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Prepared by:- zala Devendnasinh p.

Year:- T.Y.B.B.A

Roll No:-137Topic:- ni! "in#ed $ns%ranse Plan &"$Ps'

Acade(ic year:- )**+-)*1*

,%b(i!!ed To:- sa(i ,haanand colle/e o0 co((erce (ana/e(en!

&B.B.A' Bhavna/er niversi!y

CANDIDATES STATEMENT

I undersigned Zala Devendrasinh Pratapsinh , the student of T.Y

B.B.A. Hereby declares that the project work presented in this report is my own

and carried under the guideline of Branch Maneger Girirajsinh Gohil

and Business Development Manager and agency manager jignesh pandya

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DATE ! "#$"#$%"#"P&A'E!B(A)*AGE+

-: SIGN!"#$ :- Zala Devendrasinh Pratapsinh

A',*-&EDGEME*T

first of all I am thankful to G%& because of him , my e'istence is created and that(s whyI am able to doing this work ) than how can I forget my *#$N!S ,their warm guidance andmoti+ation helps through out my journey of de+eloping the project)

I feel great pleasure in submitting this report as a part of a practical training and studies inthe professional course of management )this +isit has been helped me a lot in acuiring theknowledge regarding the company)

I am +ery helpful to our principal shilpa /hatt) our coordinator *eatra medam

and the all supporti+e college staff for gi+ing me the information about the project)

I am also +ery thankful to branch manager Girirajsinh Gohil business de+elopmentanager and agency managerjignesh pandyaand whole staff of !! IG B(A)*AGE+.

#esearch of any unit is different as more as you attempt more you go deep ,new and newdetail emerged) It is not easy e'ercise )it is with the help of combine efforts and guidelines of ourteacher, present and friends)

Howe+er, I can(t e'press my thank to all the people of the staff in tata IG, .H/NG$#and for their support gi+ing us such a great help,without a guidance of whom it is +ery difficult to

prepare such a report)

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Zala Devedrasinh Pratapsinh

P+E0A'E

s we know that +itamins are +ital to the heelth of people and animals) In the present worldnot only the theoretical work is important but also the practical work is important ,which is notgi+en in the classroom)we know that the practical work is useful in e+ery field as well as our futurelifetime) In short,student can impro+e his knowledge about all the sectors of markets)during the

study,the student can impro+e their skills)

In comparison to bookish knowledge, practical studies pro+e to be +ery impru+enent andnessassary as it helps a student to the practical tobe +ery important and necessary as it helps astudent to the practical fields and get the idea about the e'act position of the entrepreneur and themanager)in this way after competing studies ,one can better in the fiel of business)s1amishahajanad college o2 commerce 3sscc45 B(A)*AGE+5helps the student to de+elop theirknowledge in the field of industry en+ironment and business by the means of management ofcompany)

s a student of !)0).).) program, I ha+e opportunity to ha+e got practical training in the

TATA A6G5 B(A)*AGE+.

In this report I ha+e tried to do my best to collect much can do my best as much informationas I can) !his report is reflection of which I undestad and learn from my traning session )this reportis prepared the purpose of the study, not in theoretical way but in a practical way)

Heredy I am submitting the report11))

Zala Devendrasinh Pratapsinh

!)y).).)

MA6* '-*TE*T7

# General in2ormation

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% 6nsurance

8 Mutual 2und

9 :nit lin; insurance plan

< +esearch = conclusion> Bi/liography

GE*E+A& 6*0-+MAT6-*

Tata Group pro2ile 9

American 6nternational Group Pro2ile !he grup emplos around =7,777 people wordwide) !he !ata name has been respected inIndia for 4,!atapowar,!ata chemicals, !ata tea, Indian hotels,!ata !eleser+ices and tata communications)

American international group5 inc. 3A6G4 Pro2ile

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merican intarnatinal group) Inc) ;IG>, a world leader in insurance and financial ser+ices ,is theleading international insurance organiAation with operation in more than 4=7 countris andjurisdiction)IG companies ser+e commercial,institutional and indi+idual customers through the

most e'tensi+e wordwide property-casuaity and life insurance networks of any insurer in additionIG companies are leading pro+iders of retirement ser+ices,financial ser+ices and assetmanagement around the world)IG(s common stock e'changes in paris,switAerIand and !okyo)

Tata A6G &i2e 6nsurance company &imited

3Tata A6G &i2e4!ata IG Cife insurance company Cimited ;!ata IG Cife > is a joint +enture company,formed bythe !ata Grooup and merican Intarnatinal Group,Inc) ;IG>!ata IG Cife combines the !ataGroup(s pre-eminent Ieadership position in India and IG(s global presence as one of the world(sleading intarnatinal insurance and financial ser+ices organiAation !he !ata Group holds 8< percent stake in the insurance +enture with IG holding the balance 69 per cent !ata IG Cifepro+ides insurance solutions to indi+iduais and corporates)!ata IG Cife insurance company waslicensed to operate in India on India on Debruary 46,6774 and started operations on pril 4,6774)

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Year1ise *um/er o2 Policies and +evenue!

Key Achievement!

#. -ver o22ices.8. Asset under management rs.

