Lifeinsurance sector

pragatighadge

New member
Comparative Analysis of Insurance Product - ULIP
Overview


The end of the year 2000 marks a significant change and growth of 'India Insurance' industry scenario. Monopoly of Public Sector Insurance company marks an end and Private companies makes inroad. Foreign companies, both Life and General flocked, collaborated and helped astronomical growth of 'Insurance Industry in India'. The Public sector giant LIC started losing its market share at the cost of stupendous growth of private players. Aggressive and penetrative marketing strategy coupled with wide product bandwidth was an instant success among the ignorant masses. Although, 'Insurance in India' is not regarded as a basic need but it is getting popular among semi urban to rural masses. With more awareness and wide bandwidth of insurance product portfolio the growth for 'India Insurance' story will only get more competitive and more affordable to all sections of Indian society.

The last five years have seen the introduction of fairly complex and sophisticated products in the Indian market. The traditionally popular and safe endowment products which offer savings-cum-insurance with relatively low returns have, to a good extent, made way to ULIPs which are essentially investment-cum-insurance products with potential for high returns but offering lower safety. ULIPs, by and large, are a play on the stock market and do not offer investment guarantees. Since there is a lot of demand from the market, many private companies are launching many new ULIP plans. With more and more attractive ULIP plans providing flexibility in investments, guaranteed returns, loyalty units, etc. the life insurance companies are now attracting the customers and improving their growth plans.

The main objective of the study is:
• To find the best product available in the market
• What facilities are provided to the customer?
• What is the average rate of return? and
• Who provide the best returns?

The study includes main tools such as: 1. Interviews and 2. Questionnaire

The data collected using the above mentioned tools has been analysed and a final conclusion on the study has been given by which we can see the Best Product (ULIP) available in the market. Different facilities provided by the company have been briefly mentioned individually for each product.

The study covers the best ULIP products offered by Top 10 life insurance companies, including the giant, Public Sector Insurance Company – LIC and other private companies.



CONTENTS


Sr. No. Topic
1 Introduction to Insurance
2 Size of Global Insurance Industry
3 Performance of the Indian Insurance Industry
4 Life Insurance Products in India
5 Unit Linked Insurance Policies – An insight
6 Traditional Plans v/s Unit Linked Plans
7 Unit linked Policies are the future of the insurance sector
8 ULIPS of LIC
9 ULIPS of ICICI Prudential Life Insurance
10 ULIPS of Bajaj Allianz Life Insurance Co. Ltd
11 ULIPS of SBI Life Insurance
12 ULIPS of HDFC Standard Life Insurance
13 ULIPS of Reliance Life Insurance
14 ULIPS of MAX New York Life
15 ULIPS of Birla Sun Life Insurance
16 ULIPS of TATA AIG Life
17 ULIPS of MetLife
18 Is Unit-Linked Life Insurance for you?
19 5 steps to select the right ULIP
20 The Best ULIP plan
21 Conclusion
22 Recent News
23 Encl: Questionnaire





INTRODUCTION TO INSURANCE


Life has always been an uncertain thing. To be secure against unpleasant possibilities, always requires the utmost resourcefulness and foresight on the part of man. To pray or to pay for protection is the spirit of the humanity. Man has been accustomed to pray God for protection and security from time immemorial. In modern days Insurance Companies want him to pay for protection and security. The insurance man says "God helps those who help themselves"; probably he is correct.

Too many people in this country are not in employment; and work for too many no longer guarantees income security. Several millions are part-time, selfemployed and low-earning workers living under pitiable circumstances where there is no security cover against risk. Further the inherent changing employment risks, the prospect of continual change in the work place with its attendant threats of unemployment and low pay especially after the adoption of New Economic Policy and the imminent life cycle risks - a new source of insecurity which includes the changing demands of family life, separation, divorce and elderly dependents – are tormenting the society. Risk has become central to one's life. It is within this background life insurance policy has been introduced by the insurance companies covering risks at various levels. Life insurance coverage is against disablement or in the event of death of the insured, economic support for the dependents. It is a measure of social security to livelihood for the insured or dependents. This is to make the right to life meaningful, worth living and right to livelihood a means for sustenance. Therefore, it goes without saying that an appropriate life insurance policy within the paying capacity and means of the insured to pay premia is one of the social security measures envisaged under the Indian Constitution. Hence, right to social security, protection of the family, economic empowerment to the poor and disadvantaged are integral part of the right to life and dignity of the person guaranteed in the constitution.

Man finds his security in income (money) which enables him to buy food, clothing, shelter and other necessities of life. A person has to earn income not only for himself but also for his dependents, viz., wife and children. He has to provide legally for his family needs, and so he has to keep aside something regularly for a rainy day and for his old age. This fundamental need for security for self and dependents proved to be the mother of invention of the institution of life insurance.










What is Insurance

The business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefit from it. The benefit may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the product generated by is sold and income generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income.

Every asset is expected to last for a certain period of time during which it will perform. After that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the value or income is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving benefits therefrom, would be deprived of the benefit and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations.
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

Brief History of Insurance

The business of insurance started with marine business. Traders, who used to gather in the Lloyd’s coffee house in London agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. The first insurance policy was issued in 1583 in England. In India, insurance began in 1870 with life insurance being transacted by an English company, the European and the Albert. The first Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870. This was followed by the Oriental Life Assurance Co. in 1874, The Bharat in 1896 and The Empire of India in 1897.

Later, the Hindusthan Cooperative was formed in Calcutta, The United India in Madras, The Bombay Life in Bombay, The National in Calcutta, The New India in Bombay, The Jupiter in Bombay and The Lakshmi in New Delhi. These were all Indian companies, started as a result of swadeshi movement in the early 1900s. By the year 1956, when the life insurance business was nationalized and the Life Insurance Corporation of India (LIC) was formed on 1st September 1956, There were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendments to the relevant laws in 1999, the L.I.C did not have the exclusive privilege of doing life insurance business in India. By 31.3.2002, eleven new insurers had been registered and had begun to transact life insurance business in India.


Purpose and Need of Insurance

Assets are insured, because they are likely to be destroyed through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightening, earthquakes, etc, are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils are the events. Risks are the consenquential losses or damages. The risk to a owner of a building, because of the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of the building and the contents in it.

The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of human being, death is certain, but the time of death is uncertain. In the case of person who is terminally ill, the time of death is not uncertain, though not exactly known. He cannot be insured.

Insured does not protect the asset. It does not prevent its loss due to peril. The peril cannot be avoided through insurance. The peril can sometimes be avoided through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It only compensates the losses – and that too, not fully.

Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Example of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.


How Insurance Works?

The mechanism of insurance is very simple. People who are exposed to the same risks come together and agree that, if any one of them suffers a loss, the others will share the loss and make good to the person who lost. All people who send goods by ship are exposed to the same risks, which are related to water damage, ship sinking, piracy, etc. Those owning factories are not exposed to these risks, but they are exposed to different kinds of risks like, fire, hailstorms, earthquake, lightning, burglary, etc. Like this, different kinds of risks can be identified and separate groups made, including those exposed to such risks. By this method, the heavy loss that any one of them may suffer (all of them may not suffer such losses at the same time) is divided into bearable small losses by all. In other words, the risk is spread among the community and the likely big impact on one is reduced to smaller manageable impacts on all.

If a Jumbo Jet with more than 350 passengers crashes, the loss would run into several crores of rupees. No airline would be able to bear such a loss. It is unlikely that many Jumbo Jets will crash at same time. If 100 airline companies flying Jumbo Jets, come together into an insurance pool, whenever one of the Jumbo Jets in the pool crashes, the loss to be borne by each airline would come down to a few lakhs of rupees. Thus, insurance is a business of ‘sharing’.

There are certain principles, which make it possible for insurance to remain a fair arrangement. The first is that it is difficult for any one individual to bear the consequences of the risks that he is exposed to. It will become bearable when the community shares the burden. The second is that the perils should occur in an accidental manner. Nobody should be in a position to make the risk happen. In other words, none in the group should set fire to his assets and ask others to share the costs of damage. This would be taking unfair advantage of an arrangement put into place to protect people from risks they are exposed to. The occurrence has to be random, accidental, and not the deliberate creation of the insured person.

The manner in which the loss is to be shared can be determined before-hand. It may be proportional to the risk that each person is exposed to. This would be indicative of the benefit he would receive if the peril befell him. The share could be collected from the members after the loss has occurred or the likely shares may be collected in advance, at the time of admission to the group. Insurance companies collect in advance and create a fund from which the losses are paid.

The collection to be made from each person in advance is determined on assumptions. While it may not be possible to tell beforehand, which person will suffer, it may be possible to tell, on the basis of past experiences, how many persons, on an average, may suffer losses. The following two examples explain the above concept of insurance:

Example 1

In a village, there are 400 houses, each valued at Rs. 20000. Each year, on the average, 4 houses get burnt, resulting into a total loss of Rs. 80000. If all the 400 owners come together and contribute Rs. 200 each, the common fund would be Rs. 80000. this is enough to pay Rs. 20000 to each of the 4 owners whose houses got burnt. Thus, the risk of 4 owners is spread over 400 house-owners of the village.




Example 2

There are 1000 persons who are all aged 50 and are healthy. It is expected that of these, 10 persons may die during the year. If the economic value of the loss suffered by the family of each dying person is taken to be Rs. 20000, the total loss would work out to Rs. 200000. If each person in a group contributed Rs. 200 a year, the common fund would be Rs. 200000. This would be enough to par Rs. 20000 to the family of each of the ten persons who die. Thus, the risks in the case of 10 persons, are shared by 1000 persons.


Insurance of ‘Human Asset’

A human being is an income generating asset. One’s manual labour, professional skills and business acumen are the assets. This asset also can be lost through unexpectedly early death or through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of one’s retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, there can be losses to the person and dependents. Insurance is necessary to help those dependent on the income.

A person, who may have made arrangements for his needs after his retirement, also would need insurance. This is because the arrangements would have been made on the basis of some expectations like, likely to live for another 15 years, or that children will look after him. If any of these expectations do not become true, the original arrangement would become inadequate and there could be difficulties. Living too long can be as much a problem as dying too young. Both are risks, which need to be safeguarded against. Insurance takes care.


Insurance of Intangibles

The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run risk of losses if the importers in the other country default in payments or in collecting the goods. They will also suffer heavily due to sudden changes in currency exchange rates, economic policies or political disturbances in the other country. These risks are insured. Doctors run the risk of being charged with negligence and subsequent liability for damages. The amounts in question can be fairly large, beyond the capacity of individuals to bear. These are insured. Thus, insurance is extended to intangibles. In some countries, the voice of a singer or the legs of a dancer may be insured.


Types of insurance
Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not.
Below is a (non-exhaustive) list of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set forth below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property.
• Automobile insurance known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout most of the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits.
• Aviation insurance insures against hull, spares, deductible, hull war and liability risks.
• Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.
• Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.
• Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the businessowners policy (BOP), which bundles into one policy many of the kinds of coverage that a businessowner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.
• Casualty insurance insures against accidents, not necessarily tied to any specific property.
• Credit insurance repays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death. Mortgage insurance (which see below) is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.
• Crime insurance insures the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
• Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."
• Defense Base Act Workers' compensation or DBA Insurance insurance provides coverage for civilian workers hired by the government to perform contracts outside the US and Canada. DBA is required for all US citizens, US residents, US Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
• Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes incurred by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short.
• Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.
o Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
• Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance".
• Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.
• Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as "business interruption insurance." Fidelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party (the "obligee") in the event the insured party (usually referred to as the "obligor") fails to perform its obligations under a contract with the obligee.
• Health insurance policies will often cover the cost of private medical treatments if the National Health Service in the UK (NHS) or other publicly-funded health programs do not pay for them. It will often result in quicker health care where better facilities are available.
• Home insurance or homeowners insurance: See "Property insurance".
• Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of willful or intentional acts by the insured.
o Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.
o Professional liability insurance also called professional indemnity insurance, protects professional practitioners such as architects, lawyers, doctors, and accountants against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, home inspectors, appraisers, and website developers.
• Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.
o Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.
• Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorised parties. In special cases, a government may authorise its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.
• Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.
• Mortgage insurance insures the lender against default by the borrower.
• National Insurance is the UK's version of social insurance (which see below).
• No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
• Nuclear incident insurance covers damages resulting from an incident involving radioactivive materials and is generally arranged at the national level. (For the United States, see the Price-Anderson Nuclear Industries Indemnity Act.)
• Pet insurance insures pets against accidents and illnesses - some companies cover routine/wellness care and burial, as well.
• Political risk insurance can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.
• Pollution Insurance A first-party coverage for contamination of insured property either by external or on-site sources. Coverage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded
• Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
• Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.
• Retrospectively Rated Insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
• Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that mandates participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):
o Social welfare provision
o Social security
o Social safety net
o National Insurance
o Social Security (United States)
o Social Security debate (United States)
• Terrorism insurance provides protection against any loss or damage caused by terrorist activities.
• Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction.
• Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, lost of personal belongings, travel delay, personal liabilities, etc.
• Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred because of a job-related injury.









Advantages of Life Insurance

Life insurance has no competition from any other business. Many people think that life insurance is an investment or a means of saving. This is not a correct view. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in the past, plus interest. This is so in a fixed deposit in the bank, in national savings certificates, in mutual funds and all other savings instruments. If the money is invested in buying shares and stocks, there is the risk of the money being lost in the fluctuations of the stock market. Even if there is no loss, the available money at any time is the amount invested plus appreciation. In life insurance, however, the fund available is not the total of the savings already made (premiums paid), but the amount one wished to have at the end of the savings period (which is the next 20 or 30 years). The final fund is secured from the very beginning. One is paying for it later, out of the savings. One has to pay for it only as long as one lives or for a lesser period if so chosen. There is no other scheme which provides this kind of benefit. Therefore life insurance has no substitute.

Even so, a comparison with other forms of savings will show that life insurance has the following advantages.

• In the event of death, the settlement is easy. The heirs can collect the moneys quicker, because of the facility of nomination and assignment. The facility of nomination is now available for some bank accounts.

• There is a certain amount of compulsion to go though the plan of savings. In other forms, if one changes the original plan of savings, there is no loss. In insurance, there is a loss.

• Certain cannot claim the life insurance moneys. They can be protected against attachments by courts.

• There are tax benefits, both in income tax and in capital gains.

• Marketability and liquidity are better. A life insurance policy is property and can be transferred or mortgaged. Loans can be raised against the policy.

The following tenets help agents to believe in the benefits of life insurance. Such faith will enhance their determination to sell and their perseverance.

• Life insurance is not only the best possible way for family protection. There is no other way.

• Insurance is the only way to safeguard against the unpredictable risks of the future. It is unavoidable.

• The terms of life are hard. The terms of insurance are easy.
• The value of human life is far greater than the value of property. Only insurance can preserve it.

• Life insurance is not surpassed by many other savings or investment instrument, in terms of security, marketability, stability of value or liquidity.

• Insurance, including life insurance, is essential for the conservation of many businesses, just as it is in the preservation of homes.

• Life insurance enhances the existing standards of living.

• Life insurance helps people live financially solvent lives.

• Life insurance perpetuates life, liberty and the persuit of happiness.

• Life insurance is a way of life.


The Business of Insurance

Insurance companies are called insurers. The business of insurance is to (a) bring together persons with common insurance interests (sharing the same risks), (b) collect the share or contribution (called premium) from all of them, and (c) pay out compensation (called claims) to those who suffer. The premium is determined on the same lines as indicated in the examples above, but with some further refinements.

In India, insurance business is classified primarily as life and non-life or general. Life insurance includes all risks related to the lives of human beings and General insurance covers the rest. General insurance has three classifications viz., Fire (dealing with all fire related risks), Marine (dealing with all transport related risks and ships) and Miscellaneous (dealing with all others like liability, fidelity, motor crop, personal accident, etc.). Personal accident and sickness insurance, which are related to human beings, is classified as ‘non-life’ in India, but is classified as ‘life’, in many other countries. What is ‘Non-life’ in India is termed as ‘Property and Casualty’ in some other countries.

The premium is based on expectations of the losses. These expectations are based on studies of occurrences in the past and the use of statistical principles. There is, in statistics, a “law of large numbers”. When you toss a coin, the chance of a head or tail coming up is half. If the coin is tossed 10 times, one cannot be sure that the head will come up 5 times. If the coin is tossed 1 million times, the number of heads will be closer to half a million proportionately than in the case of 10. The variation will be less as a percentage. So also, the larger the numbers (of risks) included in the pool, the better the chances that the assumptions regarding the probability of the risk occurring, which is the basis of premium calculation, will be realized in practice. In order to be amenable to statistical predictions, insurers have to insure large numbers of risks. The larger the spread of the business, the better the experience in relation to expectations.

The business of insurance is nothing but one of sharing. It spreads losses of an individual over the group of individuals who are exposed to similar risks. People who suffer loss get relief because their loss is made good. People who do not suffer loss are relieved because they were spared the loss.

The insurer is in the position of a trustee as it is managing the common fund, for and on behalf of the community of policyholders. It has to ensure that nobody is allowed to take undue advantage of the arrangement. That means that the management of the insurance business requires care to prevent entry (into the group) of people whose risks are not of the same kind as well as paying claims on losses that are not accidental. The decision to allow entry is the process of underwriting of risk. Underwriting includes assessing the risk, which means, making an evaluation of how much is the exposure to risk. The premium to be charged depends on this assessment of the risk. Both underwriting and claim settlements have to be done with great care.

