Description
100 mark project
1. INTRODUCTION TO PROJECT
1.1 INTRODUCTION OF ULIP A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder. ULIP came into play in the 1960s and is popular in many countries in the world. In 1971 the Unit Trust of India offered the Unit Linked Insurance Plan. Out of insurance premium a small part of contribution was utilized for providing life cover and balance invested in units. As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In today's times, ULIP provides solutions for insurance planning, financial needs, and many types of financial planning including children’s marriage planning. In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument was challenged by the market regulator SEBI which took up the matter to the Supreme Court of India .The Indian government brought down curtains on the two-month long tussle between the regulators by ruling that Unitlinked Insurance Products (Ulips) will be governed by the Insurance Regulatory and Development Authority (IRDA) On 21ST December, 2005 in India. The main intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk is borne by the policyholder. 1.2 OBJECTIVES OF PROJECT
? To understand the concept of ULIP.
? To identify the scheme preference of investors.
? To show the wide range of investment options available in ULIP by explaining its various
schemes. ? To know how ULIP are differ from Traditional plans means how they give better returns than traditional plan. ? Gather and analyze the future aspirations of the customers with respect to the ULIP’s.
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1.3 THE SCOPE OF RESEARCH Researcher found the following scopes:
? To study the awareness among customers related to ULIP. ? Future prospect of ULIP. ? Importance of ULIP.
1.4 LIMITATION OF PROJECT STUDY Researcher found the following limitations:
? Many people are not aware and don’t have any idea about ULIP’s.
? The study is limited area only. ? Sample size taken is small and may not be sufficient to predict the results with 100% accuracy.
? Time was not sufficient to research.
1.5 METHODOLOGY OF THE STUDY The collection of data refers to a planned gathering of information relevant to the subject matter of the study from the units under investigation the method of collection of data depends mainly upon the nature, objective and scope of the inquiry on one hand and available of resources and time on the other hand. Data may be classified into primary and secondary data, depending upon the nature and mode of collection. Mainly the data is collected from: 1. Primary data 2. Secondary data 1) Primary data: Primary data is collected from the prospective customers, agents and the staff of SBI. And the collection of the data through interaction with various respondents. 2) Secondary data: Secondary data collected from the published magazines and websites to collect the data. The secondary data is collected from the following sources. ? Business magazines ? Journals ? Company broachers and books ? Published books
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? Website
2. INTRODUCTION OF INSURANCE
Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance is a safeguard against uncertain events that may occur in the future. It is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. It is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. Loss is paid out of the premium collected from people and the insurance companies act as trustees to the amount so collected. These companies have proposal forms which are filled to give details of insurance required. Depending upon the answers in the proposal from insurance companies assess the risk and decide on the premium. Insurance companies are risk bearers. They underwrite the risk in return for an insurance premium. the function of insurance is to provide protection, prevent losses, capital formation etc. hence insurance can be defined as a tool in which a sum of money as a premium is paid by the insured in consideration of the insurer’s bearing the risk of paying a large sum .it may also be
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defined as a contract wherein one party (insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given contingency against which insurance is required. Insurance industry commands massive funds through sales of insurance products to large number of clients. Insurers also create liabilities and commit themselves to compensate for losses occurring to the policyholders on future date. It also plays an important role in process of capital formation. 2.1 HISTORY OF INSURANCE SECTOR 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 Some of the importantgmilestonesgingtheglifeginsurancegbusinessgingIndiagare:1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurancegbusiness. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statisticalginformationgaboutgbothglifegandgnon-lifeginsurancegbusinesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protectinggtheginterestsgofgtheginsuringgpublic. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of generalginsurancegbusiness. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
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conductgforgensuringgfairgconductgandgsoundgbusinessgpractices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins andgthegTariffgAdvisorygCommitteegsetgup. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1 st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance CompanygLtd.gGICgincorporatedgasgagcompany.
2.2 PRINCIPLES OF INSURANCE 1. A large number of homogeneous exposure units: The vast majority of insurance policies are provided for individual members of very large classes. 2. Definite Loss: The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. 3. Accidental Loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. 4. Large Loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. 5. Affordable Premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered
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6. Calculable Loss: There are two elements that must be at least estimatable, if not formally calculable: the probability of loss, and the attendant cost. 7. Limited risk of catastrophically large losses: The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed.
2.3 FUNCTIONS OF INSURANCE 1. Primary function 2. Secondary functions 3. Other functions Primary functions:1.lProvide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. 2.lCollective bearing of risk: Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. 3.lAssessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. 4.lProvide Certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.
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Secondary functions:1.lPrevention of Losses: Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. 2.lSmall capital to cover larger risks: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. 3.lContributes towards the development of larger industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. Other functions:1.lMeans of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. 2. Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. 3.lRisk Free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.
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3. CONCEPT OF ULIP
3.1 INTRODUCTION OF ULIP Unit linked insurance plan (ULIP )is the Product Innovation of the conventional Insurance product. With the decline in the popularity of traditional Insurance products & changing Investor needs in terms of life protection, periodicity, returns & liquidity, it was need of the hour to have an Instrument that offers all these features bundled into one. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. ULIPs attempt to fulfill investment needs of an investor with protection/insurance needs of an insurance seeker. ULIPs work on the premise that there is class of investors who regularly invest their savings in products like fixed deposits (FDs), coupon-bearing bonds, debt funds, diversified equity funds and stocks. There is another class of individuals who take insurance to provide for their family in case of an eventuality. So typically both these categories of individuals (which also overlap to a large extent) have a portfolio of investments as well as life insurance. ULIP as a product combines both these products (investments and life insurance) into a single product. This saves the investor/insurance-seeker the hassles of managing and tracking a portfolio of products. Presently there are 200 plus ULIP Schemes in the market. ULIPs offer a variety of options to the individual depending on his risk profile. For instance, an individual with an above-average risk appetite can choose a ULIP option that invests upto 60% of premium in equities. Likewise, an individual with a lower risk appetite can select a ULIP that invests up to 20% of premium in equities. 3.2 DEFINITION “A type of insurance vehicle in which the policyholder purchases units at their net asset values and also makes contributions toward another investment vehicle. Unit linked insurance
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plans allow for the coverage of an insurance policy, and provide the option to invest in any number of qualified investments, such as stock, bonds or mutual funds”. 3.3 CONCEPT OF ULIP Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the benefits of protection and flexibility in investment. It is a solution which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time . The investment is denoted as unit and is represented by the value that it has attained called as Net Asset Value (NAV).
UNDERLYING UNITS INVESTMENT IN UNIT LINKED FUNDS INSURANCE POLICIES
ULIP came into play in 1960s and became very popular in Western Europe and America. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers to the clients. As time progressed the plans were also successfully mapped along with life insurance needs to retirement planning. In today’s times ULIP provides solution for all the needs of a client like insurance planning, financial needs, financial planning for children’s future and retirement planning.
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LIFE PREMI LESSCOVER CHARGE UM
3.4 STRUCTURE OF ULIP
INVESTMENT REPRESENTED AS UNITS
3.5 ADVANTAGES AND DISADVANTAGES OF ULIP ADVANTAGES OF ULIP The advantages of ulip are given below: 1.lFlexibility: ULIPs offer a complete selection of high, medium and low risk investment options under the same policy. You can choose an appropriate policy according to your risk taking appetite, coupled with the opportunity to switch between fund options without any additional expense for specified number of switches. ULIPs provide the flexibility to choose the sum assured and investment ratio in the annual targeted premium. It also offers the flexibility of one time increase
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in investment portfolio, through top-ups to avail investment opportunity offered by external environment or own income flows. 2.lTransparency: The charge structure, value of investment and expected IRR based on 6% and 10% rate of returns, for the complete tenure of the policy are shared with you before you buy a product. Similarly, the annual account statement, quarterly investment portfolio and daily NAV reporting, ensures that you are aware of the status of your investment portfolio at all times. Most companies publish latest NAVs on their respective websites on a daily basis. 3.lLiquidity: To cope with unforeseen circumstances, ULIPs offer the benefit of partial withdrawal; wherein after 5 years you can withdraw funds from our Unit Linked account, retaining only the stipulated minimum amount. 4.lRegularlsavings: ULIPs help you inculcate a regular saving habit. Also, the average unit costs tend to be lower than one time investment. 5.lMultiplelbenefits: ULIP is an outstanding solution for risk cover, long term investments with the benefit of various investment opportunities, coupled with tax benefits. 6.lSpreadloflrisk: ULIPS are ideal for those investors who wish to avail the benefit of market linked growth without actually participating in the stock market, with the added benefit of risk-cover. DISADVANTAGES OF ULIP Ulip have their following drawbacks: 1.Flexibility: This can act a disadvantage since the person may use the withdrawal and may not end up building a huge corpus. 2.Initially heavy costs: You pay around 15-20% for the first year and then around 5%for the next two year 3.6 TYPES OF ULIP
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ULIP offers is that whatever be your specific financial objective, chances are that there is a ULIP which is just right for you. The figure below gives a general guide to the different goals that people have at various age-groups and thus, various life-stages.
