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A STUDY ON UNIT LINKED INSURANCE PLANS AT KOTAK
LIFE INSURANCE, HYD 1YASWADA BHARATH,
2Mr. K. PRAVEEN KUMAR
1MBA Student,
2Assistant professor
DEPARTMENT OF MBA
MALLA REDDY INSTITUTE OF ENGINEERING AND TECHNOLOGY,MAISAMMAGUDA,
SECUNDRABAD
ABSTRACT
Unit Linked Insurance Plan (ULIP) is a disaster
protection plan which accommodates the advantage
of hazard spread just as adaptability in speculation.
The interest in ULIPs is meant as unit and is spoken
to by the worth called Net Asset Value (NAV). In a
ULIP, the measure of premium to be contributed in
the wake of deducting for all charges and premium
for hazard spread are pooled together to frame a
reserve. The estimation of reserve whenever is
equivalent to the measure of units increased by
estimation of unit around then.
The presentation of Unit Linked Insurance Plans has
conceivably been the single biggest advancement in
the field of life coverage .It has tended to and
conquered numerous challenges and concern s that
clients had about disaster protection – liquidity,
adaptability, and straightforwardness.
These advantages are conceivable on the grounds that
ULIPs are contrastingly organized items and leave
numerous decisions to the policyholder. They are
organized with the end goal that the assurance
(insurance) component and the reserve funds
component (venture) can be recognize and
consequently overseen as indicated by one's
particular needs, offering adaptability and
straightforwardness. Along these lines we can say it
is such an item, that deals with various needs. There
were a few variables which gave section for ULIPs in
the insurance advertise: - Firstly was the entry of
private of private players, and ULIPs were the most
critical advancement done by them, and besides was
the decrease of guaranteed returns in gift plans. Other
than this as the financial exchanges were blasting
which currently has turned into the essential factor.
As referenced before upgraded adaptability and
converging of venture and insurance in a solitary
substance that have truly charmed them to people.
Early the market of ULIPs was taken up kotak life;
they were the first to catch the market in this field.
These are the insurance plans which are appended to
Units – Mutual Funds. The top notch sum got in this
strategy, some part is utilized in venture of assets and
remaining is utilized for insurance spread. ULIPs are
surprisingly like, shared store regarding structure and
working: premium installments are changed over into
units and net resource esteem (NAV) is proclaimed
routinely. Financial specialists have a choice of
picking their store as per their hazard taking capacity.
They un cover all the material certainties most
continuous and steady (regularly quarterly or half-
yearly) .Also financial specialist has a genuinely
smart thought about costs.
I. INTRODUTION
ULIP is a life coverage item, which gives hazard
spread to the arrangement holder alongside venture
alternatives to put resources into any number of
qualified speculations, for example, stocks, securities
or shared assets. As a solitary incorporated plan, the
venture part and the insurance part can be overseen as
per explicit needs and decisions.
In Unit Linked Insurance Plans(ULIP), the
ventures made are liable to dangers related with the
capital markets. This speculation hazard in venture
portfolio is borne by the strategy holder. In this
manner, you should settle on your speculation
decision subsequent to thinking about your hazard
craving and needs.
Another factor that you have to consider is
your future requirement for assets. Kotak Life offers
you an assortment of unit-linked insurance items to
suit your objectives - be it for your retirement
planning, for your wellbeing, for your youngster's
training and marriage or for venture purposes.
The individuals who wish to intently follow
their speculations: Unit linked insurance plans enable
arrangement takers to intently screen their portfolios.
They likewise offer the adaptability to switch your
capital between assets with changing danger return
profiles.
People with a medium to long haul
speculation skyline: ULIPs (Unit Linked Plans) are
perfect for people who are prepared to remain
contributed for generally significant lots of time.
Financial specialists over all life stages : This plan
class offers an assortment of plans which can be
settled on relying on the existence organize you are in
and your needs and budgetary liabilities by then.
In a Unit Linked Plan (ULIP), the premiums
you pay are put resources into the assets picked by
you subsequent to deducting designation charges and
charges including those for overseeing reserves,
strategy organization and for giving insurance spread
are deducted from the assets by dropping certain
units.
The estimation of every unit of a store is
controlled by isolating the all out estimation of the
reserve's speculations by the all out number of units.
Market linked returns : Unit linked plans offer you a
chance to win showcase linked returns as a
component of the premiums are put resources into
market linked finances which put resources into
various market instruments including obligation
instruments and value in changing extents.
Life assurance, Investment and Savings :
Unit linked plans offer the twin advantages of extra
security and reserve funds at market-linked returns.