Criticism of Insurance Companies
Some people believe that modern insurance companies are money-making businesses which have little interest in insurance. They argue that the purpose of insurance is to spread risk so the reluctance of insurance companies to take on high-risk cases (e.g. houses in areas subject to flooding, or young drivers) runs counter to the principle of insurance.
Other criticisms include:
• Insurance policies contain too many exclusion clauses. For example, some house insurance policies do not cover damage to garden walls.
• Most insurance companies now use call centres and staff attempt to answer questions by reading from a script. It is difficult to speak to anybody with expert knowledge.






Insurance After liberalization

The end of the year 2000 marks a significant change and growth of 'India Insurance' industry scenario. Monopoly of Public Sector Insurance company marks an end and Private companies makes inroad. Foreign companies, both Life and General flocked, collaborated and helped astronomical growth of 'Insurance Industry in India'.

'India Insurance' growth was long overdue. Within 1st 12 months of liberation of 'Indian Insurance Industry' 10 licenses for selling life insurance products and 6 licenses for selling non-life products were issued to private companies. The Public sector giant LIC started losing its market share at the cost of stupendous growth of private players. Now 'India Insurance' industry has more than a dozen private life insurance players and 9 private general insurance companies. Aggressive and penetrative marketing strategy coupled with wide product bandwidth was an instant success among the ignorant masses. Most of the private companies registered more than 100% growth till then and are still continuing with such monstrous growth figures. Although, 'Insurance in India' is not regarded as a basic need but it is getting popular among semi urban to rural masses. Top rank private companies like ICICI Prudential Life Insurance, Tata AIG, Bajaj Allianz etc are aggressively researching and innovating products for huge untapped rural 'India Insurance' market. Collaboration with micro finance companies, post offices, rural banks and village management authorities for selling insurance is doing wonders.

Life insurance products covers risk for the insurer against eventualities like death or disability. Non-life insurance products covers risks against natural calamities, burglary, etc. They are not as popular as life products in the ' Insurance India's' portfolio. Until very recently it had only corporate buyers, but with natural disasters like, earth quakes, tsunamis, storms and floods becoming more frequent and damaging there has been a sudden spurt in sales of general insurance amongst individuals. Consumerism of life style goods and modern amenities has also contributed to its growth. With more awareness and wide bandwidth of insurance product portfolio the growth for 'India Insurance' story will only get more competitive and more affordable to all sections of Indian society.


Role of Insurance In Economic Development

For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth.

As on 31.3.2002, the total investments of the LIC exceeded Rs. 245000 crores, of which more than Rs. 130000 crores were directly in Government (both State and Centre) related securities, more than Rs. 12000 crores in the State Electricity Boards, nearly Rs. 20000 crores in housing loans and Rs. 4000 crores in water supply and sewerage systems. Other investments included road transport, setting up industrial estates and directly financing industry. Investments in the corporate sector (shares, debentures and term loans) exceeded Rs. 30000 crores. These directly affect the lives of the people and their economic well-being.

A life insurance company will have large funds. These amounts are collected by way of premiums. Every premium represents a risk that is covered by that premium. In effect, therefore, these vast amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the policyholders. The management of life insurance companies are required to keep this aspects in mind and make all its decisions in ways that benefit the community. This applies also to its investments. That is why successful insurance companies would not be found investing in speculative ventures. Their investments, as in the case of the LIC, benefit the society at large.

Apart from investments, business and trade benefit through insurance. Without insurance, trade and commerce will find it difficult to face the impact to major perils like fire, earthquake, floods, etc. Financiers, like banks, collapse if the factory, financed by it, is reduces to ashes by terrible fire. Insurers cover also the loss to financiers, if their debtors default.





















Size of Global Insurance Industry




Life insurance premia written in 2005





Non-life insurance premia written in 2005


Global insurance premiums grew by 9.7% in 2004 to reach $3.3 trillion. This follows 11.7% growth in the previous year. Life insurance premiums grew by 9.8% during the year, thanks to rising demand for annuity and pension products. Non-life insurance premiums grew by 9.4%, as premium rates increased. Over the past decade, global insurance premiums rose by more than a half as annual growth fluctuated between 2% and 10%.
Advanced economies account for the bulk of global insurance. With premium income of $1,217 billion in 2004, North America was the most important region, followed by the EU (at $1,198 billion) and Japan (at $492 billion). The top four countries accounted for nearly two-thirds of premiums in 2004. The United States and Japan alone accounted for a half of world insurance premiums, much higher than their 7% share of the global population. Emerging markets accounted for over 85% of the world’s population but generated only 10% of premiums. The volume of UK insurance business totaled $295 billion in 2004 or 9.1% of global premiums.



Performance of Indian Insurance Industry


Performance up to October 2006

The performance growth rate that was 22.8 percent as at September 2006 has moved up to 23.3 percent at the end of October 2006, an improvement of significance. The total premium at the end of October is Rs.14,628 crore as against Rs.11,855 crore. The established players have added Rs.807 crore at a growth rate of 8.3 percent with the new players adding Rs.1966 crore at a growth rate of 62 percent. Here again, ICICI Lombard has achieved an accretion of Rs.887 crore; whereas the total accretion of all the established players is Rs 807 crores, a truly impressive record. New India with Rs.286 crore, closely followed by Oriental with Rs.277 crore are the major contributors for the established players. Reliance, a late starter in the race for premium acquisition has recorded an accretion of Rs.357 crore as against a meager last year renewal of Rs.89 crore. The growth path is now led by several players: with eight out of the twelve players having achieved accretions in excess of Rs.100 crore and more at the end of October 2006. With the imminent detariffing around the corner in January 2007, the next two months should witness even more fierce battles for supremacy of the market turf. A few of the new players are inching towards breaking into the big league premium players of yesteryears and this may happen sooner than one thought. Interesting and challenging times are certainly ahead for all the players.


Premiums Rise 163.68% over October, 2006

Individual premium:
The life insurance industry underwrote Individual Single Premium of Rs.1336610.10 lakh for the period ended October, 2006 of which the private insurers garnered Rs.118242.78 lakh and LIC garnered Rs.1218367.32 lakh. The corresponding numbers for the previous year were Rs.443296.40 lakh for the industry, with private insurers underwriting Rs.64530.68 lakh and LIC Rs.378765.72 lakh. The Individual Non-Single Premium underwritten during April-October, 2006 was Rs.1771903.71 lakh of which the private insurers underwrote Rs.536863.16 lakh and LIC Rs.1235040.55 lakh. The corresponding numbers for the previous year were Rs.743586.24 lakh, Rs.260432.63 lakh and Rs.483153.61 lakh respectively.

Group premium:
The industry underwrote Group Single Premium of Rs.467348.58 lakh of which the private insurers underwrote Rs.30147.74 lakh and LIC Rs.437200.84 lakh. The lives covered being 7678192, 456696 and 7221496 respectively. The corresponding numbers for the previous year were Rs.171382.70 lakh with private insurers underwriting Rs.17261.98 lakh and LIC Rs.154120.72 lakh and the lives covered being 8547743, 397721 and 8150022 respectively. The Group Non-Single Premium underwritten during April-October, 2006 was Rs.53221.05 lakh which was underwritten entirely by the private insurers, covering 2366084 lives. The corresponding numbers for the previous year were Rs. 18031.15 lakh and covering 1277400 lives.

Segment-wise segregation:
A further segregation of the premium underwritten during the period indicates that Life, Annuity, Pension and Health contributed Rs.2329869.52 lakh (64.24%), Rs.74006.48 lakh (2.04%), Rs.1221904.91 lakh (33.69%) and Rs.897.90 lakh (0.02%) respectively. In respect of LIC, the break up of life, annuity and pension categories was Rs.1677831.45 lakh (58.04%), Rs.69437.82 lakh (2.40%) and Rs.1143339.44 lakh (39.55%) respectively. In case of the private insurers, Rs.652038.07 lakh (88.58%), Rs.4568.66 lakh (0.62%), Rs.78565.47 lakh (10.67%) and Rs.897.90 lakh (0.12%) respectively was underwritten in the four segments.

Unit linked and conventional premium:
Analysis of the statistics in terms of linked and non-linked premium indicates that 49.46% of the business was underwritten in the nonlinked category, and 50.54% in the linked category, i.e., Rs.1793702.35 lakh and Rs.1832976.45 lakh respectively. In case of LIC, the linked and non-linked premium was 41.38% and 58.62% respectively, as against which for the private insurers taken together this stood at 86.53% and 13.47% respectively. During the corresponding period of the previous year, linked and non-linked premium indicates that 54.74% of the business was underwritten in the non-linked category, and 45.26% in the linked category, i.e., Rs.752509.54 lakh and Rs.622185.30 lakh respectively. In case of LIC, the linked and non-linked premium was 33.96% and 66.04% respectively, as against which for the private insurers taken together this stood at 77.02% and 22.98% respectively.


Growth momentum continues in October 2006 with 25.3 percent

All-round growth:
The month of October 2006 has been the month of extraordinary growth for the non-life insurers with the growth rate high at 25.3 percent. This achieved rate is only slightly below that of September of 25.8 percent. As against the monthly renewals of Rs.1772 crore in October last year, the premium income scaled in 2006 is Rs.2220 crore. The established players have recorded an accretion of Rs.151 crore at a growth rate of 11.3 percent. The new players have had an accretion of Rs.297 crore at a growth rate of 63 percent. Among the former, New India leads with an accretion of Rs.60 crore followed by Oriental with Rs.56 crore. But the stellar performances in the month have come from ICICI Lombard that has produced a massive accretion of Rs.167 crore with Reliance adding Rs.56 crore to its meager renewal premium of Rs.12 crore.



The new players have continued to maintain a strong grip on their market share that stands at 35 percent. Two points of interest to the market have emerged. One is that the monthly accretion of ICICI Lombard at Rs.167 crore is higher than the combined accretion achieved by all the established players of Rs.151 crore. This performance should stand out as of interest to the market. The second point of market interest is that for the first time, the October monthly premium of ICICI Lombard at Rs.310 crore has exceeded the monthly premium performances of National Insurance and UIIC that have accomplished premiums of Rs.305 crores and Rs.257 crore respectively. The established players do seem to be coming under increasing pressure by the new players with their relentless high growth rates and premium productions.














41 per cent growth in life insurance industry in 2006
New Delhi: Life insurance sector grew by 41 per cent in 2005-06 due to better performance of country's largest life insurer, LIC, and private players like Bajaj Allianz and ICICI Prudential.
The 15 life insurance companies together collected Rs 35,898 crore in the fiscal ended March this year, compared to Rs 25,343 crore in the previous fiscal, according to data compiled by regulator IRDA.
Life Insurance Corporation's premium income rose more than 28 per cent to Rs 25,645 crore after it sold 3.16 crore policies as against Rs 19,972 crore collected a year ago.
However, LIC's market share dipped by 6.63 per cent to 71.44 per cent from 78.07 per cent in the year ago period due to stiff competition and aggressive marketing of private life insurers.
The 14 private players were able to steadily increase their market share from 21.93 per cent to 28.56 per cent in a year's time by collecting Rs 10,252 crore during the period under review.

Private sector life insurance business jumps 90%
In a tough battle to expand market shares the private sector life insurance industry consisting 14 life insurance companies at 26% have lost 3% of market share to the state owned Life Insurance Corporation(LIC) in the domestic life insurance industry in 2006-07.
According to the figures released by Insurance Regulatory & Development Authority the total premium these 14 companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.
LIC with a total premium mobilisation of Rs 55,934 crore has been able retain a market share of 74.26 % during the reporting period. In total the life insurance industry in first year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a few surprises in the ranking among the private sector life insurance companies. New entrants like Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively during the year. Reliance Life which has become one of the top five companies ended the year with a premium of Rs 930 crore during the year.
Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance company during the year Bajaj Allianz overtook ICICI Prudential in terms of monthly market share in March, for the first time ever. Bajaj's market share among private players in non-single premium for March stood at 29.1% vs. ICICI Prudential's 23.8%. Bajaj gained 4.6 percentage point market share among private sector players for FY07.
Among other private players, SBI Life and Reliance Life continued to do well, each gaining 4% market share in FY07. SBI Life's growth was driven by increasing contribution from ULIP premiums. Another notable developments of the 2006-07 performance has been the expansion of retail markets by the life insurance comapnies. Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudential has expanded over 19 lakh policies during the year.

Building a Vibrant Insurance Market in India
India's insurance industry is an example of the positive effects of competition and new investors in the marketplace. As we know, India opened its insurance market to the private sector in 1999 when parliament passed a new law establishing an independent regulatory body to oversee the insurance market. The law opened the door for participation of private insurance companies and a limited participation of foreign insurance companies through joint ventures with Indian companies. The law also charged insurance companies to make available insurance products and services to the huge segment of the population that are vulnerable and not necessarily part of the formal economy.
The results of the liberalization are there for everyone to see. The insurance markets -- both life and non-life -- have grown impressively. IRDA is working on a regulatory framework that helps level the playing field for all types of insurance companies, irrespective of their ownership. Since 1999, IRDA has licensed 22 new private Indian insurance companies, an overwhelming number of which have global insurance companies as their partners. To date, the industry has attracted foreign direct investment of $235 million.
In 2006, Indian insurance companies mobilized over $29 billion, nearly four times as much as in 1999 ($8 billion). In other countries, this kind of capital mobilization provides crucial resources for investment in infrastructure, corporate businesses, long-term bonds, and municipal projects. Once India does more to free insurance companies to invest in such important sectors, it too can gain benefit from this long-term financial resource.
Other improvements are occurring as well. New insurance products such as product liability insurance, professional liability insurance, small/medium size enterprise insurance, weather insurance, and group health insurance for the poor have been launched. Private insurance companies are also using banks, microfinance institutions and cooperatives to increase their market share and compete with well-entrenched state-owned insurance companies.
The marketplace is getting competitive, but the market share of private insurance companies remains very low -- in the 10-15 percent range. The heavy hand of government still dominates the market, with price controls, limits on ownership, and other restraints. We have seen what happens in India when a market is truly opened up. We saw it in the IT sector, we saw it in the telecom sector, and we are seeing it in the aviation sector. Why can't insurance be next? India's insurance market remains very small compared with some of the major emerging markets. South Africa and South Korea, with a fraction (one-twentieth) of India's population, do at least twice as much insurance business as Indian companies did in 2004. This is a major missed opportunity for India's economy. A vibrant insurance market can support the economy by providing long-term capital -- equity and debt -- to the private sector. For example, in the U.S. over two-thirds of financial assets of insurance companies are in corporate bonds and equities, municipal securities and commercial mortgages.

Insurance also shields households and businesses from irrecoverable loss, such as from major natural disasters, illness and death. In India, 80 percent of health care is privately provided, yet only 10 percent of the population has access to health insurance. Therefore, many individual households have to pay the full out-of-pocket costs for health treatment.
What will expand the insurance industry and help it contribute to the economy? Major policy and institutional issues have to be addressed and changed.
Insurance is a capital-intensive industry. It is also a long-gestation business. India's insurance industry needs capital, and a major source of capital would be from foreign investors, who are now limited to 26 percent ownership. India needs to raise the cap on Foreign Direct Investment (FDI) to attract capital for the industry. For some time there has been an understanding that the FDI cap will be raised to 49 percent, and many companies entered the Indian market with this expectation. Failure to follow through in raising the cap is increasingly seen by investors as a breach of faith.
This promise needs to be delivered, not 5 years from now, but soon, if India wishes to regain its credibility in the eyes of foreign investors. Increasing the cap on FDI will both enhance the growth of the insurance industry and improve global confidence in India as a business and investment destination.
The cap should be raised above 50 percent within a short period so that foreign investors would have management control commensurate with their investment and the flow of FDI to the sector will increase. Leading foreign companies bring more than capital to the insurance industry. They also bring generations of successful experience in managing and growing the industry.

The benefit of the long-term capital that the insurance industry mobilizes is also being lost as a source of long-term capital. In India, over 60 percent of the insurance industry's financial assets are locked in government securities. Investment guidelines for insurance companies prescribed by the regulator must be changed to allow and promote access to insurance funds by the corporate sector and infrastructure projects.

There is also a strong case for raising the FDI cap for reinsurance and auxiliary insurance services, such as brokerage and actuarial services.
Major lines of non-life insurance business such as fire and car continue to be governed by a pricing regime that is administered and not risk-based. This distorts the market and makes it inefficient. It has prevented the emergence of a culture of underwriting in insurance companies. The IRDA needs to dismantle this regime to make these segments of the market truly competitive.
The IRDA should also seek to create a regulatory regime that promotes the most efficient use of capital, eliminates avoidable micro-management of business practices, allows companies to price their products prudentially, and levels the playing field between private and state-owned insurance companies. When markets are competitive and responsive to consumer demand and preference, it is the consumer that benefits in terms of lower cost and increased ability to manage risks.
Health is an area that is underserved by the insurance industry. India as an economy has high health spending but poor health outcomes. With no pooled risk sharing from insurance policies and a health care system that is primarily private, the cost to individuals becomes a major economic burden. For this reason, many microfinance institutions are finding that a primary use of micro loans to the poor is to pay medical bills.
The current minimum capital requirement of $22 million capital for setting up a health insurance company is a significant barrier to entry, particularly when FDI is restricted to 26 percent. The lack of data from both health providers and from existing claims makes risk-based pricing of health insurance products difficult. The absence of an appropriate regulatory framework that enforces a minimum level of service and hygiene standards is an important reason the health insurance market in India is so underdeveloped. It is not surprising that not a single health insurance company is among the 22 new private insurance companies licensed since 1999. Clearly, the IRDA and the Ministry of Health need to work in tandem to solve these problems.