3.7 COMPARISION OF ULIP WITH TRADITIONAL PLAN
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Unit Linked Insurance Product: ULIPs have gained high acceptance due to attractive features they offer. These include: ? Flexibility ? Flexibility to choose Sum Assured. ? Flexibility to choose premium amount. ? Option to change level of Premium /Sum Assured even after the plan has started. ? Flexibility to change asset allocation by switching between funds ? Transparency ? Charges in the plan & net amount invested are known to the customer ? Convenience of tracking one’s investment performance on a daily basis. ? Liquidity ? Option to withdraw money after few years (comfort required in case of exigency) ? Low minimum tenure. ? Partial / Systematic withdrawal allowed ? Fund Options ? A choice of funds (ranging from equity, debt, cash or a combination) ? Option to choose your fund mix based on desired asset allocation Traditional Plans : These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: ? Steady Investment ? Major chunk of investible funds are in debt instruments ? Steady and almost assured returns over the long term ? Features
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? Death benefit is Sum Assured + guaranteed & vested bonus ? Helps in asset creation as they are for a long tenure ? Premium to Sum Assured ratios are fixed for each plan and age. ? Generally withdrawals are not allowed before maturity.
Point of difference Investment Transparency in costs Flexibility in payment Assured Bonus Assured Sum on survival Option to increase investment/premium
ULIP Market related (May be stock market or debt market) Yes Yes No No Yes
Traditional Policy IRDA? Determined investments No No Yes Yes No
4. INVESTMENT OF ULIP IN MARKET
4.1 HOW TO CHOOSE ULIP
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The wide range of ULIPs available in the market might make it difficult for a consumer to choose the correct ULIP. However, follow a few simple steps choosing the right ULIP can be a smooth process. 1.lFocuslonlrequirementslandlrisklprofile: Identify a plan that is best suited for keeping in mind risk appetite. In case have a high-risk appetite, opt for a more aggressive fund option (an option that invests higher percentage in equities) and vice versa. 2.lUnderstandlthelpeculiaritiesloflthelplan: Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, fund management charges and mortality charges. 3.lExaminelthelperformanceloflthelplan: Compare the performance of the plan with benchmark indices like BSE Sensex or Nifty in the past two or three years to get a better idea about the performance. Ensure that you can easily get information about your NAV when you need it. Thoroughly understand the flexibility and redemption conditions of an ULIP. 4.lUnderstandlthelchargeslleviedlonlthelproduct: Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, the fund management charges and mortality charges. 5.lComparelULIPlproductslofldifferentlinsurancelcompanies: Compare products of different insurance companies in terms of premium payments, cost structure, performance of the scheme (equity as well as debt schemes), additional facilities such as top-up premium and free switch between different fund options, flexibility in terms of increasing or decreasing protection, reporting structure and flexibility in redemption. 6.lKnowlaboutlthelCompany: Last but not least, insure with a brand can 2 trust to honor its commitment and service in accordance to requirements.
In the process of deciding which ULIP to invest in; or a unit linked insurance policy to secure important financial goals there are some key principles which should govern any decision related to ULIPs. Adhering to these key principles will allow you to make optimum utilization of your ULIP. 1.Appropriate Life Cover: 1) Insurance policy taken: Unit Linked Insurance (ULIP) plans are designed to help to meet financial goals by ensuring the value of investments, or nominee sum assured, which is the life cover of policy. To make sure that ULIP is truly working to assure goal, choose a life cover that provides family with adequate This analysis shows security even in absence, so thatalready had life goals of family are even finances and hence that about 98% of investors were important insurance policy taken, always though a 2% of investors were not having insurance taken. secured. Let us take the example of a 35-year-old man with 2 young children. He could begin with a sum assured of Rs 5 lakh. As the children grow and thereby the financial liabilities increase, he might want to increase the level of protection, which can be done by increasing his sum assured. 2. Right Fund Option: 2) Percentage of people interested in different policy: • Unit-Linked Insurance Plans (ULIPs) come with an in-built range of fund options to choose from – ranging from aggressive funds (primarily invested in equities with the general aim of capital appreciation) to conservative funds (invested in cash, bank deposits, and money market instruments with thethat the approximately % of peoplethat to invest various policy. Pension and This analysis shows aim of capital preservation) – so interested in money in line with market outlook, time horizon, and investment preferences and needs. If there have a highthat familiar money back were more famous amongst customers of 30-40 years. Ulips were not risk appetite, should opt for a more aggressive investment option, and vice versa. and did not have good response. Additionally also have the advantage of switching fund options to make investments work in tandem with the market. These days, various ULIPs also offer the options of life stage funds which keep dynamically altering themselves without having to do any monitoring. 3. Long Term Investment: Unit-Linked Insurance Plans (ULIPs) are meant to guarantee financial goals over the long3) Percentage of people interestedtool, they will not give considerable return on investments, term. As a short term investment in knowing more from agent: because of a product cost structure which is higher in the initial years. However, overall charge structure for the term comes down substantially over a long period of time thus allowing greater allocation of premium in the chosen funds. Also in long term investment in ULIPs are less affected by temporary market fluctuations since data shows that over a long-term, market 3 linked investments not only yield very attractive returns, but also have the least downside to them. To get the best out of your ULIP, you should remain invested in the ULIP for the long-term of at least 8-10 years. This way, investment will
goals. 4. Know the Charges: Unit-Linked Insurance Plans (ULIPs) are designed to meet two of the most important This analysis shows that large amount of customers werebenefits have know through agents what financial needs: protection and investment. Both these interested to some charges attached to their policy werecharges to does itabout before purchasing a ULIP are: them; important and what know has. • • • • Premium Allocation charge Policy Administration charge Mortality charge Fund Management charge
The important thing to note about ULIPs is that the overall charge structure in the long term comes down substantially, thus allowing greater allocation of premium to chosen fund, thereby 4) Percentage of people knowing use/importance of insurance: right to revise the fees and leading to wealth creation. It may be noted that insurers have the charges over a period of time. 5. Know the Features: Unit-Linked Insurance Plans (ULIPs) offer a variety of features and benefits that no other This analysis shows that in does. Most ULIPs are rich in features such as top up, switch between single financial instrument this competitive world majority of people know the importance of insurance and its need in this very unpredictableduring the term of the policy, cover continuance funds, increase or decrease the protection level world. option, surrender options & range of riders which can be attached to the main policy to provide added protection. As with all other products, the exact features of a Unit Linked Insurance Policy differ from one product to another. Always insist on seeing the brochure so that customer can make right choices of ULIP to secure goals – be it retirement planning, planning for your children’s education, or wealth creation.
5) Percentage of UNDER ULIPproblem due to service provided by insurers: 4.3 CHARGES people facing 1. Contribution related charges: These are the charges that are represented as a percentage of the regular or single contribution This analysis shows that the 14% of customersit is usually highwere very minute likepay for the paid. In case of a regular contribution plan, facing problems in the first year to calls don’t get received cost. Thisnot reaching infor the issuance and for satisfied withcommissions. These distribution or policy charge pays time. Whereas others are distribution insurers. charges are running for the policy. 2. Administrative charges: These are charges that are levied for the administration of the policy and the related cost of
3 administration of the insurance company, itself. They are more related to the cost like IT,
operational, etc cost of continuing the policy.
These are the charges for buying and selling debt and equity. These are the charges are adjusted in NAV itself. 4. Mortality charges: This covers the cost of providing life protection for the insured and may be paid once at the start of the policy for a recurrent manner for example this charges levied to provide the insurance cover under the plan. Normally these charges are one year charges as per the age of the holder. 5. Rider charges: Rider charges are similar in nature to the mortality charges as they are levied to pay for the other protection benefits that the policy holder has chosen for- like the critical illness benefit or the accident benefited. 6. Surrender charges: When the policy holder decides to surrender the policy or partially withdraw some of the units 6) Percentage of people aware about: for cash, a surrender charge may be apply. Surrender charges are used to cover initial expenses that have been incurred by the company but not yet recovered from the policyholder yet. 7. Bid offer charges: In ULIP specifically certain insurers might create a difference in the price at which they sell the unit and the price at which they buy the units. Investor’s contributions are used to buy units in This analysis shows that some left the whole space blank or vice a versa, customers taking policy the investment fund at the offer price and are sold when benefits are required at the bid price. know majority the premium they pay or the sum of premium. Even the reason for taking The difference between the offer and bid prices Is known as the “bid-offer spread", this is used insurance tax deduction is well known. to cover expenses when setting up the policy. 8. Transactional specific charges: These charges are levied when the client does some specific transaction like changing funds topping up the investment component or withdrawals.
