INSURANCE IN INDIA

The insurance sector in India has come a full circle from being an open competitive
market to nationalisation and back to a liberalised market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries. The business of life insurance in India in its existing form
started in India in the year 1818 with the establishment of the Oriental Life Insurance
Company in Calcutta. In 1993, Malhotra Committee, headed by former Finance Secretary
and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry
and recommend its future direction. The Malhotra committee was set up with the
objective of complementing the reforms initiated in the financial sector. The reforms
were aimed at “creating a more efficient and competitive financial system suitable for the
requirements of the economy keeping in mind the structural changes currently underway
and recognising that insurance is an important part of the overall financial system where
it was necessary to address the need for similar reforms…”

The Insurance Regulatory and Development Authority

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering
the private sector insurance companies.The other decisions taken simultaneously to
provide the supporting systems to the insurance sector and in particular the life insurance
companies was the launch of the IRDA’s online service for issue and renewal of licenses
to agents.

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 HISTORY OF ICICI

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated
at the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited.ICICI emerges as the major
source of foreign currency loans to Indian industry. Besides funding from the World
Bank and other multi-lateral agencies, ICICI also among the first Indian companies to
raise funds from International markets.

ICICI Bank

ICICI Bank (NYSE:IBN) is India’s second largest bank with an asset base of Rs. 106812
crore. ICICI Bank provides a broad spectrum of financial services to individuals and
companies. This includes mortgages, car and personal loans, credit and debit cards,
corporate and agricultural finance. The Bank services a growing customer base of more
than 7 million customer accounts and 5 million bondholders accounts through a multi-
channel access network. This includes about 450 branches and extension counters, 1675
ATMs, call centres and Internet banking.ICICI Bank posted a net profit of Rs.1,206 crore
for the year ended March 31, 2003. ICICI Bank is the only Indian company to be rated
above the country rating by the international rating agency Monody’s and the only Indian
company to be awarded an investment grade international credit rating. The Bank enjoys
the highest AAA (or equivalent) rating from all leading Indian rating agencies.

2
 ICICI Prudential Life Insurance Company
Limited
leading private life insurance company of India

HISTORY

ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management
Company, which has today emerged as one of the leading mutual funds in India. The two
companies bring together two of the strongest financial service brands in Asia, known for
their professionalism, excellent quality of service and long term commitment to YOU.
Riding on the success of this relationship, the two companies joined hands once more in
2000, to form ICICI Prudential Life Insurance, with a commitment to provide leading-
edge life insurance solutions.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Bank has 74% stake in
the company, and Prudential plc has 26%. ICICI Prudential was amongst the first
private sector insurance companies to begin operations in December 2000 after receiving
approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 6.75 billion with ICICI Bank and Prudential
plc holding 74% and 26% stake respectively. In the year ended March 31, 2004, the
company had issued over 430,000 policies, for a total sum assured of over Rs.8,000 crore
and premium income in excess of Rs. 980 crore. The company has a network of about
30,000 advisors, as well as 12 bancassurance tie-ups. Today the company is the #1
private life insurer in the country.

3
VISION OF THE COMPANY

TO BE THE
DOMINENT LIFE AND PENSION
PLAYER BUILT ON TRUST BY
WORLD CLASS PEOPLE AND
SERVICE

INTEGRITY

4
 OUR VISION

SCALE

ROLE
PENSION!!!
MODEL
BIGGEST

GROWTH

DOMINENT
OPPORTUNITY
TO BE THE

LIFE AND PENSION PLAYERS

CRITICAL
TO
LONG
TERM
BUILT ON TRUST LEADER-
SHIP

PEOPL
BY WORLD CLASS E

SERVIC
AND E

5
INTEGRITY:-

 Walk the talk – live the values.

 Stand up honestly & fearlessely for what I truly care about.
 Always act in a consistent & equitable manner.
 Don’t compromise the future to pay for the present.

CUSTOMER FIRST:-

 Own the customer-Deliver the promise.

 Listen actively,stretch continuously to add value to customers & channel
partners.
 RICE-Respect Internal Customer Expectations.
 Seek & empower decision making for superior service delivery.
 Live quality

BOUNDARYLESS:-

 Never say its not my job-go beyond the call duty.

 Experiment-believe anything is possible.
 Seek new ideas regardless of source.
 Share ideas & thought freely across levels & functions.

OWNERSHIP:-
 If it is to be,it is up to me.
 Bias for actions.
 Own mistakes-learn from failures.
 Confront hard facts,pursue goals relentlessely.
 Accountable for team performance.

PASSION:-

 Winning Instinct-Transmit boundless energy.

 Stand up & make difference-challenge status quo & drive change.
 Demonstrate speed for competitive advantage.
 Passionately nurture & reward excellence.