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)ision#. 0inancial strength and sta/ility to support the insurance /usines

%. A strong /rand!euity.8. A good mar;et reputation as a 1orld class organiation9. An eCtensive distri/ution net1or;.. A #" million strong /ase o2 retail customers using tata products.

P+-D:'T P+-06&E

0-+ '(6&D+A*1. mple money a+ailable to pay for education or marriage with tata A6G li2eassure %# years

money saver

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2. steady ,lifetime income with tata A6G li2e mahali2e Gold.3. Ehat sefty net and more control o+er your returnsF See Tata A6G li2einvestAssure ##.4. Ehat a unit @linked policy with a single-premium paying termF See tata A6G li2e invest

AA77:+E plus.

5. !he money they need to start a succesfuly career withTata A6G li2e assure carreer/uilder.

6. Dinancial support to recei+e the best education possible with Tata A6G li2e assureEducated at #@ = Assure Educare at %#.

7. !he +ery best college post graduate education with Tata A6G li2e star;id.8. Eatch your sa+ing grow as fast as your chiled(s aspirations with Tata A6G li2e :nited

:jj1al Bhavishya.

0-+ AD:&T1. re hospitaliAed or ha+e aprolonged illnessF See !ata IG life in+estassure helth tata Ig

life health first tata A6G li2e health protector !< year guaranteed rene1al accident andhealth plan.

2. Ehat your children to ha+e asteady income ,no matte rwhat happensF See Tata A6G &i2eMahali2e gold.

3. Stay protected against 46 critical illnesses) Ge tyour life back and your money) seeTataA6G health investor

4. Ehat a safety net and more control o+er your returnFsee Tata A6G li2e investassure %.5. Eant unit linked insurance plan with inbuilt critical illness benefitF See Tata A6G li2e

investassure care

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1. Eant a unit-linked insurance plan with an in-built *ayor .enefitF See Tata A6G &i2e

6nvestAssure ECtra

2. Eant a unit-linked endowment in+estment plan with a host of fle'ible featuresF See Tata

A6G &i2e 6nvestAssure 0leCi

3. #eap attracti+e rewards for a lifetime with a whole life unit linked plan) See Tata A6G &i2e

6nvestAssure Gold

4. Eant a unit-linked policy with a single premium paying termF See Tata A6G &i2e

6nvestAssure Plus

5. Eant to optimiAe your return, and protect yourself against any unforeseen e+entualityF See

Tata A6G &i2e 6nvestAssure -ptima

6. &on(t want to face financial risk, but cannot afford high premiumsF See Tata A6G &i2e

Assure # year$< Years$#" Years$#< Years$%" Years$%< Years &i2eline Plans5 and term

to age >" ;no1n as Assure &i2eline to Age >"

7. Eant your money back if you outli+e your policyF See Tata A6G &i2e &i2ePlus

8. Eant co+erage and fle'ibility to get your money when you need itF See Tata A6G &i2e

Assure %# years Money 7aver

9. Eant safety and high returnsF See Tata A6G &i2e Assure #" Years$#< Years$%" Years$8"

Years 7ecurity and Gro1th Plans

10. Eant a low-cost term plan which offers a large co+erF See Tata A6G &i2e +a;sha

#"$#

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3. *ro+ide a stable, lifetime income for you and your family with Tata A6G &i2e Maha&i2e

Gold

4. Gi+e you the fle'ibility to choose when to retire with Tata A6G &i2e *irvana

5. Eant a safety net and more control o+er your returnsF See Tata A6G &i2e 6nvestAssure

66

6. #eap attracti+e rewards for a lifetime with a whole life unit linked plan) See Tata A6G

&i2e 6nvestAssure Gold

7. Eant a custom-made retirement solutionF See Tata A6G &i2e 6nvestAssure 0uture

8. Guarantee additions to your sum assured with Tata A6G &i2e *irvana Plus

6*7:+A*'E

0undamental o2 insurance ##

&$ief histo$y of ins"$ance secto$ '(

Brie2 history o2 insurance sector in 6ndia #9

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Types of ins"$ance ')

6nsurance regulatory = development #

0:*DAME*TA&7 -0 6*7:+A*'E

In life e+ery human being @ you and we included is e'posed to an element of risk, commonly

defined as the possibility of loss) !hese broadly relate to two spheres @ our li+es and our material

possessions) Durther, e+ery loss has two implications: financial and non-financial) Dor instancewhen a person dies, the family suffers a grie+ous loss, which can perhaps ne+er be compensated)

.ut the family also suffers another significant loss @ financial loss particularly person who dies

was an earning member or e+en potentially earning member) !here are then concerns about the

financial stability of the dependents) Similarly, when a factory is gutted in a fire, in addition to the

loss of property, there are other considerations: the effort to rebuild the factory, the future of

workers and fate of suppliers and consumer attached to the business)

In both instances, little can be done about non-financial losses) .ut financial losses can and must

be addressed and using risk management tool and that is Insurance)

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(AT 67 6nsurance

JInsurance is a financial ser+ice for collecting the sa+ing of the public and pro+iding them with a

risk co+erage) K!hus in insurance,

The +is;