Along these lines, you have the opportunity to
contribute your cash to gain higher returns, while
dealing with your security needs. Putting resources
into unit linked plans instills a normal propensity for
sparing and contributing, which is significant for
structure riches over the long haul.
Adaptability: Unit Linked Plans offer you a wide
scope of adaptable alternatives, for example, The
choice to switch between speculation assets to
coordinate your evolving needs.
The office to mostly pull back from your
store, subject to charges and conditions. Single
premium options to empower the approach holder to
contribute extra wholes of cash (well beyond the
customary premium) as and when wanted, subject to
conditions.
Single Premium : The approach holder is required to
pay the whole premium sum as a single amount
toward the start of the strategy term.
Normal Premium Payment (yearly, semi-every year
or month to month) : The approach holder needs to
pay the pre-decided premium sum intermittently for
example every year, semi every year or month to
month, contingent on the excellent installment term
selected.
Number of Premium Paying Years : This relies
upon the term of the approach that you have picked.
Much of the time, the strategy term and the quantity
of premium paying years (if there should arise an
occurrence of ordinary premiums) are the equivalent.
Nonetheless, a few approaches give the guaranteed
the alternative of picking the quantity of premium
paying years.
NEED FOR THE STUDY
To begin with, ULIPs serve the purpose of
providing life insurance combined with savings at
market-linked returns. To that extent, ULIPs can be
termed as a two-in-one plan in terms of giving an
individual the twin benefits of life insurance plus
savings. This is unlike comparable instruments like a
mutual fund for instance, which does not offer a life
cover.
ULIPs offer a lot more variety than
traditional life insurance plans. So there are multiple
options at the individual's disposal. ULIPs generally
come in three broad variants:
Although this is how the ULIP options are generally
designed, the exact debt/equity allocations may vary
across insurance companies
SCOPE OF THE STUDY
The scope of the study is limited to different
life insurance schemes of KOTAK LIFE. The present
study has taken to observe the returns of ULIPs for a
period of three months (i.e. from 01.01.2019 to
31.03.2019).
OBJECTIVES OF THE STUDY
To study some of the Unit Linked Insurance
plans of KOTAK Life Insurance.
To study the benefits Unit Linked Insurance
Policies (ULIPS).
To determine which investment option
(ULIPS) would bring out maximum returns
for an investor in short run and long run.
II. RESEARCH METHODOLOGY
Data collection: The information needed to further
proceed in the project information had collected
through secondary data.
Secondary data: The information collected from
already available records is called the secondary data.
The information collected for the corporate profile
and product profile from the past records of the
company are secondary data.
Formulae:
Standard deviation (σ) = √∑D2/(n-1)
Sharpe Performance Ratio=( ri-rf)/
LIMITATIONS OF THE STUDY
The main limitation of the study is the
availability of time. As the sufficient time was not
available for analysis of data.
As the study was restricted to the Unit
Linked Insurance Plans of Kotak Life only.
III. LITERATURE SURVEY
Muhammed Thayyib. K(2017) This Research paper
surveys the possibilities of ULIP insurance strategy
in India. Paper features the which means and
significance of ULIP in insurance segment. The
paper likewise specifies that whether the individual
ULIP reserve plan has beated or failed to meet
expectations with the speculation. It indicate an
examination among the ULIP reserve plans
dependent on the risk bearing limit and anticipated
return of the financial specialist.
Karuna (2009) featured on 'Importance of ULIPs as a
wise speculation device' to watch conventional extra
security plans offered by LIC dealt with just the
insurance needs of individuals. Nonetheless, with the
regularly changing requests of clients another item
called ULIP was propelled which consolidates the
advantages of insurance, speculation and tax
reductions. The writer saw that ULIPs were more
qualified to financial specialists who have 15-20
years as their time skyline to spread the cost over the
more extended period and receive the rewards.
Divya Y. Lakhani (2011) had led an exploration
concentrate to recognize the connection among
returns and Sensex, speculators' inclination for ULIP
and Equity, development and infiltration of ICICI
Prudential and the exhibition of a portion of its ULIP
plans. The significant finding of this examination was
that the NAV for value based store choices moves
couple with Sensex while for obligation based
reserve choices it isn't quite influenced by the
development of Sensex
IV. DATA ANALYSIS AND
INTERPRETATION
CALCULATION OF RISK AND RETURNS OF
KOTAK MAHINDRA BALANCED FUND FROM
01.01.2019 TO 31.03.2019
INTERPRETATION
The above table shows NAV ‘S of ULIPS
BALANCED FUND from 01.01.2019 to 31.03.2019.