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 ORGANIZATION STRUCTURE

ICICI
PRUDENTIAL
LIFE INSURANCE

HIMALAYAN LIFE INSURANCE PENINSULAR

REGION REGION

ZONES

NORTH & EAST SOUTH & WEST

1 1
DELHI
U.P. KARNATAKA
HARYAN GOA
A KERELA
PUNJAB

2
2
A.PRADESH
W. BENGAL T.NADU
ORISSA
JHARKHAND
ASSAM
3

MAHARASHTRA
3 (MUMBAI –
HEADQUATERS)

GUJRAT
RAJASTHAN
M.PRADESH SALES AND DISTRIBUTION
DEPARTMENT

BRANCH
UNDERWRITING & ISSUE
DEPARTMENT

BHOPA INDOR
L E TRAINING
DEPARTMENT

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 MARKETING
Areas of operations :-

• Advertising - advertising Campaigns.

• Branding - branding across training,advisor & advertising collaterals with

references.
• Market Development - through product comparision.
• Channel Marketing – to streamline the design & development of collaterals
across distribution channels.Posters,flyers,banners,danglers,sales tools,etc
developed for tied agents,bancassurance & corporate agents,as well as for product
launches & campaigns.
• Direct marketing – taps databases to generate high quality leads for profitable
business.
• Alliance marketing – seek to tie upwith channel partners that have synergies
with ICICI Prudential & develop programs that benefit the customer,ICICI Pru &
channel partner.
• Corporate communication – handles media relations & is responsible for some
of the news clips regarding ICICI Prudential that people see in the press.

Competitors :-

 Life Insurance Corporation of India.*

 Birla Sun Life Insurance Company Ltd.
 HDFC Standard Life Insurance Company Ltd.
 TATA Aig Life Insurance Company Ltd.
 Alliance Bajaj Life Insurance Company Ltd.
 SBI Life Insurance Company LTD.
 Max New York Life Insurance Company Ltd.
 Om Kotak Mahindra Life Insurance Company Ltd.
 Aviva life Insurance Company India Private Ltd.
 ING Vysya Life Insurance Company Ltd.
 AMP Sanmar Assurance Company Ltd.
 MetLife India Insurance Company Private Ltd.
 Sahara India Insurance Company Ltd.

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 *Govt. Co.

First Year Premium

(Apr’03 – Jan’04)

COMPANY PREMIUM(Rs Market Share(%)

Crore)
LIC 9780.5 87.8
ICICI Prudential 464.5 4.2
Birla Sun Life 195.0 1.8
HDFC Standard 127.5 1.2
TATA Aig 115.3 1.0
Alliance Bajaj 94.0 0.8
SBI 93.7 0.8
Max New York 91.0 0.8
Om Kotak 60.4 0.5
Aviva 50.6 0.5
Ing Vysya 38.4 0.3
Amp Sanmar 18.4 0.2
Met Life 15.6 0.1

Source:IRDA

MARKET SHARE

• ICICI Prudential Life Insurance has increased its market share among
private life insurers to nearly 40%,from 33% as of end-december.
• The company’s first year premium income in the april-January period
stood at Rs.464.6 crore,accounting for 39.3% of all the Rs.1364 crore
premium booked by all private life insurers together.

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GRAPHICAL REPRESENTATION OF COMPANIES

(As per Premium)

X-Axis:Company

Y-Axis-Premium(in Rs.Crores)

ICICI Pru
500
Birla Sun

HDFC
400 Standard
TATA Aig

300 Alliance Bajaj

SBI
200
Max New York

100 Om Kotak

Aviva
0
Ing Vyasa

Amp Sanmar

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 MARKET OVERVIEW

After the amazing run in 2003 the first quarter of 2004 was a mixed bag.The economy
roared with a growth rate of 10.4% in the last quarter of 2003.This growth has been
propelled by the spurt in the contribution of agriculture to GDP.This is the highest
quarterly growth rate ever and could pull the full fiscal growth numbers to near
8.5%.The rupee sharpely appreciated by more than Rs.2 from 45.6 levels to 43.50
levels.The IPOs of various PSUs-including ONGC the biggest public issue of India-
generated overwhembling response.Finally,to cap it all,India won the one-day series
against Pakistan.

However the markets disappointed with their performance.Fixed income markets

were violated during the quarter with 10-year yield rising in January and then falling
back in march to end at December levels of around 5015%.The deferral of market
stabilization scheme to the first quarter of FY04-05 ad the unending build up of
liquidity led to a declining level of rates in march.Dovish statements by the US Fed
and the RBI governor also helped sentiments.Inflation inched down in march after
high reported figures in the first two months of the quarter.The corporate spreads
remained flat over the quarter.Hence,the fixed income market gave marginally
positive returns in the quarter.

After the heady Nifty rally of month on month gains for eight straight months the
equity markets turned volatile this quarter.Nifty fell from 1879.7 on 31st December
2003 to 1771.9 to register a negative return of 5.75% this quarter.This has been the
worldwide trend with most markets that gave very high returns in 2003 making a
weak start in 2004.The strong FII flows couldn’t counter the supply pressures from
IPOs.In the month of march itself Rs.15.8 bn was raised from primary markets that
resulted in liquidity being sucked out of the secondary market temporarily.Supply

11
pressures and investors fatigue seem to have temporarily overtaken the positive
fundamentals.