7) Percentage of people aware about ULIP policy: 4.4 HISTORY OF ULIP • • ULIP came into play in 1960 and is popular in many countries in the world today. In 1971 the Unit Trust of India offered the Unit Linked Insurance Plan. Out of insurance premium a small part of contribution was utilised for providing life cover and blance invested in units.
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Unit linked guidelines notified by IRDA on 21st December, 2005 in India. The main 3 intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk
This analysis shows that 54% of people aware about ULIP policy and 46% of people did not aware about ULIP policy.
6. SBI ULIP
6.1 STATE BANK O OF INDIA SBI Life Insurance Company Ltd has been launched SBI Life Smart Ulip plan.Smart ULIP is a hybrid of premium security and guaranteed returns plan.This plan is available for a limited time. SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2000 crore and a paid up capital of Rs 1000 crore. SBI Life – Smart ULIP is thinking ULIP policycustomer needs, and will give not only guarantee 8) Percentage of people the perfect answer to is: on selected net assets over the first seven years, but also provides the added attraction to participate in the market on its head. This is an investment cum insurance plan for market returns. SBI Life manage the investment, by giving maximum room for growth while protecting investments against adverse market conditions. This plan also provides 62% of customers are getting beneficial of ULIP policies and 38% ofpay The analysis shows that a convenient shorter premium paying term allows customers to customers for a limited period of either three orULIP years, and use the tax benefits u / s 80 C and premiums are not getting non-beneficial about five policies. 10 (10 D) of the income tax law. 6.2 VISION, MISSION AND VALUES VISION To be the most Preferred ULIP. SBI Life Insurance Company Ltd. manages the activities of SBI unit linked insurance product in India. The ULIPs organization offers a variety of schemes to Indian customers. SBI Life Insurance has several offices located across the country of India. The corporate head office of SBI life Insurance is situated in Mumbai.
MISSION To emerge as the leading company offering a comprehensive range of life insurance and pension 9) Compared to other traditional policies is ULIP policy more: products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalizationlperiod. VALUES
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• • • •
Ambition Innovation Dynamism Excellence
6.3 CORPORATE OFFICE ADDRESS This Life Insurance Co. Ltd, SBI analysis show that customer find that ULIP policy is more risky than other traditional 2nd Floor, Turner Morrison Bldg, polices. G. N. Vaidya Marg, Fort, Mumbai 400 023. NAME AND ADDRESS OF REGISTRAR Shri. Rajkumar Raina Head- Client Relationship SBI Life Insurance Co. Ltd. Central Processing Centre Kapas Bhavan, Plot 3A, Sector -10, CBD Belapur, Navi Mumbai – 400614 Tel: 022- 66456241 Email: [email protected]
10) DIRECTORS people refers: 6.4 Percentage of SBI Life Insurance Co. Ltd. 1. Shri.Geethanjali Deokar, Deputy Manager 2. Shri.Parag Gautam,Regional Manager This analysis show that even though people knowing about ulip policies are taking mutual funds 3. Shri.Pankaj Parashar,Assistant gold. as option for investment or they opt forManager 4. Shri,Raj bahadur, Agency Manager 6.4 PRODUCTS OF SBI LIFE INSURANCE
1. SBI Life - Smart Performer
Introduction: The equity market may have its ups and downs, but you now have a protective shield that will safeguard your investments, while providing upside potential. SBI Life brings you ’Smart Performer’, a unique Unit Linked, Non Participating insurance product that offers you the twin benefits of ’Higher than the Highest’ of the daily NAV Guarantee and the prospect of market upside. What’s more, it also allows you to protect your gains through Automatic Rebalancing facility and offers you a choice of Single and Limited Premium Payment options. Key Features:
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Guarantee at maturity based on ‘5% Higher than Highest Guaranteed NAV’ during the first seven years or prevailing NAV at Maturity, whichever is higher, subject to conditions#.
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Enjoy the best of both worlds - Guarantee only or Guarantee and Market Upside through our unique Plan offerings - ‘Secure Plan’ and ‘Secure N Grow Plan’ respectively ‘Automatic Rebalancing’ to Lock-in your gains
8. FINDING, RECOMMENDATION(SP) or 5 year Premium Paying Term (PPT) • Convenience through single premium AND CONCLUSION
• Life Insurance coverage with minimum Sum Assured of 10 times or 7 times of your 8.1 FINDINGS Annualised Premium (AP), based on your age. • •
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Liquidity people prefer Withdrawal(s) ? Mainlythrough Partial pension plan, endowment plan, money back plan, children plan, Option toplan but the percentage of people invest in ULIP is low as compare to other term customize the product with Accidental Death Benefit Attractive Tax benefits under the Income Tax Act, 1961, subject to conditions ** plans. ? Mainly people prefer low growth safe return as compare to high growth some risky
Product Snapshot: return.
? People mainly purchase life insurance policy for investment and then for tax-saving
Age at Entry* give 2nd preference toMin: 9 years they protection.
Max: 65years
Age at? Many people did not aware aboutyearspremium, terms & conditions, risk elements, Maturity Max: 75 the Premium administration charges etc. or 5 years Payment Term SP Yearly Rs MinimumWhile studying the Researcher find that, 50,000 ? Limited Premium customer is not aware about ULIP policy Half-yearly Rs 44,000 Amounts (X 100) because 54% of people aware about ULIP36,000 Quarterly Rs policy. Monthly Rs 20,000 ? While studying the Researcher finds that, 62% of people are thinking that ULIP Minimumpolicy is beneficial(X other60,000 customer thinks that this policy is not beneficial Single Premium and Rs 38% of No limits 100) for their investments. Maximum Limited/Single Premium While studying the Researcher find that, customer think that ULIP policy is more ? Amounts risky Policy Term than the other traditional policiesthe start arethe subscription period. to ULIP 10 years from which of less risky as compared Premium policy. Modes Single / Yearly / Half-yearly / Quarterly / Monthly Sum Assured studying the Researcher find that, even PPT Age/PPT For 5 yr though customer knows about ULIP For SP ? While policies are taking mutual funds as Minimum Maximum Minimumthey opt for an option for investment still Maximum separately for mutual funds, gold45 other investments. Below and 10 * AP 20*AP Yrs 8.1 RECOMMENDATION Between 45yrs & 60yrs 7 * AP 20*AP 1.25*SP 1.25*SP 5*SP 5*SP
61 yrs and 7 * AP 7 * AP 1.25*SP 1.25*SP ? Create awareness about Unit Linked Insurance Plan. above ? Even Plan Options today the product awareness of ULIP policy is much less among its segmented 2 Plan Options: 1. .It should - All your distribution network to a more people or potential customersSecure Plan explore itsfunds would be invested in the Daily Protect Fund 2. Secure2 Grow Plan - 80% of your funds would be N invested in the Daily Protect Fund and 20% would be invested in the Index Fund
Benefits: 1 Maturity Benefit: . On completion of Policy Term, Maturity Value will be paid. Maturity wider for the Daily Protect Fund will be calculatedthe product in awhich is value extent and make the customer understand based on NAV more easier way higher of:through its agents to its customer. Prevailing NAV as on date of Maturity OR ?• Advisors needed to be well aware of plans provided by other private players, not only plans provided by LIC. So that There will be an valuable information to • ofHigher than Highest Guaranteed NAV: they can provideincrement of 5% to the Highest NAV them towards the first seven targeting only LIC only while customers, to switch achieved duringus instead of years under the ‘Daily Protect Fund’. discussion with customers. 2 Death Benefit: ? In case of (safe investment plan II), our policy administration charges are much more . Higher of the Fund Value or Sum Assured## is payable; subject to a minimum of than other competitors throughout the period, which don’t allow us to perform more 105% of the total premiums paid## at the time of death. The death benefit is payable efficiently and real growth of policy don’t match with the growth rate for which we only for inforce policies. are known in the market, our policy administration charges are based on premium 1. Accidental Death Benefit Option: level. Accidental Death Benefit: Provides additional death benefit if the death ?occursoasoaoresultoofoanoaccident. as a short term investment plan and hence for the ULIP is a costly instrument if taken benefit for the customer he should be made convinced for long term investment through agents so that people do not take it as a former plan and think being deceived
1. SBI Life company. by the - Unit Plus® Super
