MBA PROJECT

A PROJECT REPORT ON KOTAK LIFE INSURANCEBY:- VARUN BAWA

EXECUTIVE SUMMARY

Monopoly of LIC has been broken to make Indian Insurance to change its face

and pace to tap the market and to make the new challenges in it. Insurance in

India is not about India only; it is an open sector for the private players. The

name which you would see in Indian insurance market is something like: -

BAJAJ (Indian company) + Allianz (foreign player), TATA (Indian company)

+ Aig (foreign player) and so many like them. Companies now are tapping a lot

of ways to capture the market and hence adopting different ways to hold the

large portion of the market. My project was to understand the different

marketing strategies adopted by the companies to increase their market share

and along with it meeting their own targets to achieve the position of no.1 in

respective field or segment of the market. My learning helped me a lot to

complete my project in order to learn a lot of things of the corporate. As a

project trainee the first task given to me was to understand the

basic behaviour of the consumer in order to manipulate the market according to

the our target competition. For this we did developed a questionnaire and I did

my survey in important location of Jodhpur, Jaipur.

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ABOUT INSURANCE

Insurance may be defines as social device to protect the economic value

of the Life and other assets. Under the plan of Insurance a group of people are

brought together and their share of money is pooled to manage the loss suffered

by any of them.

in its basic form is defined as “ A contract between two parties whereby one

party called Insurance insurer undertakes in exchange for a fixed sum called

premiums, to pay the other party called insured a fixed amount of money on the

happening of a certain event."

In simple terms it is a contract between the person who buys Insurance and an

Insurance company who sold the Policy. By entering into contract the Insurance

Company agrees to pay the Policy holder or his family members a

predetermined sum of money in case of any unfortunate event for a

predetermined fixed sum payable which is in normal term called Insurance

Premiums.

Insurance is basically a protection against a financial loss which can arise on

the happening of an unexpected event. Insurance companies collect premiums

to provide for this protection. By paying a very small sum of money a person

can safeguard himself and his family financially from an unfortunate event.

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For Example if a person buys a Life Insurance Policy by paying a premium to

the Insurance company , the family members of insured person receive a fixed

compensation in case of any unfortunate event like death.

There are different kinds of Insurance Products available such as Life

Insurance, Vehicle Insurance, Home Insurance, Travel Insurance, Health or

Mediclaim Insurance etc.

Insurance, in law and economics, is a form of risk management primarily used

to hedge against the risk of potential financial loss. Insurance is defined as the

equitable transfer of the risk of a potential loss, from one entity to another, in

exchange for a premium and duty of care.

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Characteristics of Insurance

1. Sharing of Risk

2. Cooperative device

4. Payment on event of happening of any special event

5. The amount of payment depends on the size and type of loss.

6. The success of Insurance business depends on the law of large number of

people insured against similar risk.

7. Insurance is a business which spreads the loss and the risk of few people in

the large Number of people.

8. The insurance is a plan in which insured transfer his risk to insurer.

9. Insurance is a legal contract

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ORIGINE OF INSURANCE

Almost 4,500 years ago, in the ancient land of Babylonia, traders used to

bear risk of the caravan trade by giving loans that had to be later repaid with

interest when the goods arrived safely. In 2100 BC, the Code of Hammurabi

granted legal status to the practice. That, perhaps, was how insurance made its

beginning.

Life insurance had its origins in ancient Rome, where citizens formed burial

clubs that would meet the funeral expenses of its members as well as help

survivors by making some payments.

As European civilization progressed, its social institutions and welfare practices

also got more and more refined. With the discovery of new lands, sea routes

and the consequent growth in trade, medieval guilds took it upon themselves to

protect their member traders from loss on account of fire, shipwrecks and the

like.

Origin in India

Insurance in India can be traced back to the Vedas. For instance, yogakshema,

the name of Life Insurance Corporation of India's corporate headquarters, is

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Derived from the Rig Veda. The term suggests that a form of "community

insurance" was prevalent around 1000 BC and practiced by the Aryans.

Burial societies of the kind found in ancient Rome were formed in the Buddhist

period to help families build houses, protect widows and children. Bombay

Mutual Assurance Society, the first Indian life assurance society, was formed in

1870. Other companies like Oriental, Bharat and Empire of India were also set

up in the 1870-90s.

It was during the swadeshi movement in the early 20th century that insurance

witnessed a big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control on them.