The 6nsured The 6nsurer

General De2inition

In words of Lohn agee, K6nsurance is a plan /y 1hich large num/er o2 people associate andtrans2er to the shoulders o2 all ris;s that attach to individuals.F

B+6E0 (67T-+Y -0 6*7:+A*'E 7E'T-+Insurance Caw had its genesis in Condon) In the early Condon 5offeehouses were centers

not only of commerce and literature but of debate and intellectual e'ercise as well) !hey also had

a political influence that mo+ed the reigning king 5harles II to attempt unsuccessfully theirsuppression)

mong such se+enteen century Condon coffee houses was one called Cloyd( 5offee house

owned by $dward Cloyd and situated in !ower Street) !he coffee house and the ad+antage of

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being near to ri+er !hames thus attracting the patronage of men interested and connected with

marine acti+ities)

In the se+enteenth century there were no corporate entities engaged in insurance acti+ities)

!he practice pre+alent was that indi+iduals wrote their names below some clauses to guaranteecommercial +entures on personal basis, Cloyd(s 5offee house thus the fa+orite +enue for such

guarantors who came to be called "nderwrites to conduct business informally o+er cups of coffee)

Eith passage of time Cloyd(s 5offee house become recogniAed as a place for people wanting

insurance o+er to fine the underwriters)

$dward Cloyd encouraged the business by pro+iding the customers in the coffee house with

pen, ink, paper and shipping information obtained for the water front) !he insurance acti+ities in

the coffee house culminated in the formation of 5orporation of Cloyd under the ct of 4384) !he

name was immortaliAed although $dward Cloyd(s passed away in the year 484=)

CloydMs arine Insurance policy originally adopted in the year 4882, is still commonly usedas standard form with suitable additional clauses to suit modern reuirements) Cloyds may thus berightly known as the creators of insurance concept) arine insurance law was thus the first form ofinsurance, other forms of insurance e+ol+ed gradually with dynamic reuirements of the society)

.ritish statutes inspire the statutes in India) In $ngland arine a specific statute regulates

insurance while other forms of insurance are co+ered by general legislation) In India the marine

insurance ct 429= base on the $nglish arine Insurance 5!, 4279 is the legislation dealing

only with aspect of arine Insurance policies) !he pro+isions of the Insurance ct 42=3 regulate

the other +ariations of insurance policies)

ll insurance policies ha+e to be in agreement with the pro+isions of law if contracts) policy of insurance codifies a contract between the insurer and the insured hence all principles oflaw of contracts between two or more is the Indian 5ontract ct 4386)

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B+6E0 (67T-+Y -0 &60E 6*7:+A*'E7E'T-+ 6* 6*D6A

!he early de+elopments of life insurance were closely linked with that of marine insurance) !he

first insurers of life were the marine insurance underwriters who started issuing life insurancepolicies on the life of master and crew of the ship, and the merchants) !he early insurancecontracts took the nature of policies for a short period only) !he first life insurance policy wasissued on 43th Lune 43=, on the life of Eilliam Gibbons for a period of 46 months) It was in theeighteenth century, societies began to be formed for issuing life insurance policies) mong suchsocieties the micable Society ;487>, !he $uitable life ssurance society ;4896>, the Eestinister Society ;4826> was the important societies) !he premium rates were +aried in +iew ofreputation and the health condition of the insured)

!he .ritish companies started life insurance business in India, by issuing policies e'clusi+ely onthe li+es of $uropean soldiers and ci+ilians) !hey sometimes issued policies on the li+es of

Indian(s by charging e'tra) &ifferent insurance companies like .ombay Insurance 5ompany C!&);482=> and %riental life ssurance 5ompany, the first Indian 5ompany named as .ombay utualCife Insurance Society Ctd) Eas formed in &ec) 4387)

&uring the period from 4387 to 4277, a larger number of Indian companies were formedunder the Indian companies ct, 4399) !he business was confined to few communities andoccupations only) &uring the period from 4277 to 4226, the insurance business attracted attentionamong middle class people) s a result, Go+ernment of India passed the insurance ct on themodel of .ritish ssurance ct) &uring the period from 4246-42=7, the insurance businesswitnessed a setback)

fter se+eral changes ha+e been made for the period from 42=7 to 42=3, the Go+ernment of Indiapassed insurance ct, 42=3) !he act still applies to all kinds of insurance business by institutingnecessary amendments from time to time)

.y 429, 4< Indian insurers, 49 foreign insurers and 8 pro+ident societies werecarrying on life insurance business in India) t that time life insurance business was concentrated

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in urban areas and confined to the higher strata of the society) Lanuary 429 the management oflife insurance business of 6)

!he Indian insurance market was restricted sector) %nly two

go+ernment giants namely CI5 GI5 ruled it till it was set open to the pri+ate players)

!he Narasimha #ao go+ernment unleashed liberal changes in india(s rigid economicsector) !he #ao go+ernment appointed a committee of #eforms in the insurance sector in pril422= under the chairmanship of #)N)alhotra) the insurance #egulatory uthority ;I#&> ct,4222 could be passed by the *arliament during No+ember 4222) I#& open its window forpplication for gi+ing new licenses to the prospecti+e players on 49th ugust, 6777)