FUTURE OUTLOOK

With the growth in GDP pegged at around 8.5% during the fiscal 2003-04,there are a
number of structural drivers for equity markets.Infratructure capex,the global
commodity cycle and the consumption upturn all point towards a better performance
of the corporate sector.Divestment is back on track with the spate of successful IPOs
last quarter.The political outlook is positive with ruling NDA looking to consolidate
its position and reforms are likely to gain fresh momentum.The flows are likely to be
good with participation from both domestic investors and international investors.One
of the positives of the current round of restructuring is the takeover of international
companies by Indian companies to gain scale & expertise.

Strong fundamentals and reasonable valuations continue to indicate a positive outlook

for equities.However the gains are unlikely to be as large or as broad based as
2003.Elections & the slowing global commodity cycle could cause volatility.

The fixed income outlook is stable in the near term.The borrowings calender and the
market liquidity are positive but with signs of industrial recovery the strength of
credit pickup will be a key factor to watch during the quarter.This implies that the
expected returns from debt are likely to be very modest in the coming quarter.

We have included a detailed article on the important of asset allocation in this

newsletter.While the mix of fixed income & equity should be based on their risk
appetite,investment goals and the life stage,we expect equities to be the best
performing asset class in the current year and recommend that investors take some
exposure to equity.Our balancer plan has been structured to have between 30-40%
equity that gives you the equity kick while providing the stabilizing influence of debt.

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 HUMAN RESOURCE

Performance management :-

We are committed to creating a performance driven culture through effective

management of performance of all staff members in a way that is mutually benifitial .
We drive the same by linking individual performance objectives to business
objectives and devaluating performance consistently.For doing all these things we
clearly set the goals,appraisal process,job descriptions etc.

Training and Capability Development program:-

The focus of our training & capability Development Programs is to develop key
competencies & skills among staff members so as to facilitate attaintment of full
people potential.Some capability development programs are Fast
Trax,Advantage,Grand Slam Specifically designed for Unit managers,FSCs and
Executive respectively.

Human Resource Policies & procedures:-

The policies and procedures of the company helps out in promoting philosophy of the
company with regard to standards of excellence;terms of employment employee
development;and employee service.There are several policies which are laid down by
the company related to travel,compensation,mediclaim,transfers etc..

PACE:-

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 The peoplesoft initiative P.A.C.E. is an enabler for our people processes.It is
personalized,Accessible,Convinient and Easy and a key stepping-stone in providing a
platform for Human Resource processes that are truly world standard.

PRODUCT HIERARCHY

SAVING PLAN

 Secure Plus.
 Cash Plus.
 Life Time II.
 Save ‘n’ Plus.
 Cash Bak.

PROTECTION PLAN

 Life Guard.

CHILD PLAN

 Smart Kid.
 Smart Link Unit Link.

RETIREMENT PLAN

 Forever Life.
 Life Link Pension.
 Life Time Pension.
 Secure Plus Pension.

INVESTMENT PLAN

 Life Link II.

ADD ON BENEFITS(RIDERS)

 Accident & Disability Rider.

 Accident Benefit Rider.
 Critical Illness Rider.
 Major Surgical Rider.
 Income Benefit Rider.

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  Waiver of Premium

SAVING PLANS

Most endowment policies are a good way of saving for the future.A policy can be
designed to make your savings grow and have them available to you at the end of a
fixed number of years.Or,a policy could provide you with an income every three or
four years.

Depending on your particular needs,savings plans could allow you to do one or

more of the following:-

 Plan for Tangibles: buy that fashionable car, that huge refrigerator, etc.
 Plan for A Cosy Nest: by facilitating the purchase of that home you have always
dreamt of.
 Plan for Milestones: ensure a good education for your children, children's wedding,
etc.
 Save on Deferred Taxes: because the interest income and maturity benefits of the
Policy are tax exempt.
 Lifestyle Planning: maintain your lifestyle - even if your income was to reduce in the
future.
 Legacy Creation: buy property, invest in shares, bonds, etc. for your children or
grandchildren.

Save'n'Protect (Endowment Assurance With Extended Life Cover)

Being the head of the family requires that you bear quite a few responsibilities. Some
of these include: being able to fund your child's higher education, your daughter's
wedding, your own cozy nest and realize all your other dreams. This is an ideal plan
for those who want to accumulate funds on a regular basis while enjoying insurance
protection.It is a fixed term policy that combines savings with life cover,in which you
pay premia regularly during the term.

CashBak (Anticipated Endowment Assurance)

As an individual you have to be financially prepared for various milestones in your

life. If you are newly married, you need to plan for a baby a few years from now. If

15
you have teenage children you need to plan for their university education. What you
need is a plan to meet your periodic financial requirements with the added benefit of
insurance protection.

Secure Plus

Planning your financial future is absolutely essential.As you plan,you realize that the
most important aspects of your financial plan are:saving enough and providing
financial security for your family.

Cash Plus

The road to your financial goals has many twists, turns and probably a few
unexpected roadblocks. Balancing the needs of savings and protection are major
considerations in your financial planning. Liquidity with your savings is also
important to take care of milestones in your life.