? The marketing of these products should be done by the sales person by visiting to Introduction: different companies and inform the employees of their company during the lunch SBI Life – hour or breaks. is a flexible non participating Unit linked insurance Plan, specially Unit Plus Super designed to meet your changing requirements at various stages of life. With a wide array of funds, riders and other options, this product gives you the complete freedom to fulfill all your 8.1 CONCLUSION investment and insurance needs. And that’s not all; we now also offer you guaranteed additions In India, insurance is generallygiving you far superior value. device instead of its other implied and choice of payment options, considered as a tax-saving long-term financial benefits. Indian people are prone to investing in properties and gold followed by banks deposits. They selectively invest in shares also but the percentage is very small—4.5%. Even to this day, Life insurance market has become more vibrant. Smashing all doubts over the decision to liberalize the industry, the overwhelming first year performance of the Indian Key Features: insurance sector is test case of a massive success story of private players entering into the erstwhile state monopoly. • Guaranteed Additions# of up to 75% of one annual regular premium on a regular premium policy, for a 30 year policy term, subject to the Policy • • • • • • being in force till the maturity date. No Policy Administration fee for first 5 years for Regular and Limited Premium Paying Term (LPPT) plans, thereby boosting your fund value No Premium Allocation Charge from 11th year onwards 3 Guaranteed Additions starting as early as 10th policy year onwards Enhanced investment opportunity through 9 varied Fund Options including P/E Managed Fund, Index Fund & Top 300 Fund Option to pay Regular/Limited/ Single Premium; Switch or Redirect your
BIBLIOGRAPHY
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premiums Flexible product with an option to increase/decrease your Sum Assured from 6th year onwards Life Insurance coverage, with minimum Sum Assured, based on your age Liquidity through Partial Withdrawals. Option to customize the product with a wide range of riders: SBI Life Criti Care 13 Rider (UIN: 111A018V01), SBI Life - Accidental Death
Benefit Linked Rider (UIN: 111A019V01), SBI REPORTS, JOURNALS, NEWSPAPER, MAGAZIES: Life - Premium Payor Waiver Benefit Rider (UIN: 111A017V01) and SBI Life - Income Sustainer Rider (UIN: 111A020V01). 1. Newsweek 2. Business Today 3. Business World WEB SITES www.moneycontrol.com www.insuranceview.com www.lifeinscouncil.org Product Snapshot: www.iba.ie www.statebankofindia.com Age at Entry* Min: www.outlookindia.com 7 years Age at Maturity Policy Term 75 years Min. Term: For Regular Premium (RP) -10 yrs, 15 to 30 years (both inclusive) For Limited Premium Payment Term (LPPT) - 10 yrs, 15 to 30 years (both inclusive) For Single Premium (SP) - 5 years Max. Term: For Regular/Limited/Single Premium Option – 30 years Premium Payment Term For Regular Premium – Same as Policy Term For Limited Premium Payment Term (LPPT) Policy Term 10 year 15-30 years PPT 5 or 8 years 5 or 8 or 10 years Max: 65 years
For Single Premium – Single Payment Minimum For RP Rs. 30,000 For LPPT Rs. 40,000 ANNEXURE For SP Rs. 65,000 QUESTIONER FOR CUSTOMERS Premium Modes Single /Yearly Sum Assured Premium Amount (X 100) Maximum Rs. 1,50,000 Rs. 1,50,000 Rs. 1,50,000
Minimum: For Regular Premium (RP)3& LPPT For Ages below 45 yrs : Higher of {10 * Annual Premium (AP) or (0.5 * Term * AP)} For Ages 45yrs & above: Higher of {7 * AP or (0.25 X Term X AP)}
For Ages below 45 yrs: 1.25 * SP For Ages 45yrs & above: Fixed - 1.25 * SP Maximum: Particulars For Regular Premium For Limited Premium For Single Premium
Instructions to respondents Entry Age Below 45 yrs & Below 45 yrs Below 45 yrs above 45 possible. & 45 yrs 1. Please answer all the questions, i.e. to the maximum extentyrs above 2. Please be as accurate as possible in answering the questions. Sum Assured 20 * AP 20 * AP 20 * AP 15 * AP 5 * SP Benefits: 4. Any suggestions will be welcomed and would be appreciated. 1. Maturity Benefit: On completion of Policy Term, Fund Value will be paid. 2. Death Benefit: 1. Do you have any insurance policy taken? Higher of the Fund Value or Sum Assured ## is payable; with a minimum of Yes of total basic premiums paid## till the time of death. No 105%
3. kind Benefits: 2. WhatRiderof life insurance you are interested in? • Criti Care 13 Rider: Provides lump sum amount to take care of 13
3. If you do not know an answer or it does not apply to you please write, Not Applicable (NA).
Pension Critical Illnesses which include Cancer, Coronary Artery Bypass Graft plan ULIP’s Surgery, Heart Attack, Heart Valve Surgery, Kidney Failure, Major Endowment plan Children’s plan Burns, Major Organ Transplant, Paralysis, Stroke, Surgery of Aorta, Money back plan Term plan Coma, Motor Neurone Disease and Multiple Sclerosis. • Accidental Death Benefit Linked Rider: Provides additional death 3. Would you like any insurance agent to provide you more information on your choice? benefit if the death occurs as a result of an accident. •Yes Premium Payor Waiver Benefit Rider: In the event of the death of the No Proposer, the cover for the Life Assured under the base policy continues 4. Do you know the use/importance of insurance? and the future premiums under the base policy, payable during the rider Yes term, will be No by the Company. paid • • Income Sustainer Rider: Provides additional benefit in the case of death 5. Did you face any problems or consequences due to services provided by your insurer? or in the case of Total & Permanent Disability due to Accident or Yes No Sickness, whichever is earlier. A 25% of income sustainer benefit sum 6. Are you aware about? assured is paid upfront and 1% of income sustainer benefit sum assured Premium rate Administration is paid monthly in arrears for 10 years or till the end of the base policy charges term (capped at a maximum of 30 years) whichever is higher. Tax deductions Terms & Benefits of policy Death benefits
conditions 3. SBI Life - Saral Maha Anand Risk element Maturity benefit Introduction: 7. Are you aware about ULIP policy?
1 SBI Life - Saral Maha Anand, a unit linked insurance cum savings plan.
Getting a Life Insurance policy was never so easy…No medical examination, which means
at affordable costs, only for you. Key Features: No medical examination, Simple joining process#. Yes No • Liquidity through Partial Withdrawals. 8. What do you think about ULIP policy? • Guaranteed Additions## of up to 30% of one annual premium, for a 20 year Beneficial Nonpolicy term, subject to the Policy being in force till the maturity date. beneficial • Option to other traditional policies are Ulips policies more? to avail additional rider benefit under SBI Life - Accidental Death 9. Compared Benefit Linked Rider (UIN: 111A019V01) Riskier Less• 4 Fund options, to enjoy market related returns as per your risk appetite. risky • Twin Benefit of Market linked returns 10. What would you prefer for investment? & insurance cover. Mutual fund Ulips
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Personal Details: 1. Name:………………………………………………..………… 2. Age: 18-25 Male 26-35 36-60 Female 60+ 3. Gender:
Thank You So Much For Your Valuable Time and Responses!!! Product Snapshot: QUESTIONER FOR SBI ULIP Age at Entry ^ Minimum: 18 years
Maximum: 55 years
1. What Maturity Max. Age atis Unit Linked Insurance Plan? 65 years 2. Term Policy What are the different ULIPyears / provided /by your Insurance company? 10 plans 15 years 20 years 3. Among which Minimum Premium of it is sold more or has Rs. 15,000/Yearly : more demand? Amounts was the reason for Half-yearly : Rs. 9,500/-market? 4. What bringing such plans into (x100) Quarterly : Rs. 5,500/5. Are ULIP plans more beneficial/ profitable 2,000/Monthly : Rs. than other traditional plans? 6. Can Premium Maximum you explain the procedure of how:it works? Yearly Rs. 29,000/Amounts are the benefits of Half-yearly : Rs. 14,500/7. What these plans? (x100) Rs. 7,200/8. How do you confidence Quarterly buy: ULIP plans? people to Monthly : Rs. 2,400/9. What kind of response is an ULIP plan getting or the performance of ULIP plans in Premium Modes Yearly / Half-yearly / Quarterly / Monthly market? Sum Assured 10. What kind of challenges Minimum: is faced during marketing of this product? or completion Age below 45 years : 10 × AP Age 45 years or above : 7 × AP 1 Maximum: 20 × AP Partial Withdrawals Upto 15% of Fund Value can be withdrawn each year, from 6th
free in a policy year. Tax Benefits** Under Sec. 80C and Sec. 10(10D) of Income Tax Act,1961
Benefits:
1. Maturity Benefit:
On completion of Policy Term, Fund Value will be paid.
2. Death Benefit:
Higher of the Fund Value or Sum Assured* is payable; with a minimum of 105% of total basic premiums paid* till the time of death.
3. Rider Benefits:
Accidental Death Benefit Linked Rider: Provides additional death benefit if the death occursoasoaoresultoofoanoaccident.