The Insurance Act was passed in 1912, followed by a detailed and amended

Insurance Act of 1938 that looked into investments, expenditure and

management of these companies' funds.

By the mid-1950s, there were around 170 insurance companies and 80

provident fund societies in the country's life insurance scene. However, in the

absence of regulatory systems, scams and irregularities were almost a way of

life at most of these companies.

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As a result, the government decided nationalizes the life assurance business in

India. The Life Insurance Corporation of India was set up in 1956 to take over

around 250 life companies.

For years thereafter, insurance remained a monopoly of the public sector. It was

only after seven years of deliberation and debate - after the RN Malhotra

Committee report of 1994 became the first serious document calling for the re-

opening up of the insurance sector to private players -- that the sector was

finally opened up to private players in 2001.

The evolution of Insurance in India can be summarized as

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KINDS OF INSURANCE

Insurance is divided in two basic zones:-

1. General Insurance

2. Life Insurance

About General Insurance

Insurance of the non life assets are called general insurance, this includes loss

of asset against water, fire, earthquake etc. With the detarrification in the Indian

Market in General Insurance the monopoly of the general Insurance public

sector’s companies has been broken. With the entrance of the new private

player market innovative technique has been introduced to capture the

markNon-life insurance companies have products that cover property against

Fire and allied perils, flood storm and inundation, earthquake and so on. There

are products that cover property against burglary, theft etc. The non-life

companies also offer policies covering machinery against breakdown, there

are policies that cover the hull of ships and so on. A Marine Cargo

policy covers goods in transit including by sea, air and road. Further, insurance

of motor vehicles against damages and theft forms a major chunk of non-life

insurance business.

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In respect of insurance of property, it is important that the cover is taken for the

actual value of the property to avoid being imposed a penalty should there be a

claim. Where a property is undervalued for the purposes of insurance, the

insured will have to bear a ratable proportion of the loss. For instance if the

value of a property is Rs.100 and it is insured for Rs.50/-, in the event of a loss

to the extent of say Rs.50/-, the maximum claim amount payable would be

Rs.25/- (50% of the loss being borne by the insured for underinsuring the

property by 50%). This concept is quite often not understood by most insured.

Personal insurance covers include policies for Accident, Health etc. Products

offering Personal Accident cover are benefit policies. Health insurance covers

offered by non-life insurers are mainly hospitalization covers either on

reimbursement or cashless basis. The cashless service is offered through Third

Party Administrators who have arrangements with various service providers,

i.e., hospitals. The Third Party Administrators also provide service for

reimbursement claims. Sometimes the insurers themselves process

reimbursement claims.

Accident and health insurance policies are available for individuals as well as

groups. A group could be a group of employees of an organization or holders of

credit cards or deposit holders in a bank etc. Normally when a group is covered,

insurers offer group discounts.

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 Liability insurance covers such as Motor Third Party Liability Insurance,

Workmen’s Compensation Policy etc offer cover against legal liabilities that

may arise under the respective statutes— Motor Vehicles Act, The Workmen’s

Compensation Act etc. Some of the covers such as the foregoing (Motor Third

Party and Workmen’s Compensation policy) are compulsory by statute.

Liability Insurance not compulsory by statute is also gaining popularity these

days. Many industries insure against Public liability. There are liability covers

available for Products as well.

 There are general insurance products that are in the nature of package policies

offering a combination of the covers mentioned above. For instance, there are

package policies available for householders, shop keepers and also for

professionals such as doctors, chartered accountants etc. Apart from offering

standard covers, insurers also offer customized or tailor-made ones.

Suitable general Insurance covers are necessary for every family. It is important

to protect one’s property, which one might have acquired from one’s hard

earned income. A loss or damage to one’s property can leave one shattered.

Losses created by catastrophes such as the tsunami, earthquakes, cyclones etc

have left many homeless and penniless. Such losses can be devastating but

insurance could help mitigate them. Property can be covered, so also the people

against Personal Accident.

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A Health Insurance policy can provide financial Relief to a person undergoing

medical treatment whether due to a disease or an injury.

Name of Life General Company

Royal Sundaram Alliance Insurance Company Limited

Reliance General Insurance Company Limited.

IFFCO Tokyo General Insurance Co. Ltd

TATA AIG General Insurance Company Ltd.

Bajaj Allianz General Insurance Company Limited

ICICI Lombard General Insurance Company Limited

Apollo DKV Insurance Company Limited

Future Generally India Insurance Company Limited

Universal Sompo General Insurance Company Ltd.