Life Time II

Life expectancy has been rising rapidly and today, you can now expect to live much
longer than your earlier generations. For you, this increase will mean a longer
retirement life, stretching into a couple of decades. So, it is more critical than ever to
plan adequately and wisely for those incremental retirement years, keeping in mind
that your expenses will spiral upward, your cost of living will increase and inflation
will be ever present. Therefore, you need a plan that ensures safety, risk cover,
income security and regular returns for your post- retirement years. ICICI Prudential
Life Insurance presents Retirement Solutions that combine the best of investment and
insurance. These solutions are developed to ensure your peace of mind for the years
to come. Solutions that give you the power to maintain your lifestyle needs, for as
long as you live.

16
 PROTECTION PLANS

We all hope to live a full life till a ripe old age…to ensure our children’s sustenance and
healthy growth.But what if a sudden disability or illness strikes?Besides the grief and the
pain,such an event also completely disrupts life for all the people who are financially
dependent on us.

An insurance policy can be tailor made to provide protection to you and your loved
ones,If something were to happen to you,it can help:-

 Safeguard your Better Half - ensure life’s continuity for your loved ones.
 Dear and Near ones – ensure continuity of lifestyle for your dependents.
 Attain Greater Height – ensure your children’s education continues undisrupted.
 Unforseen circumstances – bear the cost of fighting an illness,disability,etc.

LIFE GUARD

Happiness and security for our family is what all of us want.However,the uncertainities
of life often worry us.The thought of unfortunate events befalling us may cause anxiety
about our ability to provide for our loved ones.This is especially the case if we are no
longer there to provide for them.Insurance can help ease worries.It ensures that your
loved ones are adequately provided for and that their lives are not affected,even if you
are not around.

ICICI Prudential Life Insurance,India’s No. 1 private life insurance company,presents life
Guard.Choose from three term plans to insure your life and provide total security to your
family,at a very affordable cost.

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  Level Term assurance.
 Level Term assurance with return of premium.
 Single Premium.

CHILD PLANS

As a responsible parent, you will always ensure a hassle-free, successful life for your
child. However, life is full of uncertainties and even the best laid plans can go wrong.
Here's how you can give your child a 100% safe and assured tomorrow, whatever the
uncertainties. Smart Kid Child Plans are designed to provide flexibility and to safeguard
your child's future education and lifestyle, taking all possibilities into account.

Presenting SmartKid Child Plans. Leave nothing to chance

SMART KID

As parents, your biggest concern is that of securing the future of your child. In today's
world, with ever increasing competition, escalating cost of education and uncertain
financial markets, it is very important to plan for your child's future.

Smart Kid is a plan that provides guaranteed benefits to your child along with life
insurance cover. SmartKid is so designed that it provides money at all the critical
milestones in his/her life, whatever be the uncertainties

A plan which gives your child the freedom to pursue their dreams, the strength to face
challenges, the guarantee to live life to its fullest…whatever be the uncertainty

Smart Kid Child Plans offers three products:-

 Unit – Linkes regular premium II.

 Unit Link Single Premium II.

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  Regular Premium II.

RETIREMENT PLANS

Most of you picture yourselves enjoying the fruits of labor after retirement, going on your
dream vacation, or helping your children's career take wing. But do you realise that
financing all this will most likely depend partly on your personal savings? Because
personal savings and investments represent a significant source of retirement income for
many people, you can never save too much.

Currently, you are at a stage where you are juggling many roles, as nurturing parents,
dutiful care givers to elders, supportive life partners, while trying to maintain a career. It
is too easy to get carried away handling and solving the day-to-day problems to not look
into your retirement needs. It may also seem too far away to be of concern. But a look at
the issues below will make the need for some strategic planning at this stage amply clear.

Today, thanks to a healthier lifestyle and advances in medicine, the average Indian lives
longer. This makes the challenge of accumulating enough money for retirement even
more difficult, since it may have to last longer. Also, with the falling interest rate scenario
and the rising costs of medical expenses retirement means monetary uncertainty for most
of us. More so, because there is also the ever-persistent evil of inflation, which erodes
your purchasing power. The graph below illustrates how much will Rupees 10,000/-
amount to after some years:

19
Therefore, the message is simple - no matter whether you are 30 or 50, you should start
planning early to have a healthy retirement kitty. (See graph below for an illustration)

20
As can be seen the cost of delaying is high. Situation A is when you are saving Rs 10000
annually from the age of 25 to 34 years and Situation B is when you save the same annual
amount from the age of 35 to 59 years. As can be seen in the example, even after
investing your money for a 2.5 times longer duration, the maturity value in the second
case is much lesser (the figures are based on a hypothetical interest rate of 10%). The
longer your money is allowed to grow at a compounded rate, the more dramatic will the
difference be eventually.

Therefore, the message is simple - Put Time On Your Side and Start Early

We, at ICICI Prudential Life Insurance believe in the philosophy of providing meaningful
and comprehensive insurance solutions to plan your retirement. Our insurance solutions
are the most optimal tools to plan your retirement because they give you Safety,
Liquidity, Tax benefits, Health cover and Life protection and thus ensure that you are
comprehensively covered.

ICICI Prudential presents Retirement Solutions that combine the best of investment and
insurance. These solutions are developed to ensure your peace of mind for the years to

21
come. Solutions that give you the power to maintain your lifestyle needs for as long as
you live.