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doc_419948441.docx
100 mark project
1. INTRODUCTION TO PROJECT
1.1 INTRODUCTION OF ULIP A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder. ULIP came into play in the 1960s and is popular in many countries in the world. In 1971 the Unit Trust of India offered the Unit Linked Insurance Plan. Out of insurance premium a small part of contribution was utilized for providing life cover and balance invested in units. As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In today's times, ULIP provides solutions for insurance planning, financial needs, and many types of financial planning including children’s marriage planning. In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument was challenged by the market regulator SEBI which took up the matter to the Supreme Court of India .The Indian government brought down curtains on the two-month long tussle between the regulators by ruling that Unitlinked Insurance Products (Ulips) will be governed by the Insurance Regulatory and Development Authority (IRDA) On 21ST December, 2005 in India. The main intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk is borne by the policyholder. 1.2 OBJECTIVES OF PROJECT
? To understand the concept of ULIP.
? To identify the scheme preference of investors.
? To show the wide range of investment options available in ULIP by explaining its various
schemes. ? To know how ULIP are differ from Traditional plans means how they give better returns than traditional plan. ? Gather and analyze the future aspirations of the customers with respect to the ULIP’s.
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1.3 THE SCOPE OF RESEARCH Researcher found the following scopes:
? To study the awareness among customers related to ULIP. ? Future prospect of ULIP. ? Importance of ULIP.
1.4 LIMITATION OF PROJECT STUDY Researcher found the following limitations:
? Many people are not aware and don’t have any idea about ULIP’s.
? The study is limited area only. ? Sample size taken is small and may not be sufficient to predict the results with 100% accuracy.
? Time was not sufficient to research.
1.5 METHODOLOGY OF THE STUDY The collection of data refers to a planned gathering of information relevant to the subject matter of the study from the units under investigation the method of collection of data depends mainly upon the nature, objective and scope of the inquiry on one hand and available of resources and time on the other hand. Data may be classified into primary and secondary data, depending upon the nature and mode of collection. Mainly the data is collected from: 1. Primary data 2. Secondary data 1) Primary data: Primary data is collected from the prospective customers, agents and the staff of SBI. And the collection of the data through interaction with various respondents. 2) Secondary data: Secondary data collected from the published magazines and websites to collect the data. The secondary data is collected from the following sources. ? Business magazines ? Journals ? Company broachers and books ? Published books
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? Website
2. INTRODUCTION OF INSURANCE
Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance is a safeguard against uncertain events that may occur in the future. It is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. It is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. Loss is paid out of the premium collected from people and the insurance companies act as trustees to the amount so collected. These companies have proposal forms which are filled to give details of insurance required. Depending upon the answers in the proposal from insurance companies assess the risk and decide on the premium. Insurance companies are risk bearers. They underwrite the risk in return for an insurance premium. the function of insurance is to provide protection, prevent losses, capital formation etc. hence insurance can be defined as a tool in which a sum of money as a premium is paid by the insured in consideration of the insurer’s bearing the risk of paying a large sum .it may also be
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defined as a contract wherein one party (insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given contingency against which insurance is required. Insurance industry commands massive funds through sales of insurance products to large number of clients. Insurers also create liabilities and commit themselves to compensate for losses occurring to the policyholders on future date. It also plays an important role in process of capital formation. 2.1 HISTORY OF INSURANCE SECTOR 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 Some of the importantgmilestonesgingtheglifeginsurancegbusinessgingIndiagare:1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurancegbusiness. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statisticalginformationgaboutgbothglifegandgnon-lifeginsurancegbusinesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protectinggtheginterestsgofgtheginsuringgpublic. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of generalginsurancegbusiness. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
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conductgforgensuringgfairgconductgandgsoundgbusinessgpractices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins andgthegTariffgAdvisorygCommitteegsetgup. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1 st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance CompanygLtd.gGICgincorporatedgasgagcompany.
2.2 PRINCIPLES OF INSURANCE 1. A large number of homogeneous exposure units: The vast majority of insurance policies are provided for individual members of very large classes. 2. Definite Loss: The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. 3. Accidental Loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. 4. Large Loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. 5. Affordable Premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered
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6. Calculable Loss: There are two elements that must be at least estimatable, if not formally calculable: the probability of loss, and the attendant cost. 7. Limited risk of catastrophically large losses: The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed.
2.3 FUNCTIONS OF INSURANCE 1. Primary function 2. Secondary functions 3. Other functions Primary functions:1.lProvide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. 2.lCollective bearing of risk: Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. 3.lAssessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. 4.lProvide Certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.
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Secondary functions:1.lPrevention of Losses: Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. 2.lSmall capital to cover larger risks: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. 3.lContributes towards the development of larger industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. Other functions:1.lMeans of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. 2. Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. 3.lRisk Free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.
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3. CONCEPT OF ULIP
3.1 INTRODUCTION OF ULIP Unit linked insurance plan (ULIP )is the Product Innovation of the conventional Insurance product. With the decline in the popularity of traditional Insurance products & changing Investor needs in terms of life protection, periodicity, returns & liquidity, it was need of the hour to have an Instrument that offers all these features bundled into one. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. ULIPs attempt to fulfill investment needs of an investor with protection/insurance needs of an insurance seeker. ULIPs work on the premise that there is class of investors who regularly invest their savings in products like fixed deposits (FDs), coupon-bearing bonds, debt funds, diversified equity funds and stocks. There is another class of individuals who take insurance to provide for their family in case of an eventuality. So typically both these categories of individuals (which also overlap to a large extent) have a portfolio of investments as well as life insurance. ULIP as a product combines both these products (investments and life insurance) into a single product. This saves the investor/insurance-seeker the hassles of managing and tracking a portfolio of products. Presently there are 200 plus ULIP Schemes in the market. ULIPs offer a variety of options to the individual depending on his risk profile. For instance, an individual with an above-average risk appetite can choose a ULIP option that invests upto 60% of premium in equities. Likewise, an individual with a lower risk appetite can select a ULIP that invests up to 20% of premium in equities. 3.2 DEFINITION “A type of insurance vehicle in which the policyholder purchases units at their net asset values and also makes contributions toward another investment vehicle. Unit linked insurance
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plans allow for the coverage of an insurance policy, and provide the option to invest in any number of qualified investments, such as stock, bonds or mutual funds”. 3.3 CONCEPT OF ULIP Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the benefits of protection and flexibility in investment. It is a solution which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time . The investment is denoted as unit and is represented by the value that it has attained called as Net Asset Value (NAV).
UNDERLYING UNITS INVESTMENT IN UNIT LINKED FUNDS INSURANCE POLICIES
ULIP came into play in 1960s and became very popular in Western Europe and America. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers to the clients. As time progressed the plans were also successfully mapped along with life insurance needs to retirement planning. In today’s times ULIP provides solution for all the needs of a client like insurance planning, financial needs, financial planning for children’s future and retirement planning.
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LIFE PREMI LESSCOVER CHARGE UM
3.4 STRUCTURE OF ULIP
INVESTMENT REPRESENTED AS UNITS
3.5 ADVANTAGES AND DISADVANTAGES OF ULIP ADVANTAGES OF ULIP The advantages of ulip are given below: 1.lFlexibility: ULIPs offer a complete selection of high, medium and low risk investment options under the same policy. You can choose an appropriate policy according to your risk taking appetite, coupled with the opportunity to switch between fund options without any additional expense for specified number of switches. ULIPs provide the flexibility to choose the sum assured and investment ratio in the annual targeted premium. It also offers the flexibility of one time increase
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in investment portfolio, through top-ups to avail investment opportunity offered by external environment or own income flows. 2.lTransparency: The charge structure, value of investment and expected IRR based on 6% and 10% rate of returns, for the complete tenure of the policy are shared with you before you buy a product. Similarly, the annual account statement, quarterly investment portfolio and daily NAV reporting, ensures that you are aware of the status of your investment portfolio at all times. Most companies publish latest NAVs on their respective websites on a daily basis. 3.lLiquidity: To cope with unforeseen circumstances, ULIPs offer the benefit of partial withdrawal; wherein after 5 years you can withdraw funds from our Unit Linked account, retaining only the stipulated minimum amount. 4.lRegularlsavings: ULIPs help you inculcate a regular saving habit. Also, the average unit costs tend to be lower than one time investment. 5.lMultiplelbenefits: ULIP is an outstanding solution for risk cover, long term investments with the benefit of various investment opportunities, coupled with tax benefits. 6.lSpreadloflrisk: ULIPS are ideal for those investors who wish to avail the benefit of market linked growth without actually participating in the stock market, with the added benefit of risk-cover. DISADVANTAGES OF ULIP Ulip have their following drawbacks: 1.Flexibility: This can act a disadvantage since the person may use the withdrawal and may not end up building a huge corpus. 2.Initially heavy costs: You pay around 15-20% for the first year and then around 5%for the next two year 3.6 TYPES OF ULIP
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ULIP offers is that whatever be your specific financial objective, chances are that there is a ULIP which is just right for you. The figure below gives a general guide to the different goals that people have at various age-groups and thus, various life-stages.