Another area where the insurance industry is not doing its job is helping mitigate the risks for personal and business loss from natural catastrophes. In the past decade, India and China accounted for one-fourth of the global economic losses from natural disasters. Insurance availability in India for natural catastrophes is almost negligible. As we have seen with the Indian Ocean tsunami, the absence of a "safety net" for property lost in a disaster has led to substantial personal loss and slowed economic recovery.


Insurance Sector Reforms in India: Challenges and Opportunities

Insurance in India started without any regulations in the nineteenth century. It was a typical story of a colonial era: a few British insurance companies dominating the market serving mostly large urban centers. After the independence, the Life Insurance Company was nationalized in 1956, and then the general insurance business was nationalized in 1972. Only in 1999 private insurance companies were allowed back into the business of insurance with a maximum of 26 per cent of foreign holding (World Bank Economic Review 2000). The entry of the State Bank of India with its proposal of bank assurance brings a new dynamics in the game. On July 14, 2000 Insurance Regulatory and Development Authority bill was passed to protect the interest of the policyholders from private and foreign players. The following companies are entitled to do insurance business in India.

The private insurance joint ventures have collected the premium of Rs.1019.09 crore with the investment of just Rs.3,000 crore in three years of liberalization. The private insurance players have significantly improving their market share when compared to 50 years Old Corporation (i.e.LIC). As per the figures compiled by IRDA, the Life Insurance Industry recorded a total premium underwritten of Rs. 10,707.96 crore for the period under review. Of this, private players contributed to Rs.1, 019.09 crore, accounting for 10 percent. Life Insurance Corporation of India (LIC), the public sector giant, continued to lead with a premium collection of Rs.9,688.87 crore, translating into a market share of 90 per cent. In terms of number of policies and schemes sold, private sector accounted for only 3.77per cent as compared to 96.23 per cent share of LIC (The Economic Times, 21March,2004).
The ICICI Prudential topped among the private players in terms of premium collection. It recorded a premium of Rs. 364.9 crore and a market share of 25 per cent, followed by Birla SunLife with a premium under- written Rs.170 crore and a market share of 15 percent, HDFC Standard with 132.7 crore and Max New York Life with Rs.76.8 crore with a market share of approximately 15 per cent each. Unlike their counterpart in the life insurance business, private non-life insurance companies have not yet started addressing the retail market. All is set to change in the coming years. Like in the banking sector, non-life insurance companies will soon have no choice but to focus on individual buyers.

The latest series of bomb attacks, attack on parliament, attack on Ayodya, attacks of the Maoists, nature calamities like tsunami, floods and drought, ragging are prevailed in the country and need not to say about the farmer who has been insecure about rains, seeds, crops and suitable price for his crop. In developed countries, the owners have insured even pet dogs. Whereas in India, about 80 percent of human beings and major natural resources have not been insured in globalization era.

It is, therefore, an urgent need to explore the challenges and opportunities faced by the insurance sector in India.

India’s Insurance Industry Likely To Jump By 500% In 2010: ASSOCHAM

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has projected about 500% hike in the size of domestic insurance business which will grow to US$ 60 billion by 2010 from the current size of around US$ 10 billion as the growing competitive age is developing a larger appetite among people for wider insurance coverage.
The projections of the Chamber are based on feedback that it received from its various constituents, engaged in the insurance business, highlighting that India’s life insurance premium as a percentage of GDP is currently estimated at 1.8% against 5.2% in US, 6.5% in UK and about 8% in South Korea.
Releasing the analysis, ASSOCHAM President, Mr. Venugopal N. Dhoot said that rural and semi-urban India will contribute US $35 billion to the Indian insurance industry by 2010, including US $20 billion by way of life insurance and the rest US $15 billion through non-life insurance schemes.
“A large part of rural India is still untapped due to poor distribution, large distances and high costs relative to returns. Urban sector insurance is estimated to reach US $25 billion by 2010, life insurance US $15 billion and non-life insurance US $10 billion”, added Mr. Dhoot.
Size of Insurance Sector (In US $ billion)
Projections*
Category Rural & Semi-Urban** Urban Total
Life Insurance 20 15 35
Non-Life Insurance 15 10 25
Total 35 25 60
* Projected figures by 2010
** A town/village where population is less than 25000
ASSOCHAM findings further reveals that in the coming years the corporate segment, as a whole will not be a big growth area for insurance companies. This is because penetration is already good and companies receive good services. In both volumes and profitability therefore, the scope for expansion is modest.
ASSOCHAM has suggested that insurer’s strategy should be to stimulate demand in areas that are currently not served at all. Insurance companies mostly focus on manufacturing sector; however, the services sector is taking a large and growing share of India’s GDP. This offers immense opportunities for expansion opportunities.
To understand the prospects for insurance companies in rural India, it is very important to understand the requirements of India's villagers, their daily lives, their peculiar needs and their occupational structures. There are farmers, craftsmen, milkmen, weavers, casual labourers, construction workers and shopkeepers and so on. More often than not, they are into more than one profession.
The rural market offers tremendous growth opportunities for insurance companies and insurers should develop viable and cost-effective distribution channels; build consumer awareness and confidence. The Paper found that there are a total 124 million rural households. Nearly 20% of all farmers in rural India own a Kissan Credit cards. The 25 million credit cards used till date offer a huge data base and opportunity for insurance companies. An extensive rural agent network for sale of insurance products could be established. The agent can play a major role in creating awareness, motivating purchase and rendering insurance services.
There should be nothing to stop insurance companies from trying to pursue their own unique policies and target whatever needs that they want to target in rural India. ASSOCHAM suggests that insurance needs to be packaged in such a form that it appears as an acceptable investment to the rural people. In the near future, when we’ll see more innovations in agriculture in the form of corporatization or a more professional approach from the farmers’ side, insurance will definitely be one option that the rural Indian is going to accept.
ASSOCHAM believes that insurers should enter into tie-ups or understandings with government agencies to ensure the success of the insurance schemes. The need of the hour is to have innovative policies that have explicit benefits for the people to observe, understand and measure.


Indian Insurance Industry: New Avenues for Growth 2012

Description: With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) was estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services’ contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. This report, “Indian Insurance Industry: New Avenues for Growth 2012”, finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the non-life insurance market. Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999.








Life Insurance Products in India


The last five years have seen the introduction of fairly complex and sophisticated products in the Indian market. The traditionally popular and safe endowment products which offer savings-cum-insurance with relatively low returns have, to a good extent, made way to ULIPs which are essentially investment-cum-insurance products with potential for high returns but offering lower safety. ULIPs, by and large, are a play on the stock market and do not offer investment guarantees. The investor therefore not only needs to make a well informed choice at the time of purchase but also needs to stay alert and balanced during the term of the policy. Through all this the distributor has a big role since the investors depend on him for information and guidance. The insurers must therefore equip them with the inputs, attitude and integrity required to sell and service these policies. Otherwise not only do the investors lose their money in these 'risky' products but the sector will also suffer a loss of credibility and goodwill.

The other important introduction to the basket of products in the recent times is critical illness covers. Thanks to the changes in the lifestyles, the incidence of morbidity among people during their earning spans has increased drastically, causing not only huge expenses towards treatment/surgery but also a loss of income to the afflicted individuals. This has created a huge need for CI covers in the market though the awareness levels in the society remain highly inadequate. The success of this product category in the market hinges on whether the distribution channels can effectively rope in the public to this new tool of protection. This is more true in the case of standalone critical illness covers with no returns at the end of the term that are now beginning to be launched. Thus the era of knowledge-products has arrived in India in the last few years and there is no alternative but to train and upgrade the selling force so that they are in a position to take these products to the public and effectively convince them of the utility or even the indispensability of these new tools of investment and protection.

However, a good number of these policies are sold at the bank window rather than at the doorstep of the customer. This raises a few issues. For instance, it is easy for a bank to sell a policy to a farmer while sanctioning him a farm loan but extremely difficult for them, being already busy with core functions, to follow up for payment of renewal premiums or to provide postsales servicing. Only those bankers who sell to a smaller number of high value customers will perhaps be able to pay individual attention on all the policies sold. Though exact data is not available, it is already seen that lapses are quite high in the policies sold through this channel. To overcome this issue banks may create dedicated teams exclusively responsible for post-sales servicing of these policies within the banks. Alternatively they may restrict themselves to products which require minimal servicing support. While brokers have done well and captured a good share in the non-life business, their contribution has been rather insignificant on the life side. It calls for further probing to understand the reasons for the same and to see if they can be encouraged to participate with greater enthusiasm in the life business as well, at least to the extent of leveraging their non-life clientele for this purpose.

The major concern in the life insurance sector remains to be the inadequate coverage. It is estimated that the number of people covered by life insurance is a mere one-fifth of the insurable population. Though the regulator has stipulated rural and social sector coverage targets and come out with micro insurance guidelines with many enabling features and relaxations, results are yet to be seen. Coverage is largely a function of distribution and it is therefore to be understood that any major improvement in coverage can be achieved only by enlarging the distribution network. While micro insurance has provided for leveraging MFIs, NGOs and SHGs for distribution of micro insurance products, their own coverage is at best partial. Therefore one should also perhaps look towards massive recruitment of agents from among communities and regions which are under covered. It may also not be undesirable to offer relaxations with regard to eligibility conditions and stipends to agents from these segments. To conclude, so far as distribution of life insurance is concerned, in the present context, more channels, more agents and more and more training is perhaps what the doctor ordered. If distribution is the cutting edge of life insurance business, the longer and sharper the edge the better.













Unit Linked Insurance Policies - An insight

The post-independence era witnessed a steady growth in the insurance sector but the concept never went beyond the urban sector. In 1956, the Indian government amalgamated around 240 life insurance companies under one new nationalised entity viz. Life Insurance Corporation of India. The general (non-life) insurance business, however, was nationalised in 1972.
The Union Government opened up the insurance field for private players and welcomed foreign participation in March 2000. This was following the passage of the Insurance Regulatory and Development Authority (IRDA) bill with some restrictions on the foreign direct investment, which is currently at 26%. The proposal to increase the FDI cap to 49% is anxiously awaited by the insurance sector, post general elections as a "feel good" factor. Till the entry of the private insurers, the full potential of life insurance market remained unexplored. Of the vast 400 million insurable, Indian population, it could reach only a meager 19%. LIC sold insurance coverage, more as a tax saving instrument than as protecting the lives against risks. The products were quite rigid and less transparent. But the private insurers banged the market with innovative products, smart marketing techniques and aggressive distribution pattern.
The outlook of the modern day investors has undergone a dramatic change. In the changed fiscal scenario with drastic fall in the interest for investment and the volatile capital market with limited investment options, ULIP comes to the rescue of the prudent investors. Investment in insurance has become the style of the day. The individual looks at buying an insurance policy more of an investment, which comes with the additional benefits of life cover and tax benefit also.
ULIP - Unit Linked Insurance Policy - ULIP is a unique, multiple benefits Plan which combines the basic benefit of life insurance, tax benefits and accident insurance cover. The plan offers tax rebate of 20% on the amount invested under Section 88 of the Income Tax Act within the overall limit of Rs. 60,000/-.
With the Insurance industry booming up in the Indian economy following liberalised regulations from the IRDA, the ULIPs have regained their strength. This was further boosted by the private insurance companies with foreign partners.
Under ULIPs, the premiums are invested after deducting the charges and fees in a fund similar to that of a mutual fund along with a life insurance cover. The IRDA regulates that a unit-linked plan must be offered to the investor with an option to select among debt, balanced and equity funds. For example, if an investor opts for a unit-linked endowment policy, he can choose to invest his premiums in debt, balance or equity funds. If he selects a debt fund, the majority of his premium will be invested in debt securities like gilts and bonds. If the option is equity, a major portion of the premium is invested in the equity market. The selection of policy depends upon its risk profile and the investment needs. Higher the risk, higher would be the returns and vice versa.
Advantages of Unit-Linked Plan
A combination of protection and tax advantage, unit-linked policies dominate a huge chunk of the portfolio of the private insurers. The annual premium contributes over 70% to the premium income. In the event of death during the life of the policy, the sum assured or value of the policy fund whichever is higher is paid to the nominees. In case of normal maturity, the value of the fund is paid out. Therefore, the risk is transferred to the policyholder and there is no guarantee of returns. There is a lot of flexibility in these plans with falling interest rates, says the Chairman of LIC, Mr. S B Mathur. The risk element is transferred to the investor and the insurance company enjoys the capital and solvency, he continued. The client is also quite aware of the "no guarantee" era and he plans his investment judiciously. The client enjoys transparency, by way of returns on the equity markets simultaneously enjoying the benefits of life cover. It's tax-free, unlike a mutual fund or any other investment, where the gains are taxed. The client also has an option of restructuring his investment pattern which is a value addition to the original policy.
Contrary to the traditional policies, the unit linked policies are more transparent, flexible and easy to understand. The customer has open options for investment and he is consciously aware of the ratio of his premium towards investment and life cover.

Computation of unit-linked policies
There is an upfront payment of charges and fees. An initial administrative charge is deducted from units, which will be around 15% per annum in the first year, around 7% during the second year and around 3% thereafter. There is also an upfront payment of investment management charges, which depends on the type of fund selected. Finally, there is a deduction for risk cover, which is based on mortality rates.
Of a total premium of Rs. 10,000 paid in the first year, Rs. 1,500 is deducted towards initial administration fees, Rs.100 towards investment management fees (assuming the fund opted for is equity) and Rs. 240 towards annual administration fees. An amount towards risk cover would be deducted say Rs. 169. The balance amount is Rs. 7791 that would be invested in the fund. The second year premium will be accordingly commuted and the balance would be invested. So every time the premium amount is paid to the insurance company, a part of the same is invested in the option chosen by the policyholder.




Traditional Plans v/s Unit Linked Plans

“The idea of Ulips was more transparency than traditional plans, which is why every charge is spelt out. An investor knows where his money is being invested.”
- Mr. C.S. Rao, Chairman,
Insurance Regulatory and Development Authority (IRDA)

Broadly, insurance plans can be distinctly divided into traditional plans and ULIPs. A brief detail of both segments:

Traditional Plans
These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:
1. Steady Investment
1. Major chunk of investible funds are in debt instruments
2. Steady and almost assured returns over the long term
2. Features
1. Death benefit is Sum Assured + guaranteed & vested bonus
2. Helps in asset creation as they are for a long tenure
3. Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity

Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer. These include:
1. Flexibility
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium /Sum Assured even after the plan has started.
4. Flexibility to change asset allocation by switching between funds
2. Transparency
1. Charges in the plan & net amount invested are known to the customer
2. Convenience of tracking one’s investment performance on a daily basis.
3. Liquidity
1. Option to withdraw money after few years (comfort required in case of exigency)
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed
4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a combination)
2. Option to choose your fund mix based on desired asset allocation
Unit linked policies are the future of the insurance sector

There is a growing response to the unit-linked policies. The market statistics show that over 25,000 Bima plus policies have been sold during 2003. Aviva accounts for 68% to the sale of unit-linked policies owing to the bullish share market and also the effective fund management by the company. ICICI PruLife witnessed 87% of its annual premium flowing from the unit-linked products in the third quarter of the current financial year as compared to the previous year premium at 49%. All the private insurers have started their entry in 2004 with more and more unit-linked policies.
Riders and unit linked products have led some of the visible innovations in the market place. Riders can be used to customise life insurance for varying customer requirements, provide health coverage, and improve a product's competitive profile through improved customer value. Health oriented life insurance covers, asset allocation products, saving products, which offer downside protection with the opportunity to participate in upsides, worksite-marketing products, and customised group corporate retirement products are among the emerging innovative product categories. Regulation will also play a crucial role in the speedy emergence and efficacy of other innovative product offerings and categories. Finally, as the pension market develops, variable annuities (VA) and equity-indexed annuities could emerge as part of the product suite of life insurance companies. Clearly, product innovation is a major strategic imperative for insurers. The key is to offer products based on deep insights of consumer needs. In the long term, only such products survive and grow into a meaningful and profitable component of an insurer's product portfolio.
The opening up of the insurance sector saw the emergence of innovations introduced by private players, initially in terms of product offerings. The insurance industry, which till then had seen minimal product innovations, saw the advent of unit linked insurance products (ULIPs). Moreover, liberalisation of the sector also saw the advent of over-the-counter and pre-underwritten products that are offered by banks to its customers. These are products with no underwriting that are cross-sold with home loans and the like. Innovations have also come about in the area of value added services as companies started providing value additions like online purchase of insurance policies, payment of premiums by credit cards and online tracking of net asset values (NAVs).
Apart from protection benefits, ULIPs provide policyholders an opportunity to earn returns linked to the underlying financial markets. Also, unlike conventional products, the charges in ULIPs are transparent. Top-ups, premium redirection options, facility to switch partially or fully from one fund to another, etc, make these products very flexible. Lower regulatory capital requirements vis-à-vis endowment products have also helped insurers drive down the costs of these products. These factors coupled with stellar returns in the equity markets have made ULIPs, particularly, appealing. ULIPs give customers an option to participate in equity and debt markets depending on their risk appetite. Traditional products did not offer the facility to choose and change their pattern of investment in a particular policy. ULIPs are useful for those who want to be insured but at the same time are interested in investing in an avenue, which matches their risk-return profile. ULIPs are best suited for those who have a conceptual understanding of financial markets and are genuinely looking for a flexible, long-term investment-cum-insurance. ULIPs have gained in popularity due to the flexibility they offer to policyholders in choosing the investment pattern along with the transparency in charges besides the ease of comparison of the final illustrated values.
The increase in the sales of ULIPs has been due to a combination of factors - buoyant capital markets, favourable tax regime, strong performance by the underlying funds, highly flexible features, and a transparent charge structure. Innovations such as capital guarantees and upside participation rights should provide support in the event of a market decline. The booming stock market has not only caught the attention of the investor fraternity but has also generated interest for the common man. The upwardly bound Sensex has renewed interest in the equity markets for consumers and this has also helped to increase the popularity of ULIPs due to its participation in the equity markets. People are now looking at ULIPs as a safer route to investing in the equity markets.
The new guidelines on single premium unit link plans and top ups are effective since July 1, 2006. Single premium products fulfill a market need (The withdrawal of tax concessions in 2003 has not dented the appeal of single premium products). ULIPs would continue to address this need. The use of top-ups as a savings enhancement tool is also likely to continue, albeit at a lower level.
There is no doubt that currently many single premium ULIPs are being positioned as short term investment avenues with very little amount of insurance. The guidelines will change this scenario as it envisages the following:
• All unit link plans including single premium will have a minimum lock-in period of three years. The guidelines will impact those single premium sales where withdrawal was permitted almost immediately after sale.
• The minimum risk cover under the single premium unit link plan has been raised to 125% of the single premium. Currently, many plans have it lower than this. This will also differentiate a single premium unit link plan from a mutual fund in terms of insurance cover.
• The guidelines have also specified that top up premium should be within 25% of the total basic regular premiums paid up to a particular date. In case the top up exceeds 25% of the marked limit, insurance coverage would have to be increased by 125% of the amount by which the top up premiums have crossed the 25% mark. This is going to have an impact wherever top ups were being positioned as a pure investment option without any linkage to the risk cover.