1. Life Time Pension II:- A regular premium linked deferred pension plan that
gives you the freedom to choose the amount of premium, and invest in market-
linked funds, to generate potentially higher returns.
2. Secure Plus Pension:- A regular premium deferred pension plan that gives you
the flexibility to choose between 3 levels of sum assured for the same level of
total annual contribution.
3. LifeLink Pension II:- A single premium linked deferred pension plan that gives
you the freedom to choose the amount of premium, and invest in market-linked
funds, to generate potentially higher returns.
4. Forever Life: regular:- premium deferred pension plan that helps you save for
your retirement while providing you with life insurance protection.

INVESTMENT PLANS

Often you may have some investible funds lying idle - a bonus or maybe a windfall. You
can either secure your family through insurance or invest it for growth. The need for
insurance is crucial but you also want to see your money grow through market
investments. But in volatile market conditions how do you secure both? Relax, because
now you can hedge your investments with safer investment vehicles that provide you
with a diversified portfolio.

ICICI Prudential Life Insurance presents Investment Solutions, which provide you high
returns, while guaranteeing complete peace of mind. This follows from our understanding
that life has many facets and they are manifested through its various needs. Therefore our
philosophy is to provide you with comprehensive insurance solutions that cater to your
dual needs of earning potentially high returns as well as stay insured for life. Thus we
offer you Investment Solutions that combine the best of insurance and investment.

22
LifeLink II - an investment plan that gives you the flexibility of choosing your
investment options while keeping you insured for life.

Depending on your particular needs, Investment Plans could allow you to do one or
more of the following:

 Plan For Tangibles: buy that fashionable car, that huge refrigerator, etc.
 Earn Market-linked Returns: earn market-related returns while your family
remains protected, even in volatile market conditions.
 Lifestyle Planning: maintain your lifestyle - even if your income was to reduce
in the future.
 Legacy Creation: buy property, invest in shares, bonds, etc. for your children or
grandchildren.

ADD ON BENEFITS(RIDERS)

ICICI Prudential offers you the unique opportunity of designing your own life insurance
policy. The freedom of selecting from any of the add-on benefits that you may need. You
can choose to take all, some or none at all. Form your very own comprehensive insurance
policy by adding the benefits you require to the basic life insurance policies on offer.

Accident & Disability Rider

i) Accident Benefit :This benefit is payable in case of death that occurs as a result of an
accident.

The death must have occured :

• when the policy is in force for the full sum assured

• any time before the expiry of the policy
• before the age of 65 (whichever is earlier.)

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If you are covered under this benefit and if death occurs as the result of an accident
during the term of the policy, your beneficiary shall receive an additional amount equal to
the accident cover under the rider. If the accidental death occurs during the term of the
policy, while you are travelling as a fare paying passenger on an authorised public mass
transport namely bus or train, your beneficiary will be entitled to twice the accident cover
under the rider. The policy terminates once the benefit of the claim is paid.

ii) Disabilty Benefit:

This benefit is payable in case of disability that occurs as a result of an accident.

The disability must have occured:

• when the policy is in force for the full Sum Assured

• any time before the expiry of the policy
• before the age of 65 (whichever is earlier.)

If the Life Assured is totally and permanently disabled as a result of an accident the
following additional benefits paid :

• 10% of the Sum Assured every year for 10 years commencing from the first
anniversary of the disability date. Premiums under this rider falling due on or
after the disability date shall be waived.
• If there are any other benefits payable under this rider then all such benefits shall
cease to be available on and after the disability date.

Accident Benefit Rider

An amount equal to sum assured under the rider is payable in the event of death of the
Life Assured due to accident. The premium charged is Re. 0.80 per Rs.1000 sum assured

The following terms and conditions are applicable to Accident Benefit Rider.

24
 • The life assured should be in the age group of minimum 18 years and maximum
55 years.
• Maximum cover ceasing age is 65 years.

The maximum aggregate of Accident Benefit Rider as well as Accident Disability Benefit
Rider granted by the company under all the policies of the life assured should not exceed
Rs. 10,00,000. All premiums paid under this rider are eligible for tax benefits under
Sec.88.

Critical Illness Rider

A rider added to a life insurance policy to protect the insured in the event of a critical
illness. 9 medical conditions are covered by this benefit. This ensures living benefits
payable to the insured for medical expenses prior to death.

Nine conditions are covered under Critical Illness Rider: Major Organ Transplant,
Complete renal failure, Stroke, Paralysis, Heart attack, Valve replacement surgery, Major
surgery of the aorta, Coronary Artery Graft Surgery (bypass), Cancer.

The critical illness is diagnosed:

• when the policy is in force for the full Sum Assured

• any time before the expiry of the policy
• before the age of 65 (whichever is earlier.)

The maximum aggregate of Critical Ilness Benefit granted by the Company under all the
policies of the Life Assured shall not exceed Rs 10,00,000.

Major Surgical Rider

A rider added to a life insurance policy to provide financial support in the event of
medical emergencies. 43 specified surgical procedures are covered under this rider.