Types o2 6nsurance

!here are basically two types of Insurance) !hey can be classified into following two categories,

INSURANCE

LIFEINSURACNE GENERAL INSURANCE

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&60E 6*7:+A*'E

0our family counts on you e+ery day for financial support, food) Shelter, transportation, education,and much more) Insurance pro+ides you with that uniue sense of security that no other form ofin+estment pro+ides)

Cife insurance is all about making sure your family has adeuate financial resources to makethose plans and dreams come true) It pro+ides financial protection to help your family or businessto manage after your death)

Ehole life policies @ co+er the insured for life) !he insured does not recei+e money while he isali+e the nominee recei+es the sum assured plus bonus upon death of the insured)

Endo1ment Policies 5o+er the insured for a specific period) !he insured recei+es money onsur+i+al of the term and is not co+ered thereafter)

Money /ac; policies !he nominee recei+es money immediately on death of the insured) %n

sur+i+al the insured recei+es money at regular

Inter+als during the term) !hese policies cost more than endowment with profit policies)

Annuities $ 'hildrenHs policies !he nominee recei+es a guaranteed amount of money at a pre-determined time and not immediately on death of the insured) %n sur+i+al the insured recei+esmoney at the same pre-determined time) !hese policies are best suited for planning children(s

future education and marriage costs)

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Pension schemes !here are policies that pro+ide benefits to the insured only upon retirement)If the insured dies during the term of the policy, his nominee would recei+e the benefits either as alump sum or as a pension e+ery month)

Since a single policy cannot meet all the insurance objecti+es, one should ha+e a portfolioco+ering all the needs)

GE*E+A& 6*7:+A*'E

$+ery asset has a +alue and the business of general insurance is related to the protection ofeconomic +alue of assets) ssets would ha+e been created through the efforts of owner, whichcan be in the form of building, +ehicles, machinery and other tangible properties)

5oncepts of insurance ha+e been e'tended beyond the co+erage of tangible asset) Now the riskof losses due to sudden changes in currency e'change rates, political disturbance, negligence andliability for the damages can also be co+ered)

.ut if a person judiciously in+ests in insurance for his property prior to any une'pectedcontingency then he will be suitably compensated for his loss as soon as the e'tent of damage isascertained)

Property 6nsurance !he home is most +alued possession) !he policy is designed to co+er the+arious risks under a single policy) It pro+ides protection for property and interest of the insuredand family)

(ealth 6nsurance It pro+ides co+er, which takes care of medical e'penses followinghospitaliAation from sudden illness or accident)

Personal Accident 6nsurance !his insurance policy pro+ides compensation for loss of life orinjury ;partial or permanent> caused by an accident) !his includes reimbursement of cost oftreatment and the use of hospital facilities for the treatment)

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Travel 6nsurance the policy co+ers the insured against +arious e+entualities while tra+elingabroad) It co+ers the insured against personal accident, medical e'penses and repatriation,loss of checked baggage, passport etc)

&ia/ility 6nsurance !his policy indemnifies the &irectors or %fficers or other professionalsagainst loss arising from claims made against them by reason of any wrongful ct in their%fficial capacity)

Motor 6nsurance otor /ehicles ct states that e+ery motor +ehicle plying on the road hasto be insured, with at least Ciability only policy) !here are two types of policy one co+ering theact of liability, while other co+ers insurers all liability and damages caused to one(s +ehicles)

Since a single policy cannot meet all the insurance objecti+es, one should ha+e aportfolio co+ering all the needs)

6nsurance +egulatory and Development Authority 36+DA4

!he insurance #egulatory and &e+elopment uthority ;I#&> was constituted as anautonomous body to regulate and de+elop the business of insurance and re-insurance inIndia) !he uthority was constituted on pril 42, 6777 +ide Go+ernment of India(snotification No) 688)

!he insurance #egulatory and &e+elopment uthority ct, 4222, was enacted by*arliament in the fiftieth year of the #epublic of India to pro+ide for the establishment of anuthority to protect the interests of holders of insurance policies, to regulate, promote andensure orderly growth of the insurance industry and for matters connected there with orincidental there to and further to amend the insurance ct, 42=3, the life Insurance5orporation ct, 429 and the General Insurance .usiness act, 4286) I#& was constitutedin terms of the Insurance #egulatory and &e+elopment uthority ct, 4222, as the regulatorof the Indian Insurance industry)

I#& #egulator and &e+elopment uthority as it was pro+ided that it had broaderrole to perform in the Indian insurance market) It has not only to frame was setup in 4229 butit was formally constituted as a regulator of the insurance industry in pril 6777) !heregulator was initially known as the insurance #egulator uthority but was subseuently

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rechristened as Insurance and issue statutory and regulator stipulations, guidelines, andclarification but it has also to perform a de+elopmental and promotional role)

!hus, the objecti+es of I#& are twofold: policyholder protection and healthy growth

of the insurance market)

I#& has till 6774 issued se+enteen regulations in the areas of registration ofinsurers, their conduct of business, sol+ency margins, conduct of reinsurance business,licensing, and code of conduct intermediaries) It

4) Dollows the practice of prior consultation and discussion with +arious interest groups beforeissuing regulation and guidelines)

The 2ollo1ing players have applied and some have got licenses and even startedoperations in 6ndia.