ULIPs in the pipeline
The regulator gave 30th June as the deadline for removal of the non-complaint policies. To fill in the void by this removal, about 100 new unit linked plans are in the pipeline as replacements. They are slated for launch in a week's time. Insurers have already put in place new products to replace the non-compliant plans.
Under these new plans, the regulatory authorities require the insurers to be more transparent and user friendly with the investment options they offer. This includes providing more protection, disclosing more information and increasing the lock-in period for schemes. These guidelines follow the fear of regulators that short-term investment products will not suit long term investment needs of policyholders. The insurers have been pushing short-term products to topple growth charts.
A major part of sales of life insurance companies consist of ULIP policies. Sam Ghosh, MD Bajaj Allianz Life, said, "With the launch of new ULIPs, we have also launched a massive training drive to upgrade the skill of our insurance consultants to become sound advisors, financial planners and guide to customers." Bajaj Allianz Life Insurance has filed for seven new products. While Birla Sun Life is making changes in all of its 11 products. Similarly, ICICI Prudential is replacing close to a dozen schemes.
However, it is to be noted that neither the asset composition nor the method of valuation of the funds will change. The transactional charges incurred while buying assets or selling the funds will be factored in, while calculating the net asset value (NAV). The only likely changes brought about by these charges are a couple of basis points. Some companies are going for changes in the scheme names but some are continuing with the present names.




















1. Market Plus
2. Money Plus


Market Plus
This is a unit linked deferred pension plan. You can take the plan with or without risk cover. You can also choose the level of cover within the limits, which will depend on whether the policy is a Single premium or Regular premium contract and on the level of premium you agree to pay.

The allocated premiums will be applied to purchase units as per the Fund type chosen. Your Unit Account will be subject to deduction of charges as specified in the Policy Conditions. The value of the units in the Unit Fund may increase or decrease, depending on the investment return of the assets representing the chosen Fund.
Payment of Premiums: The minimum annual premium will be Rs.5,000/- increasing thereafter in multiples of Rs.1,000/-.
A Single premium can be paid subject to a minimum of Rs.10,000 and thereafter in multiples of Rs.1,000.
Benefits

Death Benefit: If the Life cover is opted for, the Sum Assured under the Basic Plan together with the Fund Value of units either as a lump sum or as pension. In case the policy is taken without life cover, then the Fund Value of the units held in the Policyholder’s Unit Account shall be payable either as a lump sum or as a pension.

Options
Accident Benefit Option: If you have opted for life cover, you may opt for Accident Benefit equal to life cover subject to minimum Rs. 25,000 and maximum Rs. 50 lakh. In case of death by Accident, an additional sum equal to Accident benefit will be payable.


Eligibility:

Minimum Age at entry : 18 years completed
Maximum Age at entry : 70 years (age nearer birthday). However if
life cover is opted for, then 65 years
Minimum Age at vesting : 40 years (age last birthday)
Maximum Vesting Age : 75 years (age last birthday)
Minimum Deferment Term : 5 years
Minimum Sum Assured : Rs. 25,000 for Single premium
Rs. 50,000 for Regular premium
Maximum Sum Assured : Single Premium - Equal to single premium
Regular Premium - 20 times of the annualized premium
Investment of Funds:The premiums allocated to purchase units will be strictly invested according to the investment pattern committed in various fund types. Various types of fund and their investment pattern will be as under:
Fund Type Investment in Debt Short-term investments
(including Debt) Investment in Listed Equity Shares
Bond Fund Not less than 80% 100% Nil
Secured Fund Not less than 65% Not more than 85% Not less than 15% & not more than 35%
Balanced Fund Not less than 50% Not more than 70% Not less than 30% & not more than 50%
Growth Fund Not less than 20% Not more than 40% Not less than 60% & not more than 80%
The Policyholder has the option to choose any ONE of the above 4 funds. In case no fund has been opted for, the allocated premiums shall, by default, be invested in the SECURED FUND.

Top-up (Additional Premium): The policyholder can pay additional premium in multiples of Rs.1,000 without any limit at anytime during the term of the policy. In case of yearly, half-yearly or quarterly mode of premium payment such Top-up can be paid only if all premiums have been paid under the policy.

Charges:
Units will be allotted based on the Net Asset Value (NAV) of the respective fund as on the date of allotment.

Premium Allocation Charges: This is the percentage of the premium appropriated towards charges from the premium received. The balance known as allocation rate constitutes that part of the premium which is utilized to purchase (Investment) units for the policy. The allocation charges are as below:


For Single premium policies: 3.3%

For Regular premium policies:
Premium Band (per annum) Allocation charge

First Year Thereafter
5,000 to 75,000 16.50% 2.50%
75,001 to 1,50,000 15.75% 2.50%
1,50,001 to 3,00,000 15.00% 2.50%
3,00,001 to 5,00,000 14.25% 2.50%
5,00,001 and above 13.50% 2.50%
Allocation charge for Top-up: 1.25%

Fund Management Charges: This is the charge levied as a percentage of the value of units and shall be appropriated by adjusting NAV at following rates:
Fund Type Charges
Bond Fund 0.75% p.a.
Secured Fund 1.00% p.a.
Balanced Fund 1.25% p.a.
Growth Fund 1.50% p.a.
Switching Charges: This is the charge levied on switching of monies from one fund to another. Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching charge of Rs. 100 per switch.



Money Plus
This is a unit linked Endowment plan which offers investment cum insurance during the term of the policy. You can choose the level of cover within the limits, which will depend on whether the policy is a Single premium or Regular premium contract, term chosen and on the level of premium you agree to pay.
The allocated premiums will be applied to purchase units as per the Fund type chosen. Your Unit Account will be subject to deduction of charges as specified in the Policy Conditions. The value of the units in the Unit Fund may increase or decrease, depending on the investment return of the assets representing the chosen Fund Type.
Payment of Premiums: You may pay premiums regularly at yearly, half-yearly or quarterly intervals over the term of the policy. The minimum annual premium will be Rs.5,000/- increasing thereafter in multiples of Rs.1,000/-. Alternatively, a Single premium can be paid subject to a minimum of Rs.10,000/- and thereafter in multiples of Rs.1,000/-.

Benefits

Death Benefit:
Higher of Sum Assured or the Fund Value of the units held in the Policyholder’s Fund Value shall be available as death benefit.
For the Life Assured of age less than 12 years before the commencement of risk, the Fund Value of units held in the Policyholder’s Fund Value shall be paid in case of death.
Options

Accident Benefit Option:
If you are above 18 years of age, you may opt for Accident Benefit equal to the amount of life cover subject to minimum of Rs. 25,000 and maximum of Rs. 50 lakh (taken all policies with LIC of India and other insurers.) In case of death by Accident, an additional sum equal to Accident Benefit sum assured shall be payable.
Critical Illness Benefit Rider:
If you are between 18 and 50 years of age, you may opt for Critical Illness Benefit equal to the life cover subject to a minimum of Rs. 50,000 and maximum of Rs. 5 lakh (including other policies with LIC of India) provided the policy term is 10 years and above. In case of diagnosis of defined categories of Critical Illness subject to certain terms and conditions, an additional sum equal to the Critical Illness Benefit shall be payable.

Eligibility:
Minimum Age at entry - 0 (age last birthday)
Maximum Age at entry - 65 years (age nearer birthday)
Minimum Maturity Age - 18 years (completed)
Maximum Maturity Age - 75 years (age nearer birthday)
Minimum Policy Term - 5 years
Maximum Policy Term - 20 years
Minimum Premium - Rs.10,000 for Single Premium
Sum Assured under the Basic Plan - Rs.5,000 p.a. for Regular Premium








Regular premium:
Minimum Sum Assured : Higher of 5 times the annualized premium or half of the policy term times the annualized premium.

Maximum Sum Assured : 20 times the annualized premium if age at entry is upto 55 yrs. 10 times the annualized premium if age at entry is 56 yrs and above.

Single Premium :
Minimum Sum assured : 1.25 times the single premium.

Commencement of risk in case of minor:
Risk will commence either after 2 years from the date of commencement of policy or from the policy anniversary coinciding with or immediately following the completion of 7 years of age, whichever is later in case the age at entry of the life assured is less than or equal to 10 years. Where the age at entry is more than 10 years but less than 12 years, the risk shall commence from the policy anniversary coinciding with or next following 12th birthday of the Life Assured. In case of minors aged 12 years or more risk will commence immediately.



Investment of Funds:
T he premiums allocated to purchase units will be strictly invested according to the investment pattern committed in various fund types. Various types of fund and their investment pattern will be as under:
Fund Type Investment in Debt Short-term investments
(including Debt) Investment in Listed Equity Shares Details risk / return
Bond Fund Not less than 80% 100% Nil Low risk
Secured Fund Not less than 65% Not more than 85% Not less than 15% & Not more than 35% Steady Income - Lower to Medium risk
Balanced Fund Not less than 50% Not more than 70% Not less than 30% & Not more than 50% Balanced Income and growth –Medium risk
Growth Fund Not less than 20% Not more than 40% Not less than 60% & Not more than 80% Long term Capital growth – High risk
The Policyholder has the option to choose any ONE of the above 4 funds. In case no fund has been opted for, the allocated premiums shall, by default, be invested in the SECURED FUND.

Partial Withdrawals:
You may encash the units partially after the third policy anniversary subject to the following:
1. In case of minors, partial withdrawals shall be allowed from the policy anniversary coinciding with or next following the date on which the life assured attains majority (i.e. on or after 18th birthday).
2. Partial withdrawals may be in the form of fixed amount or in the form of fixed number of units.
3. For 2 years’ period from the date of withdrawal, the Sum Assured under the Basic plan shall be reduced to the extent of the amount of partial withdrawals made.
4. Under Regular Premium policies where less than 3 years’ premiums have been paid and further premiums are not paid, the partial withdrawals shall not be allowed.
5. Under Regular Premium policies where atleast 3 years’ premiums have been paid, partial withdrawal will be allowed subject to a minimum balance of two annualized premiums in the Policyholder’s Fund Value.
6. Under Single Premium policies, the partial withdrawal will be allowed subject to a minimum balance of Rs. 5,000/- in the Policyholder’s Fund Value.

Charges:
Premium Allocation Charges:

This is the percentage of the premium appropriated towards charges from the premium received. The balance known as allocation rate constitutes that part of the premium which is utilized to purchase (Investment) units for the policy. The allocation charges are as below:


Single premium:

Premium Band Allocation Charge
Up to 4,00,000 4.25%
4,00,001 to 6,00,000 4.00%
6,00,001 and above 3.75%




Regular premium:

Premium Band (per annum) Allocation charge
First year 2nd & 3rd year thereafter
5,000 to 75,000 26.50% 5.00% 2.50%
75,001 to 1,50,000 25.50% 5.00% 2.50%
1,50,001 to 3,00,000 24.00% 5.00% 2.50%
3,00,001 and above 23.00% 5.00% 2.50%





Fund Management Charges: This is the charge levied as a percentage of the value of units and shall be appropriated by adjusting NAV at following rates:

Fund Type Charges
Bond Fund 0.75% p.a.
Secured Fund 1.00% p.a.
Balanced Fund 1.25% p.a.
Growth Fund 1.50% p.a.
Switching Charges: Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching charge of Rs. 100 per switch.































LifeTime Super

As an individual who desires a lot from life-a car, a beautiful home and of course, the comfort and contentment of your family-you would undoubtedly want to plan your finances such that you can take care of all your requirements.

Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable you to meet your long-term financial objectives. In addition, LifeTime Super also provides the protective benefit of an insurance cover, which keeps your family secure, always.

Key Benefits:
• Potentially higher returns over the long term by investing in unit-linked funds.
• Additional allocation of units at regular intervals to boost your investment
• Option to withdraw your money systematically over a period of 5 years on maturity of the policy
• In case of an unfortunate event of death, your family will receive Sum
Assured or Fund Value, whichever if higher.
• Cover continuance option available which ensures continuance of life insurance cover, even if you wish to take a break in premium payment.


Eligibility

Minimum/Maximum Entry Age 0 years to 65 years
Maximum Age at Policy Maturity 75 years
Minimum/Maximum Policy Term 10 years to 75 years
Premium Payment Frequency Monthly, half-yearly, yearly
Minimum Premium Rs. 18,000 per annum
Minimum Sum Assured Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,000

Investment of Funds:
We offer you 6 investment funds. You have the option to choose how you want your investments to grow, based on the objectives of each of the funds. Given alongside are the investment objective and asset allocation of each of the funds:



Riders:



Benefits:

Maturity benefit:
Receive the Fund Value when your policy matures. Choose to take this value as a single lump-sum amount or in monthly, bi-annual or annual installments.

Death benefit:
Your family receives the higher of Fund Value or Sum Assured should something happen to you.


Partial Withdrawal:
Partial withdrawal will be allowed after completion of 3 policy years and on payment of full 3 years premium. The minimum partial withdrawal amount is Rs. 2000.

Cover Continuance Option:
This option ensures that your life insurance cover continues in case you are unable to pay premiums, any time after payment of first three years premium. All applicable charges will be automatically deducted from the units available in your fund. You need to opt forever continuance, if you wish to avail of this benefit.

Additional Allocation of Units:
There will be additional allocation of units every 4th year, starting from the end of the 4th year at the rate of 4% of annual premium into your investment fund. Additional allocation of units will be made only if the premiums have been paid regularly upto the date of allocation.


Charges

Premium Allocation Charges:



Fund Management Charges:
The annual fund management charge, which will be adjusted from the Net Asset Values of various Funds, are as follows:


*These charges will be deducted by cancellation of units

Switching Charges:
4 free switches are allowed every policy year. Subsequent switches will be charged at Rs. 100 per switch.












Capital UnitGain Plan

Capital UnitGain is a unit linked endowment regular premium plan with the benefit of life protection. By choosing an appropriate premium level and term, you can match the maturity date of the plan to a specific savings need such as your child’s education, wedding, your retirement etc. It has unmatched flexibility to meet any emergency or any financial need.

Bajaj Allianz Capital UnitGain gives you up to 97% allocation from the first year onwards to ensure that your investment income gets accelerated from the first year itself.

With Bajaj Allianz Capital UnitGain you get to choose from a wide range of high quality investment funds coupled with flexible investment management. This is the one-stop solution to your investment, tax-saving and protection needs. All you need to do is just invest your money with us and let Bajaj Allianz take care of all your changing needs.


Key Features:

• You can choose any sum assured between minimum and maximum limits to match your insurance needs.
• You have the option to choose from a host of additional rider benefits: UL Accidental Death Benefit, UL Accidental Permanent Total/Partial Disability Benefit, UL Critical Illness Benefit and UL Hospital Cash Benefit
• You can increase your savings by paying top up premiums.
• You get the same premium allocation for all policy years with higher allocation for topup premiums.
• You can adopt your own investment strategy to grow the funds under your policy .
• Choice of 5 investment funds with flexible investment management, you can change funds at any time and also invest in the newer funds that would be introduced from time to time.
• You can make partial withdrawals without any surrender charge .
• Flexibility to increase/decrease the regular premiums

How does the Plan work?