Export Credit Guarantee Corporation Ltd.

HDFC-Chubb General Insurance Co. Ltd.

Bharti Axa General Insurance Company Ltd

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About Life Insurance

Life Insurance is insurance for you and your family's peace of mind. Life

insurance is a policy that people buy from a life insurance company, which can

be the basis of protection and financial stability after one's death. Its function is

to help beneficiaries financially after the owner of the policy dies.

It can also be a form of savings in the long run if you purchase a plan, which

offers the option of contributing regularly. Additionally, a little known function

of life insurance is that it can be tied in with a person's pension plan. A person

can make contributions to a pension that is funded by a life insurance company.

These are considered private pension arrangements. In addition, you should also

make a list of what you feel needs to be protected in your family's way of life.

With a life insurance policy in place, you can:

provide security for your family

protect your home mortgage

take care of your estate planning needs

look at other retirement savings/income vehicles

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Life Insurance in India

Life Insurance in India existed from long time. The modern concept of

Insurance was brought by Bruisers in India, and Oriental Insurance Company

was the first Insurance Company who did Insurance for the Indian in 1818 and

was established in Calcutta nowadays Kolkata. Then due to no interference of

government in it, private market players ruled the market as they want to, that is

why government intervened in between to protect the interest of the mass and to

safeguard the money involved in it. Government took the initiative and banned

the private players to involve in Insurance market. All private companies were

took over by Government and Insurance market was turned to Public sector and

Life Insurance Corporation of India was formed in 1956 to make the Insurance

reachable at remote areas and that even by low premiums or better said as

affordable premium so as to secure their life. From the beginning of Insurance

in India till now a lot of changes have been made but the most significant

change was in 1999, when IRDA was formed. IRDA means Insurance

Regulatory and Development Authority. This was formed to rethink upon

opening the insurance sector for the Private players again but along with that to

have a check upon those private players an IRDA has to act as a governing

body to safeguard the interest of the public hose money is involved in it From

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that time i.e. from the year 2001 insurance sector was opened for the

private players too. Since then Insurance

Sector is on the boom and business is flourishing and a lot of private players are

coming into business. Here the private players doesn’t indicate to Indian Private

Companies but also foreign players are also involved in it, but to manage the

money flow in and outside the country IRDA takes care of the contribution of

the money by foreign partners of private insurance companies. To control that

IRDA has set a limit of FDI i.e. 26%.

Name of Life Insurance Company

1. Kotak Mahindra Old Mutual Life Insurance Limited

2. HDFC Standard Life Insurance Company Ltd.

3. Max New York Life Insurance Co. Ltd.

4. ICICI Prudential Life Insurance Company Ltd.\

5. Birla Sun Life Insurance Company Ltd.

6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited .

8. ING Vysya Life Insurance Company Private Limited

9. Bajaj Allianz Life Insurance Company Limited

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10. MetLife India Insurance Company Ltd.

11. Future Generally India Life Insurance Company Limited

12. IDBI Fortis Life Insurance Company Ltd.

13. AMP Sanmar Life Insurance Company Limited.

14. Sahara India Insurance Company Ltd.

15. Aviva Life Insurance Co. India Pvt. Ltd.

16. Shriram Life Insurance Company Ltd.

17. Aegon Religare Life Insurance Company Ltd.

18. Reliance Life Insurance

19. Star Union Dai-chi life Insurance

20. Oriental Life Insurance

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MAJOR PLAYER OF INSURANCE IN INDIA

The Life Insurance Corporation of India (LIC) is the

largest life insurance company in India and also the

country's largest investor. It is fully owned by the

Government of India. It also funds close to 24.6% of the Indian Government's

expenses. It was founded in 1956.Headquartered in Mumbai, which is

considered the financial capital of India, the Life Insurance Corporation of India

currently has 8 zonal Offices and 101 divisional offices located in different

parts of India, at least 2048 branches located in different cities and towns of

India along with satellite Offices attached to about some 50 Branches, and has a

network of around one million and 200 thousand agents for soliciting life

insurance business from the public. Over its existence of around 50 years, Life

Insurance Corporation of India, which commanded a monopoly of soliciting

and selling life insurance in India, created huge surpluses, and contributed

around 7 % of India's GDP in 2006.