3.7 COMPARISION OF ULIP WITH TRADITIONAL PLAN
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Unit Linked Insurance Product: ULIPs have gained high acceptance due to attractive features they offer. These include: ? Flexibility ? Flexibility to choose Sum Assured. ? Flexibility to choose premium amount. ? Option to change level of Premium /Sum Assured even after the plan has started. ? Flexibility to change asset allocation by switching between funds ? Transparency ? Charges in the plan & net amount invested are known to the customer ? Convenience of tracking one’s investment performance on a daily basis. ? Liquidity ? Option to withdraw money after few years (comfort required in case of exigency) ? Low minimum tenure. ? Partial / Systematic withdrawal allowed ? Fund Options ? A choice of funds (ranging from equity, debt, cash or a combination) ? Option to choose your fund mix based on desired asset allocation Traditional Plans : These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: ? Steady Investment ? Major chunk of investible funds are in debt instruments ? Steady and almost assured returns over the long term ? Features
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? Death benefit is Sum Assured + guaranteed & vested bonus ? Helps in asset creation as they are for a long tenure ? Premium to Sum Assured ratios are fixed for each plan and age. ? Generally withdrawals are not allowed before maturity.
Point of difference Investment Transparency in costs Flexibility in payment Assured Bonus Assured Sum on survival Option to increase investment/premium
ULIP Market related (May be stock market or debt market) Yes Yes No No Yes
Traditional Policy IRDA? Determined investments No No Yes Yes No
4. INVESTMENT OF ULIP IN MARKET
4.1 HOW TO CHOOSE ULIP
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The wide range of ULIPs available in the market might make it difficult for a consumer to choose the correct ULIP. However, follow a few simple steps choosing the right ULIP can be a smooth process. 1.lFocuslonlrequirementslandlrisklprofile: Identify a plan that is best suited for keeping in mind risk appetite. In case have a high-risk appetite, opt for a more aggressive fund option (an option that invests higher percentage in equities) and vice versa. 2.lUnderstandlthelpeculiaritiesloflthelplan: Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, fund management charges and mortality charges. 3.lExaminelthelperformanceloflthelplan: Compare the performance of the plan with benchmark indices like BSE Sensex or Nifty in the past two or three years to get a better idea about the performance. Ensure that you can easily get information about your NAV when you need it. Thoroughly understand the flexibility and redemption conditions of an ULIP. 4.lUnderstandlthelchargeslleviedlonlthelproduct: Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, the fund management charges and mortality charges. 5.lComparelULIPlproductslofldifferentlinsurancelcompanies: Compare products of different insurance companies in terms of premium payments, cost structure, performance of the scheme (equity as well as debt schemes), additional facilities such as top-up premium and free switch between different fund options, flexibility in terms of increasing or decreasing protection, reporting structure and flexibility in redemption. 6.lKnowlaboutlthelCompany: Last but not least, insure with a brand can 2 trust to honor its commitment and service in accordance to requirements.
In the process of deciding which ULIP to invest in; or a unit linked insurance policy to secure important financial goals there are some key principles which should govern any decision related to ULIPs. Adhering to these key principles will allow you to make optimum utilization of your ULIP. 1.Appropriate Life Cover: 1) Insurance policy taken: Unit Linked Insurance (ULIP) plans are designed to help to meet financial goals by ensuring the value of investments, or nominee sum assured, which is the life cover of policy. To make sure that ULIP is truly working to assure goal, choose a life cover that provides family with adequate This analysis shows security even in absence, so thatalready had life goals of family are even finances and hence that about 98% of investors were important insurance policy taken, always though a 2% of investors were not having insurance taken. secured. Let us take the example of a 35-year-old man with 2 young children. He could begin with a sum assured of Rs 5 lakh. As the children grow and thereby the financial liabilities increase, he might want to increase the level of protection, which can be done by increasing his sum assured. 2. Right Fund Option: 2) Percentage of people interested in different policy: • Unit-Linked Insurance Plans (ULIPs) come with an in-built range of fund options to choose from – ranging from aggressive funds (primarily invested in equities with the general aim of capital appreciation) to conservative funds (invested in cash, bank deposits, and money market instruments with thethat the approximately % of peoplethat to invest various policy. Pension and This analysis shows aim of capital preservation) – so interested in money in line with market outlook, time horizon, and investment preferences and needs. If there have a highthat familiar money back were more famous amongst customers of 30-40 years. Ulips were not risk appetite, should opt for a more aggressive investment option, and vice versa. and did not have good response. Additionally also have the advantage of switching fund options to make investments work in tandem with the market. These days, various ULIPs also offer the options of life stage funds which keep dynamically altering themselves without having to do any monitoring. 3. Long Term Investment: Unit-Linked Insurance Plans (ULIPs) are meant to guarantee financial goals over the long3) Percentage of people interestedtool, they will not give considerable return on investments, term. As a short term investment in knowing more from agent: because of a product cost structure which is higher in the initial years. However, overall charge structure for the term comes down substantially over a long period of time thus allowing greater allocation of premium in the chosen funds. Also in long term investment in ULIPs are less affected by temporary market fluctuations since data shows that over a long-term, market 3 linked investments not only yield very attractive returns, but also have the least downside to them. To get the best out of your ULIP, you should remain invested in the ULIP for the long-term of at least 8-10 years. This way, investment will
goals. 4. Know the Charges: Unit-Linked Insurance Plans (ULIPs) are designed to meet two of the most important This analysis shows that large amount of customers werebenefits have know through agents what financial needs: protection and investment. Both these interested to some charges attached to their policy werecharges to does itabout before purchasing a ULIP are: them; important and what know has. • • • • Premium Allocation charge Policy Administration charge Mortality charge Fund Management charge
The important thing to note about ULIPs is that the overall charge structure in the long term comes down substantially, thus allowing greater allocation of premium to chosen fund, thereby 4) Percentage of people knowing use/importance of insurance: right to revise the fees and leading to wealth creation. It may be noted that insurers have the charges over a period of time. 5. Know the Features: Unit-Linked Insurance Plans (ULIPs) offer a variety of features and benefits that no other This analysis shows that in does. Most ULIPs are rich in features such as top up, switch between single financial instrument this competitive world majority of people know the importance of insurance and its need in this very unpredictableduring the term of the policy, cover continuance funds, increase or decrease the protection level world. option, surrender options & range of riders which can be attached to the main policy to provide added protection. As with all other products, the exact features of a Unit Linked Insurance Policy differ from one product to another. Always insist on seeing the brochure so that customer can make right choices of ULIP to secure goals – be it retirement planning, planning for your children’s education, or wealth creation.
5) Percentage of UNDER ULIPproblem due to service provided by insurers: 4.3 CHARGES people facing 1. Contribution related charges: These are the charges that are represented as a percentage of the regular or single contribution This analysis shows that the 14% of customersit is usually highwere very minute likepay for the paid. In case of a regular contribution plan, facing problems in the first year to calls don’t get received cost. Thisnot reaching infor the issuance and for satisfied withcommissions. These distribution or policy charge pays time. Whereas others are distribution insurers. charges are running for the policy. 2. Administrative charges: These are charges that are levied for the administration of the policy and the related cost of
3 administration of the insurance company, itself. They are more related to the cost like IT,
operational, etc cost of continuing the policy.
These are the charges for buying and selling debt and equity. These are the charges are adjusted in NAV itself. 4. Mortality charges: This covers the cost of providing life protection for the insured and may be paid once at the start of the policy for a recurrent manner for example this charges levied to provide the insurance cover under the plan. Normally these charges are one year charges as per the age of the holder. 5. Rider charges: Rider charges are similar in nature to the mortality charges as they are levied to pay for the other protection benefits that the policy holder has chosen for- like the critical illness benefit or the accident benefited. 6. Surrender charges: When the policy holder decides to surrender the policy or partially withdraw some of the units 6) Percentage of people aware about: for cash, a surrender charge may be apply. Surrender charges are used to cover initial expenses that have been incurred by the company but not yet recovered from the policyholder yet. 7. Bid offer charges: In ULIP specifically certain insurers might create a difference in the price at which they sell the unit and the price at which they buy the units. Investor’s contributions are used to buy units in This analysis shows that some left the whole space blank or vice a versa, customers taking policy the investment fund at the offer price and are sold when benefits are required at the bid price. know majority the premium they pay or the sum of premium. Even the reason for taking The difference between the offer and bid prices Is known as the “bid-offer spread", this is used insurance tax deduction is well known. to cover expenses when setting up the policy. 8. Transactional specific charges: These charges are levied when the client does some specific transaction like changing funds topping up the investment component or withdrawals.