Under this the life assured is paid

- 50% of sum assured in respect of major procedures

25
- 30% of sum assured in respect of intermediate procedures
- 20% of sum assured in respect of minor procedures

This benefit is payable on more than one occasion when the life assured undergoes
surgery. However the total benefit payable in case of all the procedures is restricted to a
maximum of 50% of the sum assured.

a. The benefit would be available only for medically necessary surgical procedures
performed at a hospital as in-patient
b. The surgical procedure is undergone :
• when the policy is in force for the Full sum assured
• any time before the expiry of the Policy
• before the age of 65 (whichever is earlier.)

The maximum sum assured under Major Surgical Assistance Benefit granted by the
Company under all the policies of the Life Assured shall not exceed Rs 10,00,000.

Income Benefit Rider

On the death of the life assured during the term of the product, 10% of the sum assured
under the rider is paid to the nominee every year, for the remaining years, till the maturity
of the policy.

If the Life Assured commits suicide whether sane or insane, within one year from the
date of issue of this policy, this benefit cover shall be void and the premiums paid
hereunder will be refunded and deducting the expenses incurred by the company for the
issue of the cover.

The maximum aggregate of Income Benefit Rider granted by the Company under all the
policies of the Life Assured shall not exceed Rs 10,00,000. The premiums paid under this
rider are eligible for tax benefits under Sec 88.

Waiver of Premium

On total and permanent disablement due to accident all future premiums both under the
base policy and rider/s will be waived till the end of the term of the rider or death of
assured life, if earlier

The death due to accident should not be caused:

26
 1. By attempted suicide or self inflicted injuries while sane or insane, or whilst the
Life Assured is under the influence of any narcotic substance or drug or
intoxicating liquor; or
2. By engaging in aerial flights (including parachuting and skydiving) other than as a
fare paying passenger on a licensed passenger-carrying commercial aircraft (being
a multi-engined aircraft) operating on a regular scheduled route; or
3. By the Life Assured committing any breach of law; or
4. Due to war, whether declared or not or civil commotion; or
5. By engaging in hazardous sports/pastimes, i.e. taking part in (or practising for)
boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering,
off piste skiing, pot holing, power boat racing, underwater diving, yacht racing or
any race, trial or timed motorsport

The maximum aggregate of Waiver of Premium Rider granted by the Company under all
the policies of the Life Assured shall not exceed Rs 10,00,000.

COMPARISION OF ENDOWMENT PLAN

COMPANY ICICI HDFC BIRLA LIC

PRUDENTIAL STA SUNLIFE
NDA
RD
Endowment Save’n’Protect Endowment Flexi Save Plus Endowment
Term(Min- (0-30)Yr (10-30)Yr (5-30)Yr (5-55)Yr
Max)
Riders - - - -
Accidental Yes Yes Yes Yes
Benefit
Disability Yes No Yes Yes
Benefit
Waiver of Yes Yes Yes Yes
Premium
Level Term Yes Yes(Double Yes No
Rider SA)

27
Critical Illness Yes Yes Yes No
Major Yes No No No
Surgical
Spouse Rider No No No No
Guaranteed No No No No
Insurability
Option
Min Sum 50,000/- 50,000/- 50,000/- for 10,000/-
Assured(Rs) Minors,75,000/
- for Majors
Premium* Rs.4484/- Rs.4835/- Rs.5148(35 Yr Rs.4796/-
male)
Maturity Rs.2,41,171/- NA** Rs.1,79,603/- Rs.2,40,000/-
Amount

Strength 1.Extended 1.Critical 1.Medicals 1Single

Life Cover. Illness’ Rider done at home. Premium
2.Only stand alone. 2.Single Option.
Company with Premium 2.Double
MSR. Option. Endowment.
3.Flexible
Rider Option.
Tax Benefit U/s 88 U/s 88 U/s 88 U/s 88

*Premium calculated for 30 years and on Rs.1,00,000/- for a 30 year male.

**Not Available.

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 COMPARISION OF MONEY BACK PLAN

COMPANY ICICI HDFC BIRLA LIC

PRUDENTIAL STANDARD SUNLIFE
Money Back Cash Bak Money Back Flexi Cash Jeevan Surbhi
Flow
Term(Min- (15 or 20)Yr (10,15,20,25,30)Yr (10,15,20,25)Yr (15,20,25)Yr
Max)
Maturity 120% 100% 100% !00%
Benefit
Accident & Yes Yes(Not Yes Yes
Disability Disability)
Benefit
Rider
Waiver of Yes Yes Yes Yes
Premium
Level Term Yes Yes Yes Yes
Critical Yes Yes Yes No
Illness

29
 Major Yes No No No
Surgical
Pay Back 3rd yr-10% 5th yr-30% 3rd yr-20% 4th yr-30%
(For 15 yr 6th yr-15% 10th yr-30% 6th yr-20% 8th yr-30%
Term) 9th yr-20% 15th yr-40% 9th yr-20% 12th yr-40%
12th yr-25% 12th yr-40% 15th yr-56%
15th yr-50% 15th yr- (including
+GA+VB Insurance Bonus)
Fund+Holding
A/c.
(For 20 yr 4th yr-10% 5th yr-25% 5th yr-20% 4th yr-25%
Term) 8th yr-15% 10th yr-25% 10th yr-20% 8th yr-25%
12th yr-20% 15th yr-25% 15th yr-20% 12th yr-25%
16th yr-25% 20th yr-25%+ 20th yr-40% 16th yr-25%
20th yr-50% Bonus +Insurance 20th yr-68%
+GA+VB. Fund+Holding (Including
A/c. Bonus)