Indian partner Doreign partner specialiAation *resent statusH&D5 Stander life " Cife In operation#eliance No partner Non-life %peration to begin

shortlySundaram #oyal sun

allianceNon-life In operation

a' India New york life life In operation.ajaj auto llianA Non-life and life pplied for license

otak mahindra %ld mutual south Cife Started operationI5I5I *rudential," Cife In operationI5I5I Combard Non-lilfe pplied for licenseIDD5% !okyo

marin,japanNon-life #ecei+ed license

!ata group IG,"S Cife, non-life In operationditya birla group Sun life Cife In operationS.I 5ardif france Cife #ecei+ed license/ysya bank ING life #ecei+ed license

*:MBE+ -0 +EG67T+E+ED 6*7:+E+7 6* 6*D6A

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Type o2/usiness

Pu/lic sector Private sector Total

Cife insurance 74 4= 4 open-end funds 47> +alue funds=> large cap funds 44> money market funds mid cap funds 46> international mutual funds

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> euity funds 4=> regional mutual funds9> balanced funds 4 sector funds8> growth funds 4> inde' funds

3> no load funds 49> fund of funds

'(A+A'TE+67T6'7!

4) mutual fund actually belongs to the in+estors who ha+e pooled their funds) !he ownershipof the mutual fund is in the hands of the in+estors)

6) In+estment professionals and other ser+ice pro+iders) Eho earn a fee for their ser+ices,

from the fund, manage a mutual fund)

=) !he pool of funds is in+ested in a portfolio of marketable in+estments) !he +alue of theportfolio is updated e+ery day)

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Advantages o2 mutual 2unds investor

9) *ortfolio di+ersification8) *rofessional management3) Higher rate of return2) #eduction of transaction47) Ciuidity

44) 5on+enience and fle'ibility

Disadvantages o2 mutual 2unds to investors

#%. *o control over costsSince in+estor do not directly monitor the fund(s operations they cannot the

costs effecti+ely) #egulators usually limit the e'penses of mutual funds)

#8. *o tailor!made port2oliosutual fund portfolios are created and marketed by 5s, into which

in+estors in+est) !hey cannot create made portfolios)

#9. Managing port2olio o2 2undss the number of mutual funds increases, in order to tailor a portfolio for him,

an in+estor may be holding a portfolio of funds, with the costs of monitoring them and usingthem, being incurred by him)

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Product types

Euity 2unds

De/t 2unds

Balance 2unds

Euity 2unds

!his fund is pre-dominantly in euity share of component) !here are +arieties ofways in which an euity portfolio can be created for in+estors)

#. Primary mar;et 2unds#?. 7ectorial 2unds#@. 6ndeC 2unds

De/t 2unds

&ebt funds are those that pre-dominantly in+est in debt securities) Since most debtsecurities pay periodic interest to in+estors, these funds are also known as income funds)Howe+er funds in+esting in debt products can also offer a growth option to their in+ertors)!he uni+erse of debt securities comprise of long-term instruments such as:

4) .ond issues by central and state go+ernments

6) *ublic financial institutions and pri+ate sector companies

=) *ublic sector organiAations

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and keep a smallerpart of their portfolios indebt securities) !hese funds seek to enhance the income potentialof their euity component, by bringing in debt) Similarly there are predominantly debtfunds ;o+er 87?in debt securities>, which in+est in euity, to pro+ide some growthpotential their funds) balanced fund also tends to pro+ide in+estors e'posure to botheuity and debt markets in one product)

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:*6T &6*,ED 6*7:+A*'E P&A*

6ntroduction o2 :&6Ps 8"

-vervie1 o2 :&6Ps 8#

,ey 2eatures o2 :&6Ps 88

Bene2its o2 :&6Ps 89

ECpenses involved in :&6Ps 8@

:&6Ps plan comparison 8

7hould investor opt 2or :&6Ps 9

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6ntroduction

s the competition increases in insurance industry and more in+stament a+enues area+ailable to in+estor) Insurance industry has also upgraded them by introducing marketing linkedinsurance plan)

!he main different is in choice of in+estment )in unit linked insurance plan companies willgenerally offer combination of different product with different combination of debt-euity mi' )thisfund differ decides that risk e'posure and appreciation)

In addition non- guaranteed bonuses in the from of share in the profits of the company mayalso be offered depending on whether the policy is participating policy or not) *olicyholder has nosay in the choice of in+estment, which are decided by the companies on his behalf) !he premiumamount is fi'ed at the outset and the same uantum of premium needs to be paid throughout theterm of policy)

So unit linked insurance plans can be said the combination of characteristic of mutual fund andinsurance)

Mutual 6nsurance

:&6Ps

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-vervie1 o2 :&6P

ost insurers in the year 677< ha+e started offering at least a few unit-linked plans) "nit-linked lifeinsurance products are those where the benefits are e'pressed in terms of number of units andunit price) !hey can be +iewed as a combination of insurance and mutual funds) !he number ofunits, which the customer would get, would depend on the unit price when he pays his premium)!he daily unit price is based on the market +alue of the underlying assets ;euities, bonds,go+ernment securities etc)> and computed from the net asset +alue)

