in the both

form of investments are tax free.form of investments are tax free.



CONCLUSIONCONCLUSION

TATA AIGTATA AIG is one of the worlds largest life insurance companies. It is one of the worlds largest life insurance companies. It has businesses spread out across the globe. It came to India in thehas businesses spread out across the globe. It came to India in theyear 2001. It currently ranks Top amongst the insurers in Indiayear 2001. It currently ranks Top amongst the insurers in India(Source: annual premium provided by the company)(Source: annual premium provided by the company)

The company faces a large amount of competition. To sustain itself The company faces a large amount of competition. To sustain itself it must promote its products through advertising and improve itsit must promote its products through advertising and improve itsselling techniques. Consumers must be aware of the new plansselling techniques. Consumers must be aware of the new plansavailable at available at TATA AIGTATA AIG..

The medium of advertising used could be internet since most of itsThe medium of advertising used could be internet since most of itscompetitors use this tool to promote their products. The companycompetitors use this tool to promote their products. The company

must be promoted as an Indian company since consumers seem tomust be promoted as an Indian company since consumers seem tohave more trust in investing in Indian firms.have more trust in investing in Indian firms.



The unit linked concept must be specifically promoted.The unit linked concept must be specifically promoted.

The general perception of life insurance has to change inThe general perception of life insurance has to change inIndia before progress is made in this field. People shouldIndia before progress is made in this field. People shouldnot be afraid to invest money in insurance and must usenot be afraid to invest money in insurance and must useit as an effective tool for tax planning and long termit as an effective tool for tax planning and long termsavings.savings.

TATA AIG could tap the rural markets with cheaperTATA AIG could tap the rural markets with cheaperproducts and smaller policy terms. There are individualsproducts and smaller policy terms. There are individualswho are willing to pay small amounts as premium but who are willing to pay small amounts as premium but the plans do not accept premiums below a certainthe plans do not accept premiums below a certainamount. It was usually found that a large number of amount. It was usually found that a large number of

males were insured compared to females. Individualsmales were insured compared to females. Individualsbelow the age of 30 (mostly male) were interested inbelow the age of 30 (mostly male) were interested ininvestment plans. This was a general conclusion drawninvestment plans. This was a general conclusion drawnduring prospecting clients.during prospecting clients.



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tata aig life insurance

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