7) Percentage of people aware about ULIP policy: 4.4 HISTORY OF ULIP • • ULIP came into play in 1960 and is popular in many countries in the world today. In 1971 the Unit Trust of India offered the Unit Linked Insurance Plan. Out of insurance premium a small part of contribution was utilised for providing life cover and blance invested in units.
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Unit linked guidelines notified by IRDA on 21st December, 2005 in India. The main 3 intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk
This analysis shows that 54% of people aware about ULIP policy and 46% of people did not aware about ULIP policy.
6. SBI ULIP
6.1 STATE BANK O OF INDIA SBI Life Insurance Company Ltd has been launched SBI Life Smart Ulip plan.Smart ULIP is a hybrid of premium security and guaranteed returns plan.This plan is available for a limited time. SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2000 crore and a paid up capital of Rs 1000 crore. SBI Life – Smart ULIP is thinking ULIP policycustomer needs, and will give not only guarantee 8) Percentage of people the perfect answer to is: on selected net assets over the first seven years, but also provides the added attraction to participate in the market on its head. This is an investment cum insurance plan for market returns. SBI Life manage the investment, by giving maximum room for growth while protecting investments against adverse market conditions. This plan also provides 62% of customers are getting beneficial of ULIP policies and 38% ofpay The analysis shows that a convenient shorter premium paying term allows customers to customers for a limited period of either three orULIP years, and use the tax benefits u / s 80 C and premiums are not getting non-beneficial about five policies. 10 (10 D) of the income tax law. 6.2 VISION, MISSION AND VALUES VISION To be the most Preferred ULIP. SBI Life Insurance Company Ltd. manages the activities of SBI unit linked insurance product in India. The ULIPs organization offers a variety of schemes to Indian customers. SBI Life Insurance has several offices located across the country of India. The corporate head office of SBI life Insurance is situated in Mumbai.
MISSION To emerge as the leading company offering a comprehensive range of life insurance and pension 9) Compared to other traditional policies is ULIP policy more: products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalizationlperiod. VALUES
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Ambition Innovation Dynamism Excellence
6.3 CORPORATE OFFICE ADDRESS This Life Insurance Co. Ltd, SBI analysis show that customer find that ULIP policy is more risky than other traditional 2nd Floor, Turner Morrison Bldg, polices. G. N. Vaidya Marg, Fort, Mumbai 400 023. NAME AND ADDRESS OF REGISTRAR Shri. Rajkumar Raina Head- Client Relationship SBI Life Insurance Co. Ltd. Central Processing Centre Kapas Bhavan, Plot 3A, Sector -10, CBD Belapur, Navi Mumbai – 400614 Tel: 022- 66456241 Email: [email protected]
10) DIRECTORS people refers: 6.4 Percentage of SBI Life Insurance Co. Ltd. 1. Shri.Geethanjali Deokar, Deputy Manager 2. Shri.Parag Gautam,Regional Manager This analysis show that even though people knowing about ulip policies are taking mutual funds 3. Shri.Pankaj Parashar,Assistant gold. as option for investment or they opt forManager 4. Shri,Raj bahadur, Agency Manager 6.4 PRODUCTS OF SBI LIFE INSURANCE
1. SBI Life - Smart Performer
Introduction: The equity market may have its ups and downs, but you now have a protective shield that will safeguard your investments, while providing upside potential. SBI Life brings you ’Smart Performer’, a unique Unit Linked, Non Participating insurance product that offers you the twin benefits of ’Higher than the Highest’ of the daily NAV Guarantee and the prospect of market upside. What’s more, it also allows you to protect your gains through Automatic Rebalancing facility and offers you a choice of Single and Limited Premium Payment options. Key Features:
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Guarantee at maturity based on ‘5% Higher than Highest Guaranteed NAV’ during the first seven years or prevailing NAV at Maturity, whichever is higher, subject to conditions#.
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Enjoy the best of both worlds - Guarantee only or Guarantee and Market Upside through our unique Plan offerings - ‘Secure Plan’ and ‘Secure N Grow Plan’ respectively ‘Automatic Rebalancing’ to Lock-in your gains
8. FINDING, RECOMMENDATION(SP) or 5 year Premium Paying Term (PPT) • Convenience through single premium AND CONCLUSION
• Life Insurance coverage with minimum Sum Assured of 10 times or 7 times of your 8.1 FINDINGS Annualised Premium (AP), based on your age. • •
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Liquidity people prefer Withdrawal(s) ? Mainlythrough Partial pension plan, endowment plan, money back plan, children plan, Option toplan but the percentage of people invest in ULIP is low as compare to other term customize the product with Accidental Death Benefit Attractive Tax benefits under the Income Tax Act, 1961, subject to conditions ** plans. ? Mainly people prefer low growth safe return as compare to high growth some risky
Product Snapshot: return.
? People mainly purchase life insurance policy for investment and then for tax-saving
Age at Entry* give 2nd preference toMin: 9 years they protection.
Max: 65years
Age at? Many people did not aware aboutyearspremium, terms & conditions, risk elements, Maturity Max: 75 the Premium administration charges etc. or 5 years Payment Term SP Yearly Rs MinimumWhile studying the Researcher find that, 50,000 ? Limited Premium customer is not aware about ULIP policy Half-yearly Rs 44,000 Amounts (X 100) because 54% of people aware about ULIP36,000 Quarterly Rs policy. Monthly Rs 20,000 ? While studying the Researcher finds that, 62% of people are thinking that ULIP Minimumpolicy is beneficial(X other60,000 customer thinks that this policy is not beneficial Single Premium and Rs 38% of No limits 100) for their investments. Maximum Limited/Single Premium While studying the Researcher find that, customer think that ULIP policy is more ? Amounts risky Policy Term than the other traditional policiesthe start arethe subscription period. to ULIP 10 years from which of less risky as compared Premium policy. Modes Single / Yearly / Half-yearly / Quarterly / Monthly Sum Assured studying the Researcher find that, even PPT Age/PPT For 5 yr though customer knows about ULIP For SP ? While policies are taking mutual funds as Minimum Maximum Minimumthey opt for an option for investment still Maximum separately for mutual funds, gold45 other investments. Below and 10 * AP 20*AP Yrs 8.1 RECOMMENDATION Between 45yrs & 60yrs 7 * AP 20*AP 1.25*SP 1.25*SP 5*SP 5*SP
61 yrs and 7 * AP 7 * AP 1.25*SP 1.25*SP ? Create awareness about Unit Linked Insurance Plan. above ? Even Plan Options today the product awareness of ULIP policy is much less among its segmented 2 Plan Options: 1. .It should - All your distribution network to a more people or potential customersSecure Plan explore itsfunds would be invested in the Daily Protect Fund 2. Secure2 Grow Plan - 80% of your funds would be N invested in the Daily Protect Fund and 20% would be invested in the Index Fund
Benefits: 1 Maturity Benefit: . On completion of Policy Term, Maturity Value will be paid. Maturity wider for the Daily Protect Fund will be calculatedthe product in awhich is value extent and make the customer understand based on NAV more easier way higher of:through its agents to its customer. Prevailing NAV as on date of Maturity OR ?• Advisors needed to be well aware of plans provided by other private players, not only plans provided by LIC. So that There will be an valuable information to • ofHigher than Highest Guaranteed NAV: they can provideincrement of 5% to the Highest NAV them towards the first seven targeting only LIC only while customers, to switch achieved duringus instead of years under the ‘Daily Protect Fund’. discussion with customers. 2 Death Benefit: ? In case of (safe investment plan II), our policy administration charges are much more . Higher of the Fund Value or Sum Assured## is payable; subject to a minimum of than other competitors throughout the period, which don’t allow us to perform more 105% of the total premiums paid## at the time of death. The death benefit is payable efficiently and real growth of policy don’t match with the growth rate for which we only for inforce policies. are known in the market, our policy administration charges are based on premium 1. Accidental Death Benefit Option: level. Accidental Death Benefit: Provides additional death benefit if the death ?occursoasoaoresultoofoanoaccident. as a short term investment plan and hence for the ULIP is a costly instrument if taken benefit for the customer he should be made convinced for long term investment through agents so that people do not take it as a former plan and think being deceived
1. SBI Life company. by the - Unit Plus® Super