!he ad+antages of unit linked plans are that they are simple, clear, and easy to understand) .eingtransparent the policyholder gets the entire upside on the performance of his fund)

"nit-linked products are e'empted from ta' and they pro+ide life insurance) In+estors welcomethese products as they pro+ide capital appreciation e+en as the yields on go+ernment securitiesha+e fallen below 9 percent, which has made the insurers slash payouts)

ccording to the I#&, a company offering unit linked plans must gi+e the in+estor an option tochoose among debt, balanced and euity funds) If you opt for a unit-linked endowment policy, youcan choose to in+est your premiums in dent, balanced or euity plans) If you choose a debt plan,

the majority of your premiums will get in+ested in debt securities like gilts and bonds)

!he ideal time to buy a unit-linked plan is when one can e'pect long-term growth ahead) !his isespecially so if one also belie+es that current market +alues ;stock +aluations> are relati+ely low)So if you are opting for a plan that in+ests primarily in euity, the buAAing market could lead towindfall returns) Howe+er, should the buAA die down, in+estors could be left stung)

If one in+est in a unit-linked pension plan early on ,say 6,one can afford you take the riskassociate with euities, at least in the plan(s initial stages) Howe+er, as one approaches retirementthe uantum of return should be subordinated to capital preser+ation) t this stage, in+estigating in

a plan that has an euity tilt may not be a good idea)

5onsidering that unit-linked plans are relati+ely new launches, their short historydoes not permit an assessment of how they will perform in different phases of the stock market)

,ey 0eatures o2 :&6Ps

4) *remiums paid can be single, regular or +ariable) !he payment period too can be regular

or +ariable) !he risk co+er can be increased or decreased)

6) s in all insurance policies, the risk charge ;mortality rate> +aries with age)

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=) !he maturity benefit is not typically a fi'ed amount and the maturity period can bead+anced or e'tended)

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appetite changes with age, and you want to mo+e a lower risk option secure your accumulations,you can migrate your money to safer ha+ens)

TaC /rea;s!!he premiums you pay on unit-linked plans ualify for rebate under section 33)

; in the case on unit-linked pension plans ,they ualify for deduction under section 37555)>mong mutual funds, only euity-linked sa+ing schemes offer section 33 rebate, with a three-yearlock-in) page: lthough ta' breaks aren(t by themsel+es reasons enough to decide on a choiceof in+estments, there(s no denying that tilt the balance in fa+our of unit-linked plans-e+en if youare financially sa++y an feel euipped to manage your in+estments through, say, euity funds)

ECpenses!

one area where unit-linked plans come in for widespread criticism related to thee'penses that insurers charge under three broad heads :-mortality charges ; which goes towardspaying for your insurance co+er>, general e'penses;agent(s commissions and underwritingcosts>,and fund management costs) !he second head, general e'penses ,accounts for the biggestcomponents-typically, around in the first two years ,which goesdown sharply in later years) Dor instance, e'pense ratio of 92)3 per cent in year 4 ; for a premiumof #s47,777 a year>,which comes down to 64)9 per cent,46)= per cent and 2)3 per cent in thesubseuent years)

!he actual e'pense structure may +ery from one product to another dependingon, among other things, the amount in+ested, the in+estment tenure and the period beyond which

withdrawals are permitted) Dor instance, upon in+esting #s67,777 a year for 4 in !ataIG(sin+est assure policy, you will pay

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!he hea+y frontloading of e'penses effecti+ely acts as a disincenti+e for earlywithdrawals) Dor instance, o+er three- or fi+e-year tenure, unit-linked plans in most cases comparepoorly with euity funds on pre-ta' return only if you factor in the income accruing from theadditional in+estment of the section 33 drawback in **D do the return from unit-linked plans fare

better those from euity funds) nd for those who don(t must perforce be 4 years or more for it tomake financial sense)

%n the other hand, staying in+ested for longer tenures offers returns that canmatch-and e+en better-euity funds )for instance, if you in+est for 4 years, you get ta'-free returnof #s 3)9 lakh from the unit-linked plan e+en if you(re not eligible for section 33 rebate) %n theother hand, the euity fund will only return #s 3)= lakh, post-ta')

Junlike mutual funds, unit-linked plans don(t face redemption pressure a fundmanager for a unit-linked product can, therefore, perform better in the long run, Ksays #ohit Sarinof client associates, a pri+ate wealth management firm)

Top!up strategy!

%ne way of lowering your e'pense structure is by making imaginati+e use of thetop-up pro+ision that most insurers offer) "nder this, you can keep your premium to the minimumreuired under the plan, typically #s 47,777 a year) 0ou can then Mto up( from the second yearonwards) by which time the e'pense ratio is much smaller) .ut ,you may ha+e to pay a fee for thisthe this facility, which is small if the top-up e'ceeds a threshold defined by the particular insurer);for instance, single top-ups abo+e #S 6,777 on !ata Ig(s in+est assure policy in+ite a 4) per

cent charge top-ups in the charges decline o+er the tenure)> what this strategy lets you do is tolower your e'pense outgo in the early years ;when they ere are +ery high>, and o+er the years letsyou di+ert more of your o+erall premium payout to the in+estment component)

Are they 2or you

Junit-linked products are finally products of choice,K says #ajagopalan) If you feeleuipped to manage your in+estment on your own or are not comfortable with long lock-ins or youcan(t make the most of these ta' breaks, you may be better off in+esting elsewhere after securingyour life insurance needs) but if you are not financially sa++y or ha+e little time to monitor yourin+estments and don(t ha+e access to professional in+estment managers and still want market-linked returns on your in+estment, you might just want to sa+our the fla+our of the season)

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ECpenses involved in :&6P

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:*6T &6*,ED P&A*7 '-MPA+676-*!