Premiums paid are allocated, net of premium allocation charge, to the unit account created under your policy. The regular premiums payable in the first year will be used to allocate Capital Units and the regular premiums payable thereafter will be used to allocate Accumulation Units. The top up premiums will also be allocated to Accumulation Units, after deducting premium allocation charge, but such units will be maintained separately. The allocated premiums are invested in the fund(s) of your choice and units are allocated to your policy account at the unit price applicable to each of the selected fund(s). The Initial Management Charge, Mortality Charge, Rider Premium Charge and Policy Administration Charge are deducted monthly through cancellation of units . Initial Management Charge is recovered from Capital Units and the other charges are recovered from Accumulations Units. The Fund Management Charge is adjusted in the unit price . The fund value of your policy is the number of units multiplied by their respective unit price. The fund value in respect of regular premiums and in respect of top up premiums are maintained separately under your policy.

Additional Rider Benefits:
You have the option to add the following additional rider benefits, providing total protection against uncertainties. The charges on these additional rider benefits would be adjusted by cancellation of units.
• UL Accidental Death Benefit (UL ADB)
• UL Accidental Permanent Total /Partial Disability Benefit (UL TPD)
• UL Critical Illness Benefit (UL CI)
• UL Hospital Cash Benefit (UL HC)

Eligibility:

Minimum Maximum
Age at Entry 0 Yrs (Risk commences at age 7 60 Yrs
Term 10 Yrs 70 Yrs less age at entry
Age at Entry 18 Yrs 50 Yrs
(for Additional Rider Benefits)
Age at Maturity 18 Yrs 70 Yrs
Minimum Premium Rs 10000 for Yearly, Rs. 1000 for Monthly and Rs. 5000 for Top Ups
(Monthly mode is available through ECS and Salary Saving Scheme only)
Additional Rider Benefits are available till the age of 65 yrs


Benefits:

Death Benefit:
• On death before the age of 7 years : The benefit payable would be the fund value in respect of regular premiums as well as fund value in respect of top up premiums as on the date of receipt of intimation of death at the office.
• On death after the age of 7 years and before the age of 60 years: The benefit payable would be the sum sssured less value of partial withdrawals made from the Accumulation Units in the last 24 months prior to the date of death or the fund value as on the date of receipt of intimation of death at the Company’s office, whichever is higher. The death benefit payable would be calculated separately for regular premiums and top up premiums.
• On death of the life assured on or after attaining the age of 60 years: The benefit payable would be the sum assured less value of partial withdrawals made from Accumulation Units, within 24 months before attaining age 60 years and all partial withdrawals made from Accumulation Units after attaining age 60 years or the fund value as on the date of receipt of intimation of death at the office, whichever is higher. The death benefit would be calculated separately for regular premiums and top up premiums.
• If three years regular premium has not been paid and the policy has lapsed, existing fund value will be paid on death of the life assured

Premium Apportionment:
You can apportion the premium among various investment funds available. The apportionment to any fund must be at least 5% of the investible amount. At any policy anniversary, you also have the flexibility to change the apportionment of future premiums to the funds. The maximum allocation to Liquid fund will not exceed 20% of the allocated premium.

Investment of Funds:
Bajaj Allianz Capital UnitGain offers you a choice of 5 funds. You can choose to invest fully in any one fund or allocate your premiums into the various funds in a proportion that suits your investment needs.

The five funds offered are as under:

Fund Type Investment in Equity Investment in Debt Investment in Money Market Instruments Risk
Liquid Fund 100% Low
(Not More than 20% can be put in this fund)
Bond Fund 60%-100% 0-40% Moderate
Equity Growth Fund 60%-100% 0-40% Very High
( Investment in selected Euity Stocks)
Equity Index Fund II 60%-100% 0-40% High
(Investment in NSE Nifty)
Accelerator Mid Cap Fund 60%-100% 0-40% Very High
(Investment in Mid Cap and Large Cap Fund)
Minimum 50% of Equity Investments would be in Mid Cap stocks
Top Up Premiums:
You shall have the option to pay unlimited top up premium at any time provided all due regular premiums have been paid. At the time of making any payment of top up premium, you may in writing choose the level of top up sum assured, which is between 1.25 times to 5 times of the top up premium paid. Provided top up premiums paid or proposed to be paid does not exceed 25% of the regular premium paid till date, in which case, the top up sum assured might be between 1.25 times and 5 times The minimum top up premium payable is Rs. 5,000,


Charges:

Premium Allocation Charges:

The premium allocation charge for top up premiums is 2%.

Fund Management Charges:

The Fund Management Charge is charged on a daily basis and adjusted in the unit price.

Fund Type Charges
Equity Growth Fund 1.75% p.a.
Accelerator MidCap Fund 1.75% p.a.
Equity Index Fund II 1.25% p.a.
Bond Fund 0.95% p.a.
Liquid Fund 0.95% p.a.


Initial Management Charges:
5% p.a. of the Capital Units during the policy term subject to a maximum of 20 years. This charge will be recovered by cancellation of Capital Units at monthly intervals.

Switching Charges:
Depending on the performance of funds, you can switch Accumulation Units between Funds with three free switches every policy year, subject to a minimum switching amount of Rs. 5,000 or the value of Accumulation Units, whichever is lower. Switching should not lead to more than 25% of the total fund value in Liquid fund.




New UnitGain Plus


The thumb rule for buying insurance is that your insurance needs are minimal in your early earning years, increase with added responsibilities (Marriage, children, loans etc.) and taper off by the time you retire. It is difficult to find a single insurance plan that can take care of all your changing requirements in life – additional protection, more money to invest, sudden requirement of cash or a steady post-retirement income.

With Bajaj Allianz New UnitGain Plus, you can invest in one life insurance plan that can take care of all your changing requirements throughout your life. This plan has been designed to provide you with maximum flexibility, so that you do not have to worry about your changing needs.

Bajaj Allianz New UnitGain Plus offers the unique option of combining the protection of life insurance with the attractive prospects of investing in securities. You can choose the investment funds you want to invest your money, providing you with an opportunity to have a direct stake in the performance of the financial markets. You also benefit from attractive tax advantages and can protect your loved ones against unfortunate events.

The Bajaj Allianz New UnitGain Plus comes with a host of features to allow you to have the best of all worlds –Protection and Investment with flexibility like never before.

Some of the key features of this plan are:
• Guaranteed death benefit
• Choice of 5 investment funds with flexible investment management: you can change funds at any time.
• Attractive investment alternative to fixed-interest securities
• Provision for full/partial withdrawals any time after three years from commencement of the policy provided three full years’ premiums are paid.
• Unmatched flexibility –to match your changing needs.
• Maturity Benefit equal to the Fund Value payable on date of maturity.

How does the plan work?
The premiums allocated are invested in a fund/funds of your choice (depending on the allocation rate) & units are allocated depending on the price of units for the fund/funds. The value of your policy is the total value of units that you hold in the fund/funds. The insurance cover charges, policy administration charges and the additional rider benefit charges are deducted through monthly cancellation of units. Fund Management Charge is priced in the unit value.






Eligibility:


UL MahilaGain I and II Benefits are available till the age of 45 yrs and 55 yrs respectively, All other benefits are available till the age of 65 yrs

Benefits

• On death before the age of 7 years: The death benefit will be the NAV of the units in the policyholder’s account (Fund Value) as on the date of receipt of intimation of death at the office. The policy terminates on the death of the life assured.

• On death after the age of 7 years and before the age of 60 years: The death benefit will be the higher of the sum assured less the value of the units withdrawn by partial withdrawals in the last 24 months prior to the date of death or the NAV of the units in the policyholder’s account (Fund value) as on the date of receipt of intimation of death at the office.

• On death of the life assured on or after attaining the age of 60 years: In this case , all partial withdrawals made within two years before attaining age 60 years and all the withdrawals made after attaining age 60 years will be set-off against the Sum Assured payable on death.

Premium Apportionment:
The policyholder may at any policy anniversary change the apportionment percentage of his/her premium to the Fund he/she wishes to invest.

The premium apportionment to any Fund in which the policyholder wishes to invest must be at least 5% of the premium. The company will reserve the right to revise the minimum apportionment percentages upon giving written notice of not less than three months subject to obtaining clearance from the IRDA.
Investment of Funds:
Bajaj Allianz offers you a choice of 5 funds. You can choose to invest fully in any one fund or allocate your premiums into the various funds in a proportion that suits your investment needs.

The five funds offered are as under:


Fund Type Investment in Equity Investment in Debt Investment in Money Market Instruments Risk
Liquid Fund 100% Low
(Not More than 20% can be put in this fund)
Bond Fund 80%-100% 0-20% Moderate
Equity Growth Fund 80%-100% 0-20% Very High
( Investment in selected Euity Stocks)
Equity Index Fund II 85%-100% 0-15% High
(Investment in NSE Nifty)
Accelerator Mid Cap Fund 80%-100% 0-20% Very High
(Investment in Mid Cap and Large Cap Fund)


We allow you three free switches every policy year subject to a minimum switching amount of Rs. 5000 or the fund value, whichever is lower. You can also change the proportion of premium allocation to various funds at each policy anniversary.

Increasing the Sum Assured:
You have the option to increase the Sum Assured without any medical tests every 3rd year upto 4 times. The quantum of increase would be 25% of the original sum assured or Rs. 1,00,000/- whichever is lower. If you do not exercise an option when it is due, it cannot be carried forward. This benefit will be available after age 18 and upto age 45. If the age is less than 18 at the start of the policy, all 4 increments will be available from age 18. Apart from exercising the options to increase the Sum Assured without medical tests, you can increase the Sum Assured anytime, subject to medical underwriting (available upto age 60). In either case, the sum assured after increase must be equal to or less than the maximum sum assured available for the premium level chosen.




Top Up Premium:
You may have received a bonus or some lump sum money. You can use that to increase your investments in your policy. At any point of time total top up premiums would not exceed 25% of the total regular premiums paid till that time and therefore payment of top up premiums would not result in increase in sum assured. Top Up premium can be accepted provided the regular premium has been paid.

Riders
You have the option to add the following five additional rider benefits, providing total protection against uncertainties. The charges on these additional rider benefits would be adjusted by cancellation of units.
• UL Accidental Death Benefit (UL ADB)
• UL Accidental Permanent Total/Partial Disability Benefit (UL TPD)
• UL Critical Illness Benefit (UL CI)
• UL Hospital Cash Benefit (UL HC)
• UL Mahila Gain (UL MG)


Partial and Full Withdrawals
New UnitGain Plus offers you the full flexibility of full as well as partial withdrawals by surrendering units, anytime after 3 years from commencement, provided three full year premiums are paid. The surrenders are paid out at the NAV of units, and there is no surrender charge on partial or full withdrawals after three years

Charges

Premium Allocation Charges:
A portion of the premium paid will be charged towards expenses in the initial years. Accordingly, the allocation to your fund will be 76% in year 1, 97% from year 2 onwards. Top ups are allocated with 98%.

Fund Management Charges:
Annual investment charge would be charged on net assets and would be as follows: Equity Growth Fund & Accelerator Mid-Cap Fund 1.75% p.a., Equity Index Fund II 1.25% p.a., Bond Fund 0.95% p.a., Liquid Fund 0.95% p.a charged on a daily basis.

Switching Charges:
Three free switches would be allowed every year. Subsequent switches would be charged @ 5% of switch amount or Rs. 100, whichever is lower.





Horizon- II

SBI Life’s HORIZON II is a unique, non participating Unit Linked Insurance Plan in Indian Insurance Industry, where you need not to be a financial market expert. This plan offers the flexibility of Unit Linked Plan along with Automatic Asset Allocation which provides relatively higher returns on your money where as increasing death benefits provides higher security to your family.
Unique Features:
 Automatic Asset Allocation : HORIZON II comes with the unique feature of Automatic Asset Allocation by means of which you truly, don’t need to be an expert to grow your money! HORIZON II as a concept is formulated in association with our partner Cardif SA of France who has rich expertise in the arena of Unit Linked Plans. This expertise has been customized for India to make sure that you get the maximum from your investments. HORIZON II is a non participating plan.
 Increasing Death Benefit: For all in-force policies, in case of death after completion of age 7 your nominee will receive Fund Value + Sum Assured otherwise Fund Value is payable.
Key Features:
• Twin benefit of insurance cover and market linked returns
• Hassle-free investment management of funds from inception to maturity
• Automatic Asset Allocation of funds
• Automatic rebalancing of funds at yearly intervals, free of cost
• Higher protection, to meet your family financial needs.
• Automatic cover continuance
• Facility to top up your investment kitty
• Liquidity option after 3 years
• Tax benefit as per section 80C and 10(10D) of Income Tax Act


Eligibility:

Age at Entry Maximum Age at Maturity
Minimum Maximum
0 60 yrs 70 yrs


Investment of Funds:

Plan A: Dynamic Plan:
Here, a higher proportion of your money is invested in equity. It is ideal for longer period of terms. The minimum/maximum percentage of investments that are invested in the different funds, depending on the investment term is given below:


Plan B: Growth Plan:
Here, the investment in equity automatically decreases more rapidly as the funds are put into less risky options. This leads to a more balanced approach, hence lower volatility coupled with good returns in long run.


The plan which you choose will determine the investment pattern for the 3 funds. No switch is allowed between 2 Plans within the term.

Money invested in different funds:

There are 3 funds in investment: Equity Fund, Bond Fund and Money Market Fund.

1) Equity Fund: For long term capital appreciation.



2) Bond Fund: For generating good returns by taking calculated risk.



3) Money Market Fund: For cutting the risk while reaching maturity.



Automatic Asset Allocation:
The feature that makes this plan unique is the Automatic Asset Allocation. This feature works such that at the end of every policy year, based on the no. of years left for maturity and Plan chosen, SBI Life automatically reallocates your investments as per the allocation percentages.



As can be seen from the graph above, Automatic Asset Allocation helps to switch progressively from riskier assets (Equity) to safer assets (Bond and Money Market) as maturity approaches. This is done free of cost.


Benefits

Increasing Death Benefit:
For all inforced policies, In case of death after completion of age 7 your nominee will receive Fund Value + Sum Assured otherwise Fund Value is payable.


Partial Withdrawal:
• For all inforce policies, allowed anytime from the 4th policy year onwards / 18 years of age of the life assured, whichever is later.
• First two withdrawals in a policy year will be free of charge. A fee of 1% will be deducted from the third and subsequent withdrawal amounts.
• There is no carry forward of unused partial withdrawal facility.
• Minimum Partial Withdrawal amount: Rs. 10,000/- and in multiples of Rs. 1,000/- thereafter
• The maximum Partial Withdrawal amount is equal to Fund Value less (125% Annualised Premium amount + cumulative nominal Top Up amount received in the last 36 calender months).
• If the Fund Value falls below Rs. 10,000/- at the time of deduction of the charges, the policy will immediately terminate and the Fund Value without deduction of any charges will be paid to the policyholder and all rights and benefits under policy will automatically cease.

Top Up Premium:
Any surplus funds you may be having can be invested as a Top Up premium at any point of time. Minimum Top Up amount is Rs. 1,000 (x100). Cumulative top-ups during the term of the policy cannot exceed 25% of the total amount of basic regular premiums paid as at the date of payment of top-up. Top Up premium is accepted only if there is no unpaid premium.


Charges

Premium Allocation Charges:




Fund Management Charges:
The annual fund management charges for each fund are as follows:

Fund Type Charges
Equity Fund 1.50%
Bond Fund 1.00%
Money Market Fund 0.25%


Partial Withdrawal Charges:
First two withdrawals in a policy year will be free of charge. A fee of 1% will be deducted from the third and subsequent withdrawal amounts.
















HDFC UNIT LINKED ENDOWMENT PLUS

Invest in financial security and self-respect for you and your family.
You have given your family the very best and there is no reason why they should not get the very best in the future too. With HDFC Unit Linked Endowment Plus, you can ensure that your family remains financially independent, even if you are not around. You can ensure that they live a life of respect and dignity. Always.
Key Benefits:
• An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments
• Regular Loyalty Units to boost your fund value every year
• Valuable protection to your family in case you are not around
• Flexible benefit combinations and payment options
• Flexible additional benefit options such as critical illness cover
• Access to your accumulated fund before maturity
You can choose your premium and the investment fund or funds. We will then invest your premium, net of premium allocation charges in your chosen funds in the proportion you specify. At the end of the policy term, you will receive the accumulated value of your funds.
In case of your unfortunate demise during the policy term, we will pay the greater of your Sum Assured (less any withdrawals you have made in the two years before your claim) and your total fund value to your family.
Use HDFC Standard Life's excellent investment options to maximise your savings & secure your and your family's future. We will provide financial security for your family in your absence.

Eligibility:

Benefit Options Term Period (Yrs) Age At Entry (Yrs) Maximum Age At Maturity (Yrs)
Minimum Maximum Minimum Maximum
Life Option 10 30 18 65 75
Extra Life Option 10 30 18 55 70
Life and Health Option 10 30 18 55 65
Extra Life and Health Option 10 30 18 55 65


Regular Premium:
This is the premium you will continue to pay each year of the policy. The minimum regular premium is Rs. 10,000/- per year.