The highest NAV is 24.0375. and the lowest NAV is
22.5717. The average return is 0.0805, risk is 0.3557
and Sharpe Performance Ratio=-1.4136.
CALCULATION OF RISK AND RETURNS OF
KOTAKMAHINDRA GUARANTEE FUND FROM
01.01.2019 TO 31.03.2019
INTERPRETATION
The above table shows NAV ‘S of ULIPS
GUARANTEE FUND from 01.01.2019 to
31.03.2019. The highest NAV is 20.0469. and the
lowest NAV is 19.058. The average return is 0.0607,
risk is 0.3154 and Sharpe Performance Ratio=-
1.6570.
V. FINDINGS
The KOTAK BALANCED FUND has
average return is 0.0805, risk is 0.3557 and
Sharpe Performance Ratio-1.4136.
The KOTAK GUARANTEE FUND has
average return is 0.0607, risk is 0.3154 and
Sharpe Performance Ratio-1.6570.
The KOTAK ADVANTAGE
MULTIPLIER FUND has average return is
0.0255, risk is 0.0741 and Sharpe
Performance Ratio-7.5280.
The KOTAK DYNAMIC BALANCED
FUND has average return is 0.0883, risk is
0.3974 and Sharpe Performance Ratio-
1.2456.
The KOTAK DYNAMIC BOND has
average return is 0.0451, risk is 0.1697 and
Sharpe Performance Ratio-3.1716.
The KOTAK GROUP MONEY MARKET
has average return is 0.0299, risk is 0.07 and
Sharpe Performance Ratio-7.9061.
The KOTAK GROUP PRUDENT FUND
has average return is 0.0592, risk is 0.1664
and Sharpe Performance Ratio-3.1498.
The KOTAK GROUP SHORT TERM
BOND FUND has average return is 0.0414,
risk is 0.0640 and Sharpe Performance
Ratio-8.4676.
The KOTAK PENSION BALANCED has
average return is 0.0802, risk is 0.3195 and
Sharpe Performance Ratio-1.5747.
The KOTAK PEAK GUARANTEE FUND
has average return is 0.0181, risk is 0.0854
and Sharpe Performance Ratio-6.6186.
SUGGESTIONS
The kotak dynamic balanced fund has given
high returns whereas compared to others
schemes. This scheme is better to choose
first priority.
The kotak balanced fund has given low
returns whereas compared to kotak dynamic
balanced fund scheme. This scheme is better
to choose second priority.
The kotak pension balanced has given low
returns whereas compared to kotak dynamic
balanced fund and balanced fund schemes.
This scheme is better to choose third
priority.
The kotak guarantee fund has given medium
returns whereas compared to kotak dynamic
balanced fund, balanced fund and pension
balanced schemes. This scheme is better to
choose fourth priority.
The kotak group prudent fund has given low
returns it is better to considered five priority.
The kotak dynamic bond has given low
returns it is better to considered above first
five schemes.
The kotak group short term bond fund has
given low returns it is better to considered
above first five schemes.
The kotak group short term bond fund has
given low returns it is better to considered
above first five schemes.
The kotak advantage multiplier fund has
given low returns it is better to considered
above first five schemes.
The kotak peak guarantee fund has given
low returns whereas compared to others
schemes. it is better to not considered.
VI. CONCLUSION
ULIPs or Unit linked insurance plans offer life
insurance and risk protection to the policy holders. It
provides tax reduction benefits to the policy holders.
Unit linked insurance plans provides assurance and
investment.
It is advisable to the policy holders to invest in ULIPs
(Unit Linked Insurance Plans) because ULIPs
provide both security and high returns.
All investment which are invested by KOTAK LIFE
INSURANCE in various schemes of KOTAK AMC
has given positive returns but the top five best returns
schemes are
Kotak Dynamic Balanced Fund
Kotak Balanced Fund
Kotak Pension Balanced
Kotak Guarantee Fund
Kotak Group Prudent Fund
BIBLIOGRAPHY
Textbooks
Scott E. Harrington, Gregory R. Niehaus,
Risk Management and Insurance Tata
McGraw-Hill Edition 2004
Rejda, George E., McNamara, Mike,
Principles of Risk Management and
Insurance (11th Edition)
R.D.Samarth, Operational Transformation of
General Insurance Industry during the
period 1950 to 1990
John Magee & David Bicklhaupt, General
Insurance
Websites
www.insurance.kotak.com
www.kotak.com/en.html
www.policybazaar.com/life-insurance/ulip-
plans/articles/
www.bankbazaar.com/life-insurance/ulip.html
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