In a "CI*, part of the monthly premium is used to pro+ided insurance co+er for theperson and the remaining amount is in+ested in the stock market) If a person is wealthy or hasno dependents, insurance co+er may not be reuired) t a young age ;less than =7>, insurancepremium are low, so purchasing a term policy may be a better option)

!he o+erheads for the "CI* are higher compared to a mutual fund, so the returns maybe lower) Howe+er, the buyer of "CI*s should also be prepared for negati+e returns whenshare prices fall)

ost of the insurance companies offer attracti+e commissions to their agents for "nitCinked Insurance *lans ;"CI*>, so many people buy "CI*s without reading the print as thesesis marketed aggressi+ely by companies pro+iding in+estor ser+ices)

0ortune Plus and Pro2it Plus 2rom &6'!

4) "nit Cinked $ndowment *lans from Cife Insurance 5orporation of India)

6) Dortune *lus ;!) no) 438>

=) *rofit *lus ;!) no) 433>

0eatures!

4) .ond Dund, Secured Dund, .alanced Dund, Growth Dund

6) "nlimited switches ;< free switches per year>

=) ccident benefit rider

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Dor *rofit *lus, premium can be paid in one installment or a number of installments o+er aperiod of up to years) inimum premium is #s) 67,777 for single premium and #s)47,777 per annum for term policies) It is a+ailable for persons up to 9 years)

!he premium is limited to years for Dortune *lus and is a+ailable for the age group 46-97) inimum premium payable in the first year is #s) 67,777)

*remium paid in "nit Cinked Cife Insurance *olicies are subject to in+estment risksassociated with capital arkets and the N/ of the units may go up or down based on theperformance of the fund and factor influencing capital markets and the insuredresponsible for hisher decisions)

6nvest Assure Gold 2rom TATA A6G &i2e 6nsurance 'ompany !3whole life unit linked insurance policy4

0eatures!

4) Di+e year premium period6) $ntry e+en at 87=) Coyalty units e+ery co+er till age of 477

*remium paid in "CI*s are subject to in+estment risks associated with capital marketsand the N/ of the units may go up or down based on the performance of the fund andfactor influencing capital

arkets and the insured are responsible for his decision) !ata IG life insurancecompany limited is the name of the insurance company and in+est ssure Gold is the name ifthe "CI* contract and does not in any way indicate the uality of the contracts, its futureprospects or returns) !his product is underwritten by !ata IG Cife Insurance 5ompanyCimited) *ast performance is not indicati+e of future results)

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4) "nit linked insurance plan which adjusts the in+estment according to age)

6) .ased on the age of the person, the debt euity component is periodically adjusted

=) ge at entry : 43-97 year)

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7hould 6nvestors opt 2or :&6Ps

Dirst and foremost, in+estors need to understand that a "CI* is a bundled product oftheir in+estment and their insurance proceeds) So if you ha+e a "CI* in+ested in euities, youare e'posing your life insurance monies as well as your in+estable surplus to the +agaries ofeuity markets) Ehile it is fine and e+en sensible to let your in+estable assets get an euityfla+or, the same cannot be said about your life insurance monies, which to a large e'tent

should be scared) !he +olatility in euity markets can disturb the calmest of minds and the lastthing you want to see is your nest egg being eroded by the latest slide in euity markets) ne'pert elaborates, M "CI* policyholder has the option to in+ent in a +ariety of funds, dependingon his risk profile) If one does not ha+e the appetite to in+est in euity, they can choose a debtor balanced fund)(

Howe+er, the structure of a "CI* takes care of uite a bit of the uncertainty in themarkets) Insurance companies understand the need to gi+e insurance-seekers the fle'ibility torethink their in+estment strategy in +iew of market histrionics) !here is an option for theinsurance-seeker to switch to another plan with a lower or Aero euity components to stem theloss in a falling euity market) $'perts( points out, M!he switch option allows customers to

switch between fund option, thereby making adjustments to any percei+ed risks)( !ata IGallows policyholder to make this switch four times a year at no cost, with #s 477 at e+eryadditional switch after that) H&D5 standard life allows policyholder to make as many switchesas they like) Howe+er, for in+estors to make the right switch they need to track markets acti+elyand be well informed, which is actually the job of the in+estment ad+isorconsultant)

"CI*s are suitable for indi+iduals who are already adeuately insured and arereasonably well-informed and sa++y to take acti+e in+estment decisions by using the Mswitchoption( that is pro+ided to a "CI* policyholder) lso policyholder with regular endowment planswho are not satisfied with the were seen as a Jwonder productK that

simultaneously fulfilled an indi+idual(s needs for in+estments and insurance to do a rethink) /eryoften it was poor selection that was responsible for the in+estors( woes) Ee present a -stepstrategy for in+esting in "CI* s)

#. :nderstand the concept o2 :&6Ps!