Premium - - - -
Age 30 30 30 30
Term of 15 15 15 15
Illustration
Sum Assured 1,00,000/- 1,00,000/- 1,00,000/- 1,00,000/-
Mode of Yearly Yearly Yearly Yearly
PremiumPayment
Premium Rs.6592/- Rs.6000/- Rs.7585/- Rs.9030/
Maturity Rs.1,69,112/- NA*** Rs.2,17,047/- Rs.1,36,000/-
Amount**
Strength 1.120% Sum 1.CI stand 1.Flexible 1.Increasing
Assured. alone Premium. Death Cover.
2.MSR 2.Cash 2.Premium
3.Flexible Withdrawls paying term
Rider Option from Holdings less than
A/c. policy term.
3.Optional to
reinvest Pay
Back benefit.
Tax Benefit U/s 88 U/s 88,80 U/s 88 U/s 88

30
 D,10(10)D

*GA-Guaranteed Addition,VB-Vested Bonus

**Maturity Amount Calculated approximately.
***Not Available.

COMPARISION OF TERM PLAN

COMPANY ICICI HDFC BIRLA LIC

PRUDENTIAL STANDARD
Term Life Guard Term Plan Term Insurance Anmol Jeevan
Plan(Regular Plan
Premium)
Age at (18-50)yr (18-60)yr (18-55)yr (18-50)yr
entry(Min-Max)
Maximum 65 yrs 65 yrs 70 yrs 60 yrs
Maturity Age
Minimum Sum Rs.1,00,000/- Rs.2,00,000/- Rs.1,00,000/- Rs.50,000/-
assured
Maximum Sum Rs.10,00,000/- No limit No Limit Rs.300,00,000/-
assured
Payment Modes Yearly,Semi- Annually,Semi- Annually,Semi- Annually,Semi-

31
 Yearly or a Annually,Quarte anually or annually,Quarter
single payment rly or a Single Quarterly. ly,Monthly or
option. Payment Option. Single Payment
Option.
Premium Entire Term of Entire Term of Entire Term of Entire Term of
Payment term the policy. the policy. the policy. the policy.
Minimum Rs.2,400/- Rs.1,500/- NA* NA*
Premium(annua
l)
Maturity Benifit Nothing is Nothing is Nothing is Nothing is
payable on payable on payable on payable on
Maturity. Maturity. Maturity. Maturity.
Death Benefit Entire Sum Entire Sum Entire Sum Entire Sum
Assured Assured Assured assured
Riders Accident & Accident Accident Benefit NIL
Available Disability,Waive Disability Rider Disability
r of Premium Rider,Critical
Illness Rider

Premium - - - -
Age 25 25 25 25
Term of 25 25 25 25
Illustration
Sum 10,00,000/- 10,00,000/- 10,00,000/- 10,00,000/-
Assured(Rs)
Mode of Yearly Yearly Yearly Yearly
Premium
Payment
Premium(Rs) 2,662/- 2,770/- 2,890/- 2,803/-
Strength Low Cost Low Cost Low Cost Riders Low Cost
Tax Benefit U/s 88 U/s 88 U/s 88 U/s 88

*Not Available.

32
 COMPARISION OF CHILD PLAN

COMPANY ICICI HDFC BIRLA LIC

PRUDENTIAL STANDARD SUNLIFE
Child Plan Smart Kid Child Plan Young Scholar Jeevan Kishore
Plan Type Anticipated Endowment Anticipated Endowment
Endowment Endowment
Min-Max Matures between 10-25 years 15-20 Years
Term 22-25 years of
the child’s
age.Term is 10-
25 years.
Min-Max 0-12 years 0-8 years
age of child
Min-Max 20-60 years 18-60 years 18-50 years
age of
parents
Payment All regular All regular All regular All regular
Modes premium modes Premium modes premium modes premium modes
Life Parent Parent Parent Parent
assured
Beneficiary Child Child Child Child

33
Flexibility Two The customer has to The customer will N.A.
in Benefit Structures(1)Wh choose amongst get the amount
Structure en the child three separate bifurcated into
reaches his plans,with deferring different percent
critical premiums based on in five
milestones(xth,xi the plans. consecutive years
ith,Graduation,P after the term of
ost Graduation) the policy.
(2) Last 4 years
before maturity
Benefit- SA is paid up Opt for either one On death of Life Sum
Death of front.Child gets of the plans:1.SA assured(parent) Assured+Bonus
Parent the guaranteed +Bonuses paid 200% of sum
payments as upfront.2.SA+Bonu assured.
chosen ses paid on
earlier.All future maturity.3.SA paid
premiums are on death & SA+
waived. Bonuses paid on
maturity.