You may also choose to pay adhoc Single Premium Top-Up or additional regular premiums depending on your convenience.

Level of Protection:
You can choose any amount of Sum Assured with:

• A minimum of (Term of your policy/2) times your chosen annual regular premium.
• Maximum of 40 times your chosen annual regular premium.

Additional Plan Benefits:
We offer a range of valuable protection options to secure the future for your family. You can choose any one of the following benefit options:

Life Option Death Benefit
Extra Life Option Death Benefit + Accidental Death Benefit
Life & Health Option Death Benefit + Critical Illness Benefit
Extra Life & Health Option Death Benefit + Critical Illness Benefit + Accidental Death Benefit


Benefit Types Summary
Death Benefit Greater of Sum Assured (less any withdrawals made in th two years before claim) and Fund Value will be paid. The policy will terminate
Critical Illness Benefit Greater of Sum Assured (less any withdrawals made in th two years before claim) and Fund Value will be paid. The policy will terminate
Accidental Death Benefit In addition to the Death Benefits, further sum assured will be paid.
The policy will terminate
Investment of Funds:
We have 6 funds that gives:

• The potential for higher but more variable returns over the term of your policy; or

• More stable returns with lower long-term potential.


Fund Type Investment in Equity Investment in Money Market Instruments Investment in Debt Risk
Liquid Fund 100% Low
Secure Managed Fund 100% Low Moderate
Defensive Managed Fund 15%-30% 70%-85% Moderate
Balanced Managed Fund 30%-60% 40%-70% High
Equity Managed Fund 60%-100% 0-40% Very High
Growth Fund 100% Very High


Benefits

Loyalty Units:
At the end of every policy year we will increase the number of units in each of your funds by 0.10% as long as your policy is in force or paid-up.

The compounding effect of these regular additions is expected to boost your final maturity value.

Single Premium Top-Up:
You can invest more than your regular premiums at any time, subject to the following conditions:
• You have paid all regular premiums to date
• Your total Single Premium Top-Ups at any time is not more than 25% of your regular premiums paid to date
• Each Single Premium Top-Up amount is atleast Rs. 5,000

Surrender or Partial Withdrawal

In the first three years
For first three years of the plan, one may not surrender the plan or withdraw any portion of funds from it.

If one stops regular premium commitment before three years have passed, life cover will cease and funds will be held in suspense after deduction of surrender charges. These funds will be paid out only at the end of the third year or the end of the revival period of 2yrs, whichever is later.

From fourth year onwards
• The minimum withdrawal amount is Rs. 10,000/-
• After the withdrawal, the fund does not fall below your original annual regular premium amount
• After withdrawal, the fund does not fall below the sum of single premium top-ups paid to date


Charges

Premium Allocation Charges:
After deducting this charge from premiums, the remainder is invested to buy units.
The table shows how percentage of premium is used to buy units.

Premium Paid During Year (Rs.) Allocation Rate
1st Year 2nd Year Onwards
Regular Premiums Upto 1,99,999 40% 99%
From 2,00,000 - 4,99,999 60% 99%
From 5,00,000 - 9,99,999 70% 99%
From 10,00,000 - 19,99,999 80% 99%
From 20,00,000 and above 90% 99%
Single Premium Top-Up(s) 97.50% 99%


Fund Management Charges:
The daily unit price already includes low fund management charge of only 0.80% per annum of the fund’s value.

Switching Charges:
24 switches will be given free in a policy year and any additional switch will be charged Rs. 100 per switch.









HDFC UNIT LINKED YOUNG STAR PLUS

Invest in your child’s dreams, and secure your self-respect.
As a parent, your priority is your children's future and being able to meet their dreams and aspirations. Today, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are rising fast. Just imagine how much you will need when your children take these important steps in life.
Plan today to ensure a bright future for your children. Start saving today with our HDFC Unit Linked Young Star Plus so that your child is able to lead a life of respect and dignity with a secured financial future.
Key Benefits:
• An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments
• Regular Loyalty Units to boost your fund value every year
• Valuable protection to your child in case you are not around
• Flexible benefit combinations and payment options
• Flexible additional benefit options such as critical illness cover
• Access to your accumulated fund before maturity
You can choose your premium and the investment fund or funds. We will then invest your premium, net of premium allocation charges in your chosen funds in the proportion you specify. At the end of the policy term, you will receive the accumulated value of your funds.
In case of your unfortunate demise during the policy term, we will:

• Pay the Sum Assured you had chosen to your child
• Continue your policy AND continue to pay the original regular premiums you had chosen
This means we will continue to make your savings on your behalf, in your absence. The fund will be available for your family's use until the original Maturity Date.
Use HDFC Standard Life's excellent investment options to maximise your savings & maximise your child's achievements.
We will provide financial security for your child.

Eligibility:

Benefit Options Term Period (Yrs) Age At Entry (Yrs) Maximum Age At Maturity (Yrs)
Minimum Maximum Minimum Maximum
Life Option 10 25 18 65 75
Life and Health Option 10 25 18 55 65

Regular Premium:
This is the premium you will continue to pay each year of the policy. The minimum regular premium is Rs. 10,000/- per year.

You may also choose to pay adhoc Single Premium Top-Up or additional regular premiums depending on your convenience.

Level of Protection:
You can choose any amount of Sum Assured with:

• A minimum of 5 times your chosen annual regular premium.
• Maximum of 40 times your chosen annual regular premium.

Additional Plan Benefits:
We offer a range of valuable protection options to secure the future for your family. You can choose any one of the following benefit options:

Life Option Death Benefit
Life & Health Option Death Benefit + Critical Illness Benefit


Benefit Types Summary
Death Benefit • Sum Assured will be paid to beneficiary
• Family need not pay any further premiums, we will pay future regular premiums on your behalf
• Any Critical Illness Cover terminates immediately
Critical Illness Benefit • Sum Assured will be paid to beneficiary
• Family need not pay any further premiums, we will pay future regular premiums on your behalf
• Any Death Benefit Cover terminates immediately
Investment of Funds:

We have 6 funds that gives:

• The potential for higher but more variable returns over the term of your policy; or

• More stable returns with lower long-term potential.


Fund Type Investment in Equity Investment in Money Market Instruments Investment in Debt Risk
Liquid Fund 100% Low
Secure Managed Fund 100% Low Moderate
Defensive Managed Fund 15%-30% 70%-85% Moderate
Balanced Managed Fund 30%-60% 40%-70% High
Equity Managed Fund 60%-100% 0-40% Very High
Growth Fund 100% Very High


Benefits

Loyalty Units:
At the end of every policy year we will increase the number of units in each of your funds by 0.10% as long as your policy is in force or paid-up.

The compounding effect of these regular additions is expected to boost your final maturity value.


Single Premium Top-Up:
You can invest more than your regular premiums at any time, subject to the following conditions:
• You have paid all regular premiums to date
• Your total Single Premium Top-Ups at any time is not more than 25% of your regular premiums paid to date
• Each Single Premium Top-Up amount is atleast Rs. 5,000





Surrender or Partial Withdrawal:

In the first three years
For first three years of the plan, one may not surrender the plan or withdraw any portion of funds from it.

If one stops regular premium commitment before three years have passed, life cover will cease and funds will be held in suspense after deduction of surrender charges. These funds will be paid out only at the end of the third year or the end of the revival period of 2yrs, whichever is later.

From fourth year onwards
• The minimum withdrawal amount is Rs. 10,000/-
• After the withdrawal, the fund does not fall below your original annual regular premium amount.
• After withdrawal, the fund does not fall below the sum of top-up premiums paid in three years before the maturity date.


Charges

Premium Allocation Charges:
After deducting this charge from premiums, the remainder is invested to buy units.
The table shows how percentage of premium is used to buy units.

Premium Paid During Year (Rs.) Allocation Rate
1st Year 2nd Year Onwards
Regular Premiums Upto 1,99,999 40% 99%
From 2,00,000 – 4,99,999 60% 99%
From 5,00,000 – 9,99,999 70% 99%
From 10,00,000 - 19,99,999 80% 99%
From 20,00,000 and above 90% 99%
Single Premium Top-Up(s) 97.50% 99%


Fund Management Charges:
The daily unit price already includes low fund management charge of only 0.80% per annum of the fund’s value.

Switching Charges:
24 switches will be given free in a policy year and any additional switch will be charged Rs. 100 per switch.






Reliance Market Return Plan
With Reliance Market Return plan you can have the twin advantage of insurance protection as well as reaping the benefits of investment growth. It is a flexible plan which works all through your life and meets the changing requirements like additional protection, liquidity through cash, option to invest in different asset class, steady golden years and many more.
Key Features:
• Twin benefit of market linked return and insurance protection
• A Unit Linked Plan, different form traditional Life Insurance products, with maximum maturity age of 80 years
• Option to create your own portfolio depending on your risk appetite
• Choose from 4 different investment funds
• Flexibility to switch between funds
• Option to pay regular as well as single premium & Top-ups
• Option to package with Accidental riders
• Flexibility to increase the Sum Assured
• Liquidity through partial withdrawals
How does this Plan work?
The premium made net of Premium Allocation Charges by you is invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds.
The value of your Unit Account is the total value of units that you hold in the fund/funds. The Mortality Charges and Policy Administration Charges are deducted through cancellation of units whereas the Fund Management Charge is priced in the unit value.
Benefits

Life Cover Benefit: You can choose the basic Sum Assured within the minimum and maximum levels mentioned below
Minimum Sum Assured:
• Regular Premium: Annualized Premium for 5 years or for half the Policy term
• Single Premium: 125% of the single premium
Maximum Sum Assured: No Limit (Rs 500,000 for age up to 12 years)
In case of unfortunate loss of life, your Beneficiary will get sum Assured or Unit Account Value whichever is higher.
Maturity Benefit: On survival, at maturity the value of your Unit Account will be paid out.
Rider Benefit: You can add the Accidental Death & Accidental Total and Permanent Disablement Benefit Rider (available only with regular premium option).
This benefit doubles the life coverage in case of accidental death or accidental total and permanent disablement at a very nominal additional cost. The maximum cover is Rs. 50,00,000 per life.
In case of accidental total and permanent disablement, 1/10th of the Sum Assured will be paid at the end of each year for ten years. If the total and permanent disablement has commenced, the Accidental Death Benefit Cover ceases.
In case of maturity or on death of the Assured, after payment of installments of Accidental Total and Permanent Disablement Benefit, the remaining unpaid installments if any will be paid in one lump sum.
Accidental total and permanent disablement means disability caused by bodily injury, which causes permanent inability to perform any occupation or to engage in any activities for remuneration or profits. This disability should last for at least 6 months before being eligible for Accidental Total and Permanent Disablement Benefits.
Total and permanent disablement includes loss of both arms or both legs or one arm and one leg or of both eyes. Loss of arms or legs means dismemberment by amputation of the entire hand or foot. Loss of eyes means entire and irrecoverable loss of sight.
Investment of funds:
Reliance Life Insurance understands the value of your hard earned money and in our endeavour to help you grow your wealth, we offer you 4 different tailor-made investment funds. You have the option to allocate your premium in these funds as you wish.
Fund Type Fixed Interest Securities Bank Deposits and Debt Equity Risk
Capital Secure Fund 100% Low
Balanced Fund 80% - 100% 0 - 20% Medium Low
Growth Fund 60% - 100% 0 - 40% Medium High
Equity Fund 0 - 30% 70% - 100% High
*Further, allocation in Capital Secure Funds for a policy is a subject to a maximum limit of 20% at any time.
Top-Up Premium:
If you have received a bonus or some lumpsum money you can use that as a top-up to increase the investments component in your Policy. Top-ups are allowed only if all premiums due till date are paid.
There is no restriction on the maximum amount of top-ups. However top-ups made over and above 25% of the basic regular premium paid till date will lead to an increase in Sum Assured to the extent of 125% of the excess top up premiums. The minimum top-up amount is Rs. 2,500. 98% of any amount paid as top-up is allocated to your funds.
Partial withdrawals:
After three years
• If your Unit Account Value is less than the Sum Assured, then the maximum partial withdrawal can be Rs 5,000 per partial withdrawal.
• If your Unit Account Value is more than the Sum Assured, then the maximum partial withdrawal is the difference between the Unit Account Value and the Sum Assured plus Rs 5000.
• Higher amounts of partial withdrawals are allowed subject to underwriting.
• Two partial withdrawals are allowed every year. Minimum Fund Value after each partial withdrawal should be Rs 10,000.
• For the purpose of partial withdrawals, top-ups would have a lock-in of three years from the date the top-ups are made until then no partial withdrawals are allowed. This condition is not applicable if the top-ups premiums are paid during the last three years of the Policy term.
• Where the Life Assured is minor, - partial withdrawals are allowed on or after attainment of age 18 years or after 3 years if later.
Eligibility:
Policy Term Age at Entry Maximum Age at Maturity
Minimum Maximum Minimum Maximum
5 yrs 40 yrs 30 days 65 yrs 80 yrs
Minimum Premium:
Annual Rs. 10,000
Half-yearly Rs. 5,000
Quarterly Rs. 2,500
Monthly Rs. 1,000
Single premium Minimum Premium is Rs. 25,000
Charges
Premium Allocation Charges:
For regular premium policies:
Term of the Policy
Year 5-9 10-14 15+
First Year 10% 15% 20%
Thereafter 5% 5% 5%
The Premium Allocation Charge for single premium & top-ups is 2%.
Fund Management Charges:
Unit Linked Funds Annual Rate*
Capital Secure 1.50%
Balanced 1.50%
Growth 1.75%
Equity 1.75%
*The Fund Management Charges will be deducted on a daily basis.

Partial Withdrawal Charges:
Rs 100 per withdrawal will be deducted from your Unit Account.

Switching Charges:
One free switch in a policy year. Subsequent switch will be charged as, 1% of the amount switched, with a maximum of Rs.1,000/-.





Reliance Automatic Investment Plan
Key benefits:
• A smart plan which adapts to your changing risk profile with increasing age
• Option to lower the average cost of units through systematic transfer of your funds
• Flexibility to switch between funds and plans
• Options for additional Insurance cover available through riders
Key Features:
• Two plan options to choose from Ready-made and Tailor-made
• Life Stage asset allocation to ensure automatic change in investment patterns, under the Ready-made Plan option
• Freedom to decide your own fund mix based on your risk profile under the Tailor-made Plan
• Regular, limited, single premium paying options
• Unmatched flexibility through our ‘Exchange Option’
• Liquidity in the form of partial withdrawal
• Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability and Term Insurance riders
How does this Plan work?
As a customer you will have the liberty to choose between the Ready-made and Tailor-made Plan options. The premium contributions made by you, net of Premium Allocation Charges and Sum Assured Related Charges are invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds.
Eligibility:
Basic Plan Minimum Maximum
Age at Entry 30 days 65 years last birthday
Age at Maturity 18 years last birthday 80 years last birthday
Premium Paying Term 5 years 30 years
Min Sum Assured Regular / Limited Premium: Annualised Premium for 5 years or Annualised Premium for half of the policy term, whichever higher
Single Premium 125% of the single premium amount
Max Sum Assured No Limit

Benefits
Life Cover Benefit:
On death before 12th birthday: Death Benefit will be the Fund Value relating to Basic Policy as on the date of receipt of intimation of death.
On death after 12th birthday but before 60th birthday: Death Benefit will be higher of Sum Assured less all Partial Withdrawals made from the Basic Policy fund in the last 24 months prior to date of death and Fund Value relating to Basic Policy as on the date of receipt of intimation of death.
On death on or after 60th birthday: Death Benefit will be higher of Sum assured less all Partial Withdrawals made from the Basic Policy Fund within 24 months before 60th birthday and all the withdrawals made from the Basic Policy Fund after 60th birthday and the Fund Value relating to the Base Policy as on date of receipt of intimation of death.
The Fund Value relating to the top ups will also be paid in each of the above cases. The Policy terminates on payment of Death Benefit.

Minimum and Maximum Sum Assured:
Minimum Sum Assured for the Regular/Limited Premium Policies: Annualised Premium for 5 years or Annualised Premium for half the Policy Term, whichever is higher.
Minimum Sum Assured for Single Premium Policies: For Single Premium Option, the minimum Sum Assured is 12.5% of the Single Premium amount.
Maximum Sum Assured: No Limit







Investment of Funds:
a) Readymade Fund Option i.e Life Stage Based Asset Allocation:
Under this option there will be three funds namely, Fund A, Fund B and Fund C for the age bands 0 to 40, 41 to 60 and over 61 years as at last birthday respectively.







b) Tailor-made Fund Option:
Under this option you have the full freedom to decide your fund mix, Money Market, Corporate Bond, Gilt and Equity Funds. The maximum allocation towards Money Market cannot exceed 40% of the premium contribution at any point in time. All the funds are available irrespective of attained age.


Top-Ups Premium:
If you have received a bonus or some lump sum money you can use that as a top-up to increase the investments component in your policy. Top-ups can be accepted only where the due basic regular/limited premiums are paid up to date. The total top-up premiums at any point in time will not exceed 25% of the total regular/limited premiums paid till that time. The minimum top-up premium at ny time is Rs. 2500. Payment of top-ups would not result in increase in Sum Assured. In case of Single Premium Policies top-up premiums at any point in time will not exceed 25% of the Single Premium paid.
Rider Benefit:
You can add the Accidental Death Benefit & Accidental Total and Permanent Disability Benefit rider and Term Life Insurance Benefit rider. The details about the optional benefits are mentioned below. The rider benefit is available only with Regular and Limited Premium Payment Policies. For limited premium policies the Rider Benefits available during the Premium Paying Term only.
Benefit Illustration:
To enable a better understanding on how the plan works, please refer to the below table for Regular Premium.