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!ry to do as much homework as possible before in+esting in an "CI*) !his way you willknow what you are getting into and won(t be faced with unpleasant surprises at a later stage) %ure'perience suggests that many a time people do not realiAe what they are getting into ;in fact we

ha+e been approached by se+eral people who wanted to cancel the "CI* s they had beencoerced into talking by unscrupulous agents>) Gather information on "CI* s, the +arious optionsa+ailable and understand their working) #ead the literature on "CI* s on the websites andbrochures circulated by insurance companies)

%. 0ocus on your reuirements and ris; pro2ile!

Identify a plan that is best suited for you ;in terms of allocation of money between euityand debt instruments>) 0our risk appetite should play an important role in the plan you choose) Soif you ha+e a high-risk appetite, go in for a more aggressi+e in+estment option and +ice-a-+ersa)%pting for a plan that is lop-sided in fa+or of euities when you are a risk-a+erse indi+idual mightspell disaster for you ;this is true in most cases currently>)

8. 'ompare :&6P s o2 di22erent insurance companies!

5ompare products of the leading insurance companies) $nuire about the premium as "CI* swork on minimum premium basis as opposed to sum assured in the case of con+entionalinsurance policies) 5heck the fund(s performance o+er the past si' months) Dind out how the debtand euity schemes are performing and how steady the performance has been) $nuire about thecharges you will ha+e to pay) In "*IC s the costs in+ol+ed are a big deciding factor)

sk about the top-up facility offered by "CI* s i)e) additional lump sum in+estments you canmake to increase the sa+ings portion of your policy) !he companies gi+e you the option toincrease the premium amounts, thereby pro+iding you with the opportunity to gainfully utiliAesurplus funds at your disposal)

$nuire about the number of times you can make free switches ;i)e) change the assetallocation of the money in your "CI* account> from one in+estment plan to another) Someinsurance companies offer you free switch for a 6-yr period while others do so only for 4 year)

9. Go 2or an eCperienced insurance advisor!

Select an ad+isor who is not only professional and informed, but also independent andunbiased) lso enuire whether he has ser+iced clients like you) Ehen your agent recommends a"CI* of O company ask him a few product-related uestions o him and ask him also why the otherproducts should not be considered

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Insurance ad+ice at all times must be unbiased and independent and your agent must bewilling to inform you about the pros and cons of buying a particular plan) His job should not justbegin by filling the form and end after he deposits the check and gi+es you the receipt) He should

keep a track of your plan and inform you on a regular basis)!he key is to do for an ad+isor who will offer +alue-added products)

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+esearch Methodology

7-:+'E -0 6*0-+MAT6-*

'ollection Methods

%nce the research design has been decided, the ne't stage is that of selecting sources ofdata) $ssentially, there are two sources of data)

46) *rimary &ata 5ollection

4=) Secondary &ata 5ollection

imary 7ources o2 Data !*rimary data may pertain to demographic, socio- economicracteristics of consumers, attitudes and opinions of people, their awareness and other similar amain methods, which are used, for obtaining primary data are as under)

econdary 7ources o2 Data !Secondary data are those data, which are collected from earlier research work and application as well as us

y of research) !here are mainly two types of secondary sources of data and they are:

ypes o2 secondary Data

It includes +arious internal reports prepared by the firm like, salesroduction report) I can(t use any internal primary data)

data$'ternal data can be collected from the web site, magaAines, naws paper and so on)

0ESEA0C1 FINDIN2Potentiality in the insurance sector

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A/out mutual 2unds

A/out insurance

Dirst of the respondents were asked that whether they are ha+ing insurance ornot then it was e'plained that what is adeuate or not on the basis of below formula)deuate insuranceP;< years-present age>Qyearly income

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:nit lin;ed insurance plans

&uring the sur+ey it was asked to respondents that whether they know aboutmarked linked plans which pro+ides insurance co+er and returns) most of them knew little aboutthe plans)

+esearch scope

!he information gi+en in research findings is collected by data collection method) ll thedata(s collected are secondary) So the scope for collecting this data is +ery wide, the data arecollected from internet, magaAines and newspaper)

+ecommendations

4

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Bi/liography

Magaines

.usiness Eord ;%ctober 6774>

.usiness today ;Lune 6774>

.usiness !oday ;pril 677>

.usiness India ; ay 677

e/sites1. www)tataaing)com2. www)ilo+eindia)com3. www)moneycontrol)com4. www)Sebi)go+)in5. www)traderji)com)6. www)kar+y)com7. cccwww)mutualfundsindia)com

http://www.tataaing.com/http://www.iloveindia.com/http://www.moneycontrol.com/http://www.sebi.gov.in/http://www.traderji.com/http://www.karvy.com/http://www.tataaing.com/http://www.iloveindia.com/http://www.moneycontrol.com/http://www.sebi.gov.in/http://www.traderji.com/http://www.karvy.com/