Benefit- Policy continues Policy continues as Policy continues Policy continues

Death of as it is. it is. as it is. as it is.
Child
Bonus & 3.5% of SA Simple 15 yr:6.55% N.A*
Additions computed Reversionary 20 yr:6017%
annually for the Bonuses paid till
first 4 maturity.
years,annual
bonuses declared
thereafter.
Riders Accident & None. Level Term Premium
Available Disability/ Assurance Waiver:on death
Income Benefit Rider/Accident & of proposer all
Rider. Disability inbuilt, future premium
Critical Illness on waived.
payment of
additional
premium.
Surrender Available Available Available Available
Value
Loan No No Withdrawls from No
Facility investment
account
permitted.

34
 Tax Under Sec.88 & Under Sec.88 & Under Sec.88 & Under Sec.88 &
Be Sec 10(10)D Sec 10(10)D Sec 10(10)D Sec 10(10)D
nef
its

*N.A. Not available.

~STRENGTHS~ SWOT
 No.1 Pvt.Life Insurance
To know about any company it is quite essential to know what are the major strength
Company.
of the company and the major weaknesses.This can be find out by doing Company
 Wide Distribution Channel.
Analysis through SWOT Analysis where S is for Strength , W is for Weaknesses ,
 Good Vision Power.
O is for Opportunityy while T is for Threats.
 Better Training to Employees.
 Specific Training Programmes for
~WEAKNESSES~
Advisors.
 Private Insurance Player(less trust
 Aggressive Marketing
as compared to LIC).
 Smart Advertising.
 Lesser Coverage in Rural Areas.
 Omnipresence &Quick
 Minimum Yearly Premium
Expansion. Rs.4800/-.
 Big Brand Name  Minimum Sum Assured
Rs.50000/-.
 Trained Force ~OPPORTUNITY~

 12 Bancassurance Tie-ups.  Better Growth Prospect.

 R&D.  Good Opportunities of
 40% Market Share among Private 35 Employment.
Life Insurance Companies.
 ~THREAT~

 Competiton from existing and

upcoming private companies with
excellent parentage collaboration.

MAJOR FINDINGS

ON PROJECT:-

 After doing the Product Differentiation of Four Common Products

(Endowment,Money Back,Term & Child Plan) of Four different companies
including LIC,Birla Sunlife,HDFC & ICICI PRU,I finded that any product which
is best in the market is not due to its overall features but some special features
apart from its general features which clicks customer mind,as the general features
are common among the products.
 Among the Endowment plan “Save ‘n’ Protect” of ICICI PRU is best as due to
low premium than other companies ,riders flexibility,only company providing
with Major Surgical Riders and the most special feature is extra insurance for 5
years withouth paying the premium after the term of the policy.
 Flexi Cash Plus of Birla Sunlife is the most preferable among others and it also
provides with 4 different options of Term as (10,15,20,25)yrs and the special

36
 feature is that customer can withdraw from the holding A/c and it is optional
for customer to re-invest the money for further benefits.
 Among the term plan HDFC’s Money Back is best as due to minimum Premium
of Rs.1500/- which is easily affordable,low premium,only company providing
with 60 years as maximum Age at Entry.
 ICICI Pru Smart Kid & LIC’s Jeevan Kishore has a stringe competition and may
suit to the customer in one or the other form.As ICICI Smartkid is good due to its
benefits after the death of the parent while LIC can give customer a plan or can
mould according to their needs.ICICI PRU kid now is also a market linked plan
and it is well planned due to its features of providing regular income to parents for
child’s studies/H.Studies,marriage etc.

GENERAL

 No.1 Private Life Insurance Company in India.

 Second largest Life Insurance Company in India.
 ICICI Prudential Life Insurance Market Share among Private Life Insurance
Comapanies is nearly 40%.
 ICICI Prudential Life Insurance Company has announced that it has tied up with
Visa, the leading payment brand, to accelerate the payment process of insurance
premiums.
 ICICI already has a tie up with Prudential Corporation of the UK, which manages
over $415 billion worth of funds worldwide.
 ICICI Prudential Life Insurance has tied up recently with Federal Bank for
distributing its life insurance products.
 ICICI Prudential has tie-ups with 12 Bancassurance.
 ICICI Prudential has launched several products specifically for Rural Sector.

37
 Life Insurance of Corporation of India is facing a dramatic decline in business due
to coming up of several private companies like ICICI Prudential Life Insurance.

SUGGESTIONS

 working Time of employees should be reduced.

 Stress level should be maintained among the among the employees.

 Minimum Yearly premium of Rs.4800/- should be reduced.

 Situation should not arise for the Over Time.

 A touch of professionalism to advisors can make them grow further which

will further result in company’s growth.

38
 BIBLIOGRAPHY

 www.iciciprulife.com

 www.icicibank.com

 www.birlasunlife.com

 www.lic.com

 www.hdfcstandardlife.com

 Intranet(ICICI Prudential.

 New Paper Articles.

 www.insurance.com

39
 www.irda.com

 Quarterly Review(ICICI Prudential).

 Pamphlets.

 www.hindubusinessline.com

40