Age of the customer 30 35 40 45
Annual Premium Paid 25,000 25,000 25,000 25,000
Policy Term 15 15 15 15
Premium Paying Term 15 15 15 15
Sum Assured 1,87,500 1,87,500 1,87,500 1,87,500
Maturity Values:
at 6% investment return
at 10% investment return 4,95,104
6,94,534 4,94,413
6,93,530 4,93,017
6,91,444 4,90,506
6,87,755

Minimum Premium:
Yearly Half Yearly Quarterly Monthly
Regular Premium option Rs 10,000 Rs 5,000 Rs 2,500 Rs 1,000
Limited Premium Rs 20,000 Rs 10,000 Rs 5,000 Rs 2,000
Single Premium Rs 25,000
Min Top Up amount Rs 2,500





Charges

Premium Allocation Charges:



Premium Allocation Charges for the 2nd and subsequent years will be 5% irrespective of Annualised Regular/ Limited Premium

Premium Allocation Charge for Single Premium Policies and top-ups is 2%

Fund Management Charges:

Ready Made Plan


Tailor Made Plan


Switching Charges:
52 switches in a policy year are free. There will be a fixed charge of Rs. 100 per switch on each subsequent switch.













Life Invest Unit Linked Investment Plan

This plan is designed keeping in mind that different individuals have different needs, which change over time. We build many dreams and aspirations and long to see them come true, sometime in our life. To make them come true, your need for protection, investment, and financial liquidity keeps changing at different stages of life. When you reach a certain stage in life, you need your money to grow and see new heights. This plan helps you meet all your investment and insurance needs and gives you an opportunity to invest your money where it grows much faster than you expenses.


Unique Features:
• Option to choose the death benefit option from Level or Increasing.
• Option to change the death benefit option at a later stage from Increasing to level.


KEY BENEFITS:

Protection
This policy provides you comprehensive protection from –

Death
Disease
Disability

Protection against Death: You can choose from either an INCREASING Death Benefit or a LEVEL Death Benefit

INCREASING Death Benefit = Sum Assured + Fund Value


LEVEL Death Benefit = Higher of (Sum Assured or Fund Value)

Under both the options if the life insured dies before attaining age 10 years, we will only pay the fund value of your policy.

Protection against Disease: Our Dread Disease rider provides you a lump sum payment in case you contract any of the ten Dread Diseases viz. Heart Attack, Cancer, Stroke, CABG, Multiple Sclerosis, Kidney Failure, Major Organ Transplant, Paralysis, COMA and Heart Valve replacement/repair.

Protection against Disability: Our Personal Accident Benefit rider provides you with a lump sum payment in case you meet with an accidental death or an accidental disability.


Eligibility:



Benefits

Maturity Benefit:
On maturity, we will pay you the Fund Value. However, if you do not want the proceeds on maturity, you may choose to defer it by upto 5 years.

Loyalty Units:
We will allocate free units (called Persistency Units) to your unit account on the 9th policy anniversary and on every 3rd anniversary thereafter. These will be equal to 1% of weighted average of your fund values on the immediately preceding 36 monthiversaries.

Insurance Cover: You have the option to choose your sum assured from a wide range of available limits. This feature gives you an opportunity to direct your money towards investments or towards coverage, depending on your need. High or low Sum Assured will not change the premium.

Premium Payment Term:
You have the flexibility to choose the premium payment term between Regular Pay or Single Pay or Limited Pay (3/5/7/10 years). Suitable for all kind of cash flows of any individual.

Policy Term:
You can choose the policy term from the wide range of 5 years to 75 years, subject to a maximum maturity age of 75.

Investment of Funds:
You have the option of investing your money in four attractive funds.



Top-Up Premum:
You can invest extra money in your policy through occasional top-ups at anytime post the policy commencement dates. However, cumulative top ups will be allowed only up to 25% of the cumulative Annual Target Premium till date. Top ups will not effect the Sum Assured. You have the option to pay Top up premiums subject to a minimum of Rs.10,000.

Partial withdrawals and surrender:
You can make partial or full withdrawals to meet your monetary needs. Partial withdrawals can be made after 3 policy years. If you have chosen level insurance cover, your sum assured may reduce on partial withdrawal. Full surrender can only be done, post completion of first three policy years. The minimum value of partial withdrawal should be Rs 10,000/- and the minimum fund value after any partial withdrawal should not be less than one ATP (Annual Target Premium).

Charges

Premium Allocation Charges:
This charge is the charge expressed as a percentage of the ATP and Top Up premium received. This charge will be deducted from the ATP and the Top Up premium in the percentage as given below and the balance will be allocated for purchase of Units.



Fund Management Charges:
This is a charge levied as a percentage of the value of assets and shall be appropriated, usually daily, by adjusting the Net Asset Value of the fund.

Fund Type Charges
Secure Fund 0.90% p.a.
Conservative Fund 0.90% p.a.
Balanced Fund 1.10% p.a.
Growth Fund 1.25% p.a


Premium Redirection Charges
There is no charge for first three premium redirections during a policy year. Any subsequent premium redirection during a year will be charged at the rate of Rs.1000 per request.

Partial Withdrawal Charges
First 6 partial withdrawals are free of any charge in each policy year. Any subsequent transaction will attract a charge of Rs.1000 per partial withdrawal.

Switching Charges
We will not charge on first 6 switches in every policy year. Any subsequent switch will attract a charge of Rs.500 per transaction.
























Dream Plan

Key Features:

• Guaranteed Maturity Benefits
• Options to double or triple the Guaranteed Maturity Benefit by choosing 200% or 300% options.
• 100% premium allocation to optimise savings
• Sum Assured(Basic and Enhanced) plus the greater of fund value and Guaranteed fund value is paid as death benefit.
• Enhanced Sum Assured - Choice to enhance life cover anytime during the policy term at minimal additional cost

Our Dream Plan is a long-term Unit Linked insurance plan that is specifically designed to provide financial security for your future requirements. With us, your future is guaranteed.

Our plan combines a guaranteed return on your savings with upside potential based on the performance of the investment funds you decide to invest in. No matter what the future performance of the investment funds is, you are always guaranteed a minimum amount at maturity.

Our plan also ensures your nominee, in case of your demise, will get the sum assured you choose plus the value of your savings to date and we guarantee your savings will have earned no less than 3% per annum till date.


ELIGIBILITY:

Term of Policy Age at Entry Maximum Age at Maturity
Minimum Maximum Minimum Maximum
5yrs 25yrs 18yrs 60yrs 75yrs

The Guaranteed Maturity Benefit you choose must be at least:
Rs. 75,000 for the 100% Guaranteed Maturity option
Rs. 37,500 for the 200% Guaranteed Maturity option
Rs. 25,000 for the 300% Guaranteed Maturity option

The Enhanced Sum Assured you choose, if any, must be at least Rs. 50,000.


OPTIONS:
You are considering this plan for acquiring financial security in future. With us, you are guaranteed to succeed, no matter what happens.

Guaranteed Maturity Benefit:
The first step is for you to decide on the amount you want to receive at maturity guaranteed. This is the Guaranteed Maturity Benefit.
This plan combines a guaranteed return on your savings with upside potential based on the performance of the investment funds you decide to invest in. You are therefore assured that you will receive no less than the Guaranteed Maturity Benefit when this plan matures.

Guaranteed Maturity Option:
Our Dream Plan comes with three Guaranteed Maturity Options designed to allow you to secure more for yourself with three separate maturity amount payout schedules. Choose one of the three Guaranteed Maturity Options and you will receive:

Year End 100% Option 200% Option 300% Option
at maturity 100% 100% 100%
+ 1 year -- 20% 25%
+ 2 year -- 20% 25%
+ 3 year -- 20% 25%
+ 4 year -- 20% 25%
+ 5 year -- 20% 100%
Total 100% 200% 300%

As a percentage of the Guaranteed Maturity Benefit.

Don't forget, your plan has further upside potential. You will get this upside, if any, together with the last installment of the Guaranteed Maturity Benefit.

Additional Protection:
A Basic Sum Assured is associated with the Guaranteed Maturity Benefit you choose. This amount is paid in the unfortunate event that you die while your plan is in effect. We give you the option to increase this protection to suit your particular insurance needs. Simply specify the amount you want (the Enhanced Sum Assured) in addition to the Basic Sum Assured and your insurance protection will equal the sum of the Basic and Enhanced Sum Assured.

Premiums:
The annual policy premium is based on:

• Guaranteed Maturity Benefit and Option you choose
• Enhanced Sum Assured you desire
• Plan term and your gender and age at entry; and
• Premium associated with any riders you add.

You can also increase your savings at any time by paying additional amounts over and above the policy premium - this is known as top-up premiums. Each top-up premium must be Rs. 500 or more provided your total top-up premiums to date does not exceed 25% of your total policy premiums to date. We do accept top-up premiums in excess of 25% of your total policy premiums to date, but in this case, the minimum top-up premium is Rs. 5,000 and your Enhanced Sum Assured will be increased by 125% of the excess of your top-up premiums over 25% of policy premiums to date, subject to evidence of insurability satisfactory to us.

Investment of Funds:
You decide on the proportion of your policy premium and top-up premium to be invested in each of the three investment funds we offer - Protector, Builder and Enhancer.
Investment Fund Option
Minimum-Maximum Asset Allocation
Asset Type Risk Profile Protector Builder Enhancer
Money Market and Other Liquid Assets Very Low 0% - 20% 0% - 20% 0% - 20%
Government (or approved by) Securities Low 30% - 100% 25% - 90% 20% - 80%
Corporate Bond rated AA or above by Crisil Medium 0% - 30% 0% - 30% 0% - 30%
Infrastructure Sector as defined by the IRDA Medium 0% - 25% 0% - 25% 0% - 25%
Listed Equities High 0% - 10% 10% - 20% 20% - 35%
Our plan offers guaranteed maturity benefits and we track your guarantees via the Guaranteed Fund Value - the accumulation at 3% per annum of all your policy premiums and top-up premiums (net of the 2% Premium Allocation Charge) paid till date less policy charges deducted monthly.

Both the Fund Value and Guaranteed Fund Value will be reduced at the beginning of every policy month to cover your policy charges. We will redeem units equal to the monetary amount of the policy charge divided by the then prevailing unit price from each investment fund under your policy, in proportion to their value at that time.

Benefits
In the unfortunate event of your demise:
In the unfortunate event of your demise, your nominee will receive the Basic Sum Assured plus the Enhanced Sum Assured plus the greater of Fund Value and Guaranteed Fund Value. The Basic Sum Assured is associated with the Guaranteed Maturity Benefit you choose. Your financial advisor will provide you with the Basic Sum Assured specific to the plan you are considering.

Based on your insurance needs, you can increase the amount of protection via the Enhanced Sum Assured. You can specify the Enhanced Sum Assured at entry and/or increase it at any time during your lifetime. The minimum Enhanced Sum Assured increment is Rs. 50,000 and is subject to evidence of insurability satisfactory to us. Your annual policy premium will be increased if and when the Enhanced Sum Assured is increased.
Your Guaranteed Maturity Benefit:
The minimum Guaranteed Maturity Benefit is payable on the maturity date of your policy. This assumes however that you paid all policy premiums when due. Otherwise, the Guaranteed Maturity Benefit when due will be limited to the Guaranteed Fund Value at that time.

By choosing the 100% Guaranteed Maturity Option, we will pay the higher of the Fund Value or Guaranteed Fund Value on the maturity date of your policy and end the contract.
Double or Triple the Guaranteed Maturity Benefit:
By choosing the 200% or 300% Guaranteed Maturity Option, your contract will continue under a settlement option for a period of 5 years starting on the maturity date of the policy. During the settlement option period, we will not levy any policy charges except for the Fund Management Charge. Also, all riders will cease and no life insurance cover is provided.


At any time during the settlement option period, you can cancel the contract and we will pay the higher of the Fund Value or Guaranteed Fund Value at that time.

At the start of the settlement option period and at the end of each year thereafter, the Guaranteed Fund Value will be reduced by:


Date 200% Option 300% Option
at maturity 100% 100%
year-end 1 20% 25%
year-end 2 20% 25%
year-end 3 20% 25%
year-end 4 20% 25%
year-end 5 20% 100%
Total 200% 300%
As a percentage of the Guaranteed Maturity Benefit.


The Guaranteed Fund Value will never be reduced below nil.

Partial withdrawals not exceeding the excess of the Fund Value over the Guaranteed Fund Value can be made at any time during the settlement option period.

You are therefore given the choice to en-cash the guaranteed maturity benefits when due or leave them invested in the investment funds until the end of the settlement option period. At the end of the 5-year settlement option period, we will terminate the contract and pay the higher of the Fund Value or Guaranteed Fund Value.


Partial Withdrawals:
After the completion of three policy years, you are free to make a partial withdrawal at any time. The partial withdrawal must be at least Rs. 5,000 and cannot exceed the excess, if any, of the Fund Value over the Guaranteed Fund Value at that time.
The units redeemed will equal the partial withdrawal divided by the then prevailing unit price of the investment fund from which the partial withdrawal is taken. Partial withdrawals will not reduce the Guaranteed Fund Value.






Charges

Our Dream Plan offers discounts at higher Guaranteed Maturity Benefit amounts based on bands provided below:

Band Minimum Guaranteed Maturity Benefit
Band 100% Option 200% Option 300% Option
1 75,000 37,500 25,000
2 1,50,000 75,000 50,000
3 3,00,000 1,50,000 1,00,000
4 6,00,000 3,00,000 2,00,000
5 12,00,000 6,00,000 4,00,000
The charges under this plan are designed to optimize the long-term return on your investment while providing for the costs of insurance, distribution and administration of your policy.

Premium Allocation Charges:
No premium allocation charge is deducted from your policy premium so all of your policy premium will be invested in the investment funds of your choice.
For top-up premiums, we will first deduct a 2% premium allocation charge and then invest the remaining 98% in the investment funds of your choice.

Fund Management Charges:
The daily unit price of each investment fund is adjusted to reflect the fund management charge of 1.0% per annum of the fund's value. This charge is currently the same for Protector, Builder and Enhancer

Other Charges:
Your can make two fund switches, two partial withdrawals and two premium redirections free of charge per policy year. A charge of Rs. 100 will be levied per additional request.











Birla Sun Life Insurance Gold-Plus


This plan is a unit linked, non-participating, insurance plan. A simple, hassle free plan it helps you strike the right proportion between protection and savings. Our plan offers you the convenience of paying for a limited period of 3 years with the flexibility to reduce premium (subject to minimum of Rs 10000) from the second policy year onwards without reduction in Sum Assured. The plan, also offers you the benefits of top-up besides providing liquidity in the form of partial withdrawals and surrender benefits.

Our plan has seven fund options, which empowers you with the flexibility of allocating premiums in varying proportions into different fund options and achieves superior investment returns.

Eligibility:
Entry Age: 18 yrs to 70 yrs.
Minimum Premium: Rs10, 000.
Minimum Sum Assured: 5 x annual premium.

Maximum Sum Assured (based on the maximum multiple allowed age-wise)
Age 18-29 30-34 35-39 40-44 45-49 50-54 55-59 60-70
Max Mult. 44 38 30 21 14 10 7 5


Premiums:
You can choose your desired premium and the Sum Assured.

Top-Up Premium:
You can the fund whenever you have additional savings prior to the maturity of the policy. The minimum top up premium is Rs 5,000.

The Sum Assured in the plan will increase if the top-up amount exceeds 25% of the policy premium paid till date. The additional Sum Assured will be 125% of the excess premium and is subject to the administrative and underwriting rules of the company.






Investment of Funds:
We offer seven investment funds to suit your particular investment needs – Assure, Protector, Builder, Enhancer, Creator, Magnifier and Maximiser. If you wish to diversify your risk, you can choose to allocate your premium in varying proportions amongst the available investment fund options. You can switch between the fund options or change the allocation into the various funds anytime during the tenure of the policy.
Fund Type Debt Money Mkt & Cash Equity Risk
Assure 100% Very Low
Protector 90% - 100% 0 - 10% Low
Builder 80% - 90% 10% - 20% Low
Enhancer 65% - 80% 20% - 35% Medium
Creator 50% - 70% 30% - 50% Medium
Magnifier 10% - 50% 50% - 90% High
Maximiser 0 - 20% 80% - 100% High


Benefits
Maturity Benefit
On maturity, your Fund Value will be paid to you.
Death Benefit
In the unfortunate event of the death of the life insured prior to the maturity date of the policy, we will pay to the nominee the greater of (a) the Fund Value or (b) the Sum Assured reduced for partial withdrawals as follows:
Before the Life Insured attains the age of 60, the Sum Assured payable on death is reduced by partial withdrawals made in the preceding two years.
Once the Life Insured attains the age of 60, the Sum Assured payable on death is reduced by all partial withdrawals made from age 58 onwards.