? The marketing of these products should be done by the sales person by visiting to Introduction: different companies and inform the employees of their company during the lunch SBI Life – hour or breaks. is a flexible non participating Unit linked insurance Plan, specially Unit Plus Super designed to meet your changing requirements at various stages of life. With a wide array of funds, riders and other options, this product gives you the complete freedom to fulfill all your 8.1 CONCLUSION investment and insurance needs. And that’s not all; we now also offer you guaranteed additions In India, insurance is generallygiving you far superior value. device instead of its other implied and choice of payment options, considered as a tax-saving long-term financial benefits. Indian people are prone to investing in properties and gold followed by banks deposits. They selectively invest in shares also but the percentage is very small—4.5%. Even to this day, Life insurance market has become more vibrant. Smashing all doubts over the decision to liberalize the industry, the overwhelming first year performance of the Indian Key Features: insurance sector is test case of a massive success story of private players entering into the erstwhile state monopoly. • Guaranteed Additions# of up to 75% of one annual regular premium on a regular premium policy, for a 30 year policy term, subject to the Policy • • • • • • being in force till the maturity date. No Policy Administration fee for first 5 years for Regular and Limited Premium Paying Term (LPPT) plans, thereby boosting your fund value No Premium Allocation Charge from 11th year onwards 3 Guaranteed Additions starting as early as 10th policy year onwards Enhanced investment opportunity through 9 varied Fund Options including P/E Managed Fund, Index Fund & Top 300 Fund Option to pay Regular/Limited/ Single Premium; Switch or Redirect your
BIBLIOGRAPHY
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premiums Flexible product with an option to increase/decrease your Sum Assured from 6th year onwards Life Insurance coverage, with minimum Sum Assured, based on your age Liquidity through Partial Withdrawals. Option to customize the product with a wide range of riders: SBI Life Criti Care 13 Rider (UIN: 111A018V01), SBI Life - Accidental Death
Benefit Linked Rider (UIN: 111A019V01), SBI REPORTS, JOURNALS, NEWSPAPER, MAGAZIES: Life - Premium Payor Waiver Benefit Rider (UIN: 111A017V01) and SBI Life - Income Sustainer Rider (UIN: 111A020V01). 1. Newsweek 2. Business Today 3. Business World WEB SITES www.moneycontrol.com www.insuranceview.com www.lifeinscouncil.org Product Snapshot: www.iba.ie www.statebankofindia.com Age at Entry* Min: www.outlookindia.com 7 years Age at Maturity Policy Term 75 years Min. Term: For Regular Premium (RP) -10 yrs, 15 to 30 years (both inclusive) For Limited Premium Payment Term (LPPT) - 10 yrs, 15 to 30 years (both inclusive) For Single Premium (SP) - 5 years Max. Term: For Regular/Limited/Single Premium Option – 30 years Premium Payment Term For Regular Premium – Same as Policy Term For Limited Premium Payment Term (LPPT) Policy Term 10 year 15-30 years PPT 5 or 8 years 5 or 8 or 10 years Max: 65 years
For Single Premium – Single Payment Minimum For RP Rs. 30,000 For LPPT Rs. 40,000 ANNEXURE For SP Rs. 65,000 QUESTIONER FOR CUSTOMERS Premium Modes Single /Yearly Sum Assured Premium Amount (X 100) Maximum Rs. 1,50,000 Rs. 1,50,000 Rs. 1,50,000
Minimum: For Regular Premium (RP)3& LPPT For Ages below 45 yrs : Higher of {10 * Annual Premium (AP) or (0.5 * Term * AP)} For Ages 45yrs & above: Higher of {7 * AP or (0.25 X Term X AP)}
For Ages below 45 yrs: 1.25 * SP For Ages 45yrs & above: Fixed - 1.25 * SP Maximum: Particulars For Regular Premium For Limited Premium For Single Premium
Instructions to respondents Entry Age Below 45 yrs & Below 45 yrs Below 45 yrs above 45 possible. & 45 yrs 1. Please answer all the questions, i.e. to the maximum extentyrs above 2. Please be as accurate as possible in answering the questions. Sum Assured 20 * AP 20 * AP 20 * AP 15 * AP 5 * SP Benefits: 4. Any suggestions will be welcomed and would be appreciated. 1. Maturity Benefit: On completion of Policy Term, Fund Value will be paid. 2. Death Benefit: 1. Do you have any insurance policy taken? Higher of the Fund Value or Sum Assured ## is payable; with a minimum of Yes of total basic premiums paid## till the time of death. No 105%
3. kind Benefits: 2. WhatRiderof life insurance you are interested in? • Criti Care 13 Rider: Provides lump sum amount to take care of 13
3. If you do not know an answer or it does not apply to you please write, Not Applicable (NA).
Pension Critical Illnesses which include Cancer, Coronary Artery Bypass Graft plan ULIP’s Surgery, Heart Attack, Heart Valve Surgery, Kidney Failure, Major Endowment plan Children’s plan Burns, Major Organ Transplant, Paralysis, Stroke, Surgery of Aorta, Money back plan Term plan Coma, Motor Neurone Disease and Multiple Sclerosis. • Accidental Death Benefit Linked Rider: Provides additional death 3. Would you like any insurance agent to provide you more information on your choice? benefit if the death occurs as a result of an accident. •Yes Premium Payor Waiver Benefit Rider: In the event of the death of the No Proposer, the cover for the Life Assured under the base policy continues 4. Do you know the use/importance of insurance? and the future premiums under the base policy, payable during the rider Yes term, will be No by the Company. paid • • Income Sustainer Rider: Provides additional benefit in the case of death 5. Did you face any problems or consequences due to services provided by your insurer? or in the case of Total & Permanent Disability due to Accident or Yes No Sickness, whichever is earlier. A 25% of income sustainer benefit sum 6. Are you aware about? assured is paid upfront and 1% of income sustainer benefit sum assured Premium rate Administration is paid monthly in arrears for 10 years or till the end of the base policy charges term (capped at a maximum of 30 years) whichever is higher. Tax deductions Terms & Benefits of policy Death benefits
conditions 3. SBI Life - Saral Maha Anand Risk element Maturity benefit Introduction: 7. Are you aware about ULIP policy?
1 SBI Life - Saral Maha Anand, a unit linked insurance cum savings plan.
Getting a Life Insurance policy was never so easy…No medical examination, which means
at affordable costs, only for you. Key Features: No medical examination, Simple joining process#. Yes No • Liquidity through Partial Withdrawals. 8. What do you think about ULIP policy? • Guaranteed Additions## of up to 30% of one annual premium, for a 20 year Beneficial Nonpolicy term, subject to the Policy being in force till the maturity date. beneficial • Option to other traditional policies are Ulips policies more? to avail additional rider benefit under SBI Life - Accidental Death 9. Compared Benefit Linked Rider (UIN: 111A019V01) Riskier Less• 4 Fund options, to enjoy market related returns as per your risk appetite. risky • Twin Benefit of Market linked returns 10. What would you prefer for investment? & insurance cover. Mutual fund Ulips
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Personal Details: 1. Name:………………………………………………..………… 2. Age: 18-25 Male 26-35 36-60 Female 60+ 3. Gender:
Thank You So Much For Your Valuable Time and Responses!!! Product Snapshot: QUESTIONER FOR SBI ULIP Age at Entry ^ Minimum: 18 years
Maximum: 55 years
1. What Maturity Max. Age atis Unit Linked Insurance Plan? 65 years 2. Term Policy What are the different ULIPyears / provided /by your Insurance company? 10 plans 15 years 20 years 3. Among which Minimum Premium of it is sold more or has Rs. 15,000/Yearly : more demand? Amounts was the reason for Half-yearly : Rs. 9,500/-market? 4. What bringing such plans into (x100) Quarterly : Rs. 5,500/5. Are ULIP plans more beneficial/ profitable 2,000/Monthly : Rs. than other traditional plans? 6. Can Premium Maximum you explain the procedure of how:it works? Yearly Rs. 29,000/Amounts are the benefits of Half-yearly : Rs. 14,500/7. What these plans? (x100) Rs. 7,200/8. How do you confidence Quarterly buy: ULIP plans? people to Monthly : Rs. 2,400/9. What kind of response is an ULIP plan getting or the performance of ULIP plans in Premium Modes Yearly / Half-yearly / Quarterly / Monthly market? Sum Assured 10. What kind of challenges Minimum: is faced during marketing of this product? or completion Age below 45 years : 10 × AP Age 45 years or above : 7 × AP 1 Maximum: 20 × AP Partial Withdrawals Upto 15% of Fund Value can be withdrawn each year, from 6th
free in a policy year. Tax Benefits** Under Sec. 80C and Sec. 10(10D) of Income Tax Act,1961
Benefits:
1. Maturity Benefit:
On completion of Policy Term, Fund Value will be paid.
2. Death Benefit:
Higher of the Fund Value or Sum Assured* is payable; with a minimum of 105% of total basic premiums paid* till the time of death.
3. Rider Benefits:
Accidental Death Benefit Linked Rider: Provides additional death benefit if the death occursoasoaoresultoofoanoaccident.
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