Partial Withdrawals:
Partial withdrawals can be made after three complete policy years. The minimum withdrawal amount is Rs 5,000. The maximum partial withdrawal you can make is the excess, if any, of the Fund Value over the higher of:
• Rs 30,000; or

• Top-up premiums paid by you during the three years preceding the partial withdrawal date.
The first two partial withdrawal requests within a policy year are free of charge. We currently charge Rs 100 per additional request within a policy year and we reserve the right to increase this at any time, subject to a maximum of Rs 500 per request.


Charges

Premium Allocation Charges:
Premium Allocation Charge is deducted from your policy premium when received and before units are allocated. It is guaranteed to never increase.

Investment
Fund
Option Risk
Profile Asset Allocation * Min. Max.
Assure Very Low Debt Instruments, Money Market & Cash 100% 100%
Equities & Equity Related Securities 0% 0%
Protector Low Debt Instruments, Money Market & Cash 90% 100%
Equities & Equity Related Securities 0% 10%
Builder Low Debt Instruments, Money Market & Cash 80% 90%
Equities & Equity Related Securities 10% 20%
Enhancer Medium Debt Instruments, Money Market & Cash 65% 80%
Equities & Equity Related Securities 20% 35%
Creator Medium Debt Instruments, Money Market & Cash 50% 70%
Equities & Equity Related Securities 30% 50%
Magnifier High Debt Instruments, Money Market & Cash 10% 50%
Equities & Equity Related Securities 50% 90%
Maximiser High Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%
* In each Investment Fund Option, the Money Market & Cash asset allocation will not exceed 40%.


Fund Management Charges:
The charge is 1% p.a. for funds Assure, Protector, Builder, and Enhancer and for Creator, Magnifier, Maximiser funds it is 1.25% p.a.


Policy Administration Charges:
A Policy Administration Charge will be recovered by units on a monthly basis proportionately from each investment fund. See table below for the annual rate per 1000 of Sum Assured. We may increase this charge at any time after the 3rd policy year, subject to a maximum increase of 5% p.a. since inception.

Policy Charges Policy Years
1 2 3 4+
Premium Allocation Charge on policy premium 8% 4% 4% -
Premium Allocation Charge on top-up premium 2% 2% 2% 2%
Policy Administration Charge* 18.40 18.40 18.40 14.40
Surrender Charge 15% 12.5% 10% Nil
* per 1000 Sum Assured up to Rs 50,000. An additional 4 per 1000 will be charged in the first three policy years only on any excess Sum Assured over Rs 50,000.

Other Policy Charges:
Your can make two fund switches, two partial withdrawals and two premium redirections free of charge per policy year. A charge of Rs 100 will be levied per additional request, and we may increase this charge at any time in the future subject to a maximum of Rs 500 per additional request.






























InvestAssure II

InvestAssure II is a unique, flexible insurance plan which combines the security of a life insurance policy with the opportunity to exploit the upside of market returns by investing in different kinds of securities through multiple fund options. You can direct the investments by creating your own investment fund portfolio from a range of options to suit your needs and preferences.

Key features:
• Policy terms of 15, 20 or 30 years.
• No penalty for surrendering the policy any time after the 6th year.
• The Sum Assured is a multiple of the Annual Regular Premium payable. The multiple varies according to age at entry and policy term. You have a choice of premium multiples to choose from.
• Any premium not deducted for coverage and charges may be invested in a wide range of investment vehicles, including: an Equity Fund, Income Fund, Aggressive Growth Fund, Stable Growth Fund and a Short Term Fixed Income Fund.
• InvestAssure II also offers the flexibility to switch between funds, premium top-ups, partial withdrawal, premium holiday, policy reinstatement, and multiple premium payment modes.

Key Benefits:

• Provides security to your family in case of the Life Insured’s unfortunate demise.

• Gives you the flexibility to choose your funds based on your risk profile.

• Enables you to enjoy market-linked returns with a potential for higher growth.

Eligibility:

Term of policy Minimum age Maximum age
15 yrs 30 days 60 yrs
20 yrs 30 days 55 yrs
30 yrs 30 days 45 yrs


Term of Cover:
The policy provides you an option of choosing a life cover for a term of 15 years, 20 years or 30 years. You can also surrender your policy any time after the 6th policy year without any penalty charges.

Amount of Death Cover:
The Sum Assured is a multiple of the Annual Regular Premium payable. The multiple varies according to age at entry and policy term. You have a choice of premium multiples to choose from. When the Fund Value exceeds the Sum Assured, the death benefit will be the Fund Value.

Increasing Sum-Assured:
You have an option to choose an additional Sum Assured (also known as Top-Up Sum assured) equal to the Premium Multiple times the Top-Up Premium, subject to underwriting. If at any point of time the total amount of Top-Up Premium is more than 25% of the Total Regular Premium paid till date, then such excess amount of Top-Up Premium will be use to provide additional Sum Assured, subject to underwriting rules prevailing at that time. The Premium Multiple can be 1.25 or 5 times. This Sum Assured will remain constant for the entire policy term.

Investment of Funds:
Choose the premium you pay, a certain amount is deducted for covering the life cover charges and other fees (administrative fee and charges) and the balance is invested in the funds as per your required premium allocation.

You have the option of choosing from five Funds managed by TATA AIG Life Insurance Company Limited or a combination of them, based on your preferred premium allocation.

You can create your own premium allocation by investing in any combination of the following funds:

Types Equity Debt Risk
Equity Fund 100 HIGH
Income Fund 100 LOW
Aggressive Growth Fund 50% - 80% 20% - 50% MEDIUM-HIGH
Stable Growth Fund 30% - 50% 50% - 70% MEDIUM
Short Term Fixed Income Fund Upto 20% in Money market and securities including debentures 100% in debentures, govt securities LOW



Topping up premium:
If you receive a windfall gain, be iit a bonus or a lottery, you could invest the monies in your policy by way of Top-Up premiums. You can top-up up to 2 times in a policy year. The minimum top-up amount is currently Rs. 10,000/-

Incase the total top-up amounts are less than 25% of the total regular premiums paid till date, the top-up can be made without increasing the sum assured. However, if the total top-up amounts are more than 25% of the regular premiums paid till date, then the top-up will have a corresponding top-up sum assured of 1.25 or 5 times such excess amount.

Riders:
• Accidental Death Benefit Rider
• Accidental Death and Dismemberment Rider
• Waiver of Premium Rider
• Critical Illness Rider

Charges

Premium Allocation Charges:

First Year Second Year Third Year Onwards
50% 25% 1%

Top-up premium allocation charge 1.5% p.a

Fund Management Charges:

Equity 1.75% p.a
Aggressive Growth 1.60% p.a
Stable Growth 1.40% p.a
Income 1.25% p.a
Short-Term Fixed income 0.90% p.a


Switching Charges:
First four switches per policy year will be free of any charges. Subsequently, a charge of Rs. 250 wil be levied on all switches.













Met Smart Premier

• It is a transparent premium Unit Linked Insurance policy that provides life cover protection up to age 100
• Offers further customization through riders-Accidental Death Benefit, Critical Illness
• Offers you a choice of six investment fund options to suit your risk/return profile
• Gives you the freedom to switch between funds
• Allows you the flexibility to pay more premiums by way of Top-ups
• Allows access to cash anytime after three years to meet your financial requirements.


Eligibility:


Minimum entry Age 0 (age last birthday), 3 months to be completed)
Maximum entry Age 70yrs (age last birthday)
Minimum Regular premium Rs. 12000 p.a
Minimum Top-up premium Rs. 5000
Minimum Sum Assured Rs. 60000
Maximum Sum Assured No limit


Death Benefit:

• If age at death less than 7years: 100% of the Fund Value in the Unit Account
• If age at death equal to or more than 7 years: Sum Assured plus Fund Value in the Unit Account

Met Smart Premier provides 100%of the Fund Value on survival to maturity.




Riders:
You can further customize your policy by availing the following riders at the time of purchasing the policy.
• Accidental Death Benefit Rider
• Critical Illness Rider


Investment of Funds:
Met Smart Premier offer you six Investment Fund Options which have different risk-return profiles and different asset allocation patterns. The money you invest would be apportioned between the various asset classes. The apportionment for example would be:







Top-Up Premiums:
Should you have extra cash at any point in time, you can top-up premiums in addition to your regular premium, subject to a minimum/maximum as stipulated by the company.

The Sum Assured would be increased by 125% of the top-up premium on each such payment. Any top-up premiums paid would be non-withdrawable for three years from the date of such payment.

Partial Withdrawals:
You may request for a partial cash withdrawal subject to the conditions below:
• The minimum amount of partial withdrawal is Rs.5000
• Three policy years have elapsed
• Insured completing 18 years of age
• The amount requested is less than the surrender value of the withdrawable part
• Minimum amount retained in the account after withdrawal being one annualized premium


Charges

Premium Allocation Charges:
The premium allocation charge will be as given in the following table:



Fund Management Charges:
The following fund management charges (expressed as a percentage of the value of the assets underlying the Unit Account) will be levied:


Partial Withdrawal Charges:
The first two withdrawals in a policy year will be free of any charge. For each subsequent partial withdrawal, the company will charge you Rs. 250.

Switching Charges:
The first four switches between funds in a policy year will be free of any charge. After this, for each further switch between the funds, the company will charge you Rs. 250.






























Is Unit-Linked Life Insurance for you?



Unit-linked life insurance offers the interesting option of combining protection and tax advantages of life insurance with the attractive prospects of investing in equities.
A unit-linked plan works on a minimum premium basis and not on a sum assured one. You decide the amount you can contribute at regular intervals. ULIP offers you insurance cover till your insurance needs are fulfilled, beyond that it becomes an investment avenue.

How they compare?
To explain how ULIP works we will compare HDFC ULIP Endowment plan with HDFC Endowment plan.
Premium
In case of: ULIP, you pay a minimum premium of Rs 10,000 per annum irrespective of age and term of the policy. Premiums levels can be either reduced or increased if premiums have been paid regularly for three years and the unit fund value is at least Rs 15,000. The flexibility of increasing premium contributions in an existing account helps policyholders manage their cash flows.
In normal/traditional endowment plans the premium is calculated on the basis of age and the term and the amount you pay, as premium remains the same for the full term. The minimum premium is Rs 1,500 annually.
Sum assured
The sum assured depends on your age and the cover you take in case of ULIP. Depending on your age at entry, you may choose between 3 levels of cover - low, medium or high.
In the traditional plan, the sum assured is calculated by age and term of the policy to which premium factor is applied.
Top-ups
Apart from your regular contributions, in case of ULIP, you can also make additional payments to increase the savings component. These top-ups do not affect the sum assured. Normal endowment policy does not offer you these benefits.
Investment
You choose the fund where you want to invest your money. HDFC offers a choice of five funds - liquid, defensive, secure managed, secure defensive and growth. The Liquid Fund is the least risky with investments in bank deposits and short-term money market instruments. Growth Fund is the riskiest with an investment of up to 100% in equities.
In traditional insurance plans your money is invested keeping in view the IRDA specification i.e.minimum 85% in debt with the balance in equities.
Charges
As is the case with unit-linked plans, this plan, too, imposes charges, on both the funds invested by the policyholder and by cancellation of units. These charges vary depending on the kind of premium payment option chosen (single or regular).
Other charges include a fund management charge of 0.80% of the fund value per annum, apart from a flat fee of Rs 15 per month deducted by cancellation of units
In case of ULIP, for the first 2 years the investment content rate is 70% of the premium and for the remaining years 99%. Risk cover charges (for death sum assured, critical illness, accidental death) are charged for cancelling units on each monthly charge date, based on the person's age at that time.
In traditional plans, the charges are not disclosed. There is an annual fee of Rs 150 for regular premium policies and Rs 300 for single premium ones.
Returns
In case of ULIP, in an eventuality you receive the sum assured or fund value whichever is higher and on maturity the fund value. In normal endowment plan, in either case you receive the same benefit i.e. the sum assured and vested bonus.
In case you stop paying premiums
If this is in the first 3 years then in case of ULIP, on cancellation of the policy before paying regular premium for 3 years, there is a charge of 25% of the outstanding premiums due during this 3-year period. In case of normal endowment the policy lapses and nothing is paid back.
If you stop paying premiums after 3 years, in ULIP you have the option to make policy paid up, provided the policy has accumulated sufficient policy value. At present this amount is Rs 15,000. If the fund value of a paid up policy falls below Rs 15,000 then the policy is cancelled and the fund value is returned to you. The risk cover continues for the sum assured even though the policy has reached the paid up status. In traditional plan the policy becomes a paid up policy.
Medicals
In both the plans the norms for medicals are similar i.e. medicals are compulsory.
What is the right strategy for you?
While making an investment in ULIP get the agent to disclose the costs. Compare across companies, product categories and within products. Insurance is a long-term contract, with low liquidity and potentially higher costs. Look at these costs before considering a ULIP for investment.



























5 steps to select the right ULIP


Unit Linked Insurance Plans (ULIPs) were always seen as a 'wonder product' that simultaneously fulfilled an individual's needs for investment and insurance.
However, the recent downswings in the markets have forced investors to do a rethink. Very often it was poor selection that was responsible for the investors' woes. Here is a 5-step strategy for investing in ULIPs.
1. Understand the concept of ULIPs
Try to do as much homework as possible before investing in an ULIP. This way you will know what you are getting into and won't be faced with unpleasant surprises at a later stage.
Our experience suggests that many a time people do not realise what they are getting into (in fact we have been approached by several people who wanted to cancel the ULIPs they had been coerced into taking by unscrupulous agents). Gather information on ULIPs, the various options available and understand their working.
Read the literature available on ULIPs on the Web sites and brochures circulated by insurance companies.
2. Focus on your requirement and risk profile
Identify a plan that is best suited for you (in terms of allocation of money between equity and debt instruments). Your risk appetite should play an important role in the plan you choose.
So if you have a high-risk appetite, go in for a more aggressive investment option and vice-a-versa. Opting for a plan that is lop-sided in favour of equities when you are a risk-averse individual might spell disaster for you (this is true in most cases currently).
3. Compare ULIPs of different insurance companies
Compare products of the leading insurance companies. Enquire about the premium payments as ULIPs work on minimum premium basis as opposed to sum assured in the case of conventional insurance policies.
Check the fund's performance over the past six months. Find out how the debt and equity schemes are performing and how steady the performance has been. Enquire about the charges you will have to pay. In ULIPs the costs involved are a big deciding factor.
Ask about the top-up facility offered by ULIPs i.e. additional lump sum investments you can make to increase the savings portion of your policy.
The companies give you the option to increase the premium amounts, thereby providing you with the opportunity to gainfully utilise surplus funds at your disposal.
Enquire about the number of times you can make free switches (i.e. change the asset allocation of the money in your ULIP account) from one investment plan to another.
Some insurance companies offer you free switches for a 2-year period while others do so only for 1 year.
4. Go for an experienced insurance advisor
Select an advisor who is not only professional and informed, but also independent and unbiased. Also enquire whether he has serviced clients like you.
When your agent recommends a ULIP of X company ask him a few product-related questions to test him and also ask him why the other products should not be considered.
Insurance advice at all times must be unbiased and independent and your agent must be willing to inform you about the pros and cons of buying a particular plan.
His job should not just begin by filling the form and end after he deposits the cheque and gives you the receipt. He should keep a track of your plan and inform you on a regular basis. The key is to go for an advisor who will offer you value-added products.
5. Does your ULIP offer a minimum guarantee?
In market linked product if your investment's downside can be protected, it would be a huge advantage. Find out if the ULIP you are considering offers a minimum guarantee and what costs have to be borne for the same. This will enable you to make an informed choice.

















Conclusion

The above mentioned all products have been studied and analysed very closely. Depending upon the customer requirement and more flexibility, transparency, amount of charges deducte, facilities provided it was found very difficult to come to a conclusion of finding out a best ULIP plan.

As per criteria decided the best ULIP plans is:



Finding this plan as the best plan was very tough, since there were two major products i.e ICICI Life Time Super and HDFC’s Unit Linked Young Star Plus. HDFC and Bajaj were very close to each other, but due to some features which were found attractive in Bajaj Unit Gain Plus, it has been concluded as the best plan.

ICICI Life Time Super is the leader in the market but as per the comparison it has been noticed that, it is the leader only because of good returns given by the company (i.e last year 48%), whereas Bajaj Unit Gain Plus was noted at 35% three years average return.

As per deep study between the various products offered by different companies Bajaj Unit Gain Plus offers you more benefits than any other company and with very low charges. Another company which charges very low after the leading plan is HDFC’s Unit Linked Young Star Plus, but lacks behind due to some features like greater slab for partial withdrawals, Premium Allocation Charges higher than the leading plan, and Surrender and Partial withdrawals being charged. But HDFC’s plan offers you Loyalty Units which the leading plan does not.

During interviews when asked to the executives of ICICI Life Insurance, the major competitor they found is:
Bajaj Life Insurance because of attractive plans.
HDFC Life Insurance because of less charges and
Reliance Life Insurance because the company has been ranked among top 5 private life insurance companies in India within one year of their entry. As Reliance is very much famous for attracting masses than volumes, it is seen as a major competitor for the other players.
 

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The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years.
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.
With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It's a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country's GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP.
General Insurance in another segment, which has been growing at a faster pace. But as peer the current comparative statistics, the general insurance premium has been lower than life insurance. General Insurance premium as a percentage GDP was a mere 0.5 per cent in 1996.
 
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