The Corporation, which started its business with around 300 offices, 5.6 million

policies and a corpus of INR 459 million, has grown to 25000 servicing around

180 million policies and a corpus of over INR 3.4 trillion.

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Bajaj Allianz General Insurance Company

Limited is a joint venture between Bajaj Finserv

Limited (recently demerged from Bajaj Auto Limited) and Allianz AG. Both

enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration on 2nd May, 2001 to

conduct General Insurance business (including Health Insurance business) in

India. The Company has an authorized and paid up capital of Rs 110 crores.

Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz.

Tata AIG Life Insurance Company Limited (Tata AIG

Life) is a joint venture company, formed by the Tata Group

and American International Group, Inc. (AIG). Tata AIG Life

combines the Tata Group’s pre-eminent leadership position in India and AIG’s

global presence as one of the world’s leading international insurance and

financial services organization. The Tata Group holds 74 per cent stake in the

insurance with AIG holding the balance 26 per cent. Tata AIG Life Insurance

Company was licensed by Insurance Regulatory and Development Authority to

operate in India on February 12, 2001 and started on April 1, 2001.

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Max New York Life Insurance Company Ltd. is a

joint venture between New York Life; a Fortune 100

company and Max India Limited; one of India's leading multi-business

corporations. The company has positioned itself on the quality platform. In line

with its vision to be the Most Admired Life Insurance Company in India, it

has developed a strong corporate governance model based on the core values of

excellence, honesty, knowledge, caring, integrity and teamwork. The strategy

is to establish itself as a Trusted Life Insurance Specialist through a quality

approach to business. Incorporated in 2000, Max New York Life started

commercial operation in 2001. In line with its values of financial responsibility,

Max New York Life has adopted prudent financial practices to ensure safety of

policyholder's funds. The Company's paid up is Rs. 1,782 crore.

ICICI Prudential is a joint venture between

ICICI Bank and Prudential plc engaged in the

business of life insurance in India. ICICI Prudential is the largest private

insurance company and second largest insurance in India after LIC. ICICI

Prudential Life Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse, and prudential plc, a leading international

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financial services group headquartered in the United Kingdom. ICICI

Prudential was amongst the first private sector insurance companies to begin

operations in December 2000 after receiving approval from Insurance

Regulatory Development Authority (IRDA).ICICI Prudential Life's capital

stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential

plc holding 74% and 26% stake respectively. For the year ended March 31,

2008, the company garnered Retail New Business Weighted premium of Rs.

6,684 crores, registering a growth of 68% over the last year and has

underwritten nearly 3 million retail policies during the period. The company has

assets held over Rs. 30,000 crore as on April 30, 2008.ICICI Prudential Life is

also the only private life insurer in India to receive a National Insurer Financial

Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the

highest rating, and is a clear assurance of ICICI Prudential's ability to meet its

obligations to customers at the time of maturity or claims.For the past seven

years, ICICI Prudential Life has retained its leadership position in the life

insurance industry with a wide range of flexible products that meet the needs of

the Indian customer at every step in life.

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INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA)

The Insurance Regulatory and Development Authority (IRDA)[1] is a national

agency of the Government of India, based in Hyderabad. It was formed by an

act of Indian Parliament known as IRDA Act 1999, which was amended in

2002 to incorporate some emerging requirements. Mission of IRDA as stated in

the act is "to protect the interests of the policyholders, to regulate, promote and

ensure orderly growth of the insurance industry and for matters connected

therewith or incidental thereto."

The law of India has following expectations from IRDA

1. To protect the interest of and secure fair treatment to policyholders;

2. To bring about speedy and orderly growth of the insurance industry

(including annuity and superannuation payments), for the benefit of the

common man, and to provide long term funds for accelerating growth of the

economy;

3. To set, promote, monitor and enforce high standards of integrity, financial

soundness, fair dealing and competence of those it regulates;

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4. To ensure that insurance customers receive precise, clear and correct

information about products and services and make them aware of their

responsibilities and duties in this regard;

5. To ensure speedy settlement of genuine claims, to prevent insurance frauds

and other malpractices and put in place effective grievance redressal machinery;

6. To promote fairness, transparency and orderly conduct in financial markets

dealing with insurance and build a reliable management information system to

enforce high standards of financial soundness amongst market players;

7. To take action where such standards are inadequate or ineffectively enforced;

8. To bring about optimum amount of self-regulation in day to day working of

the industry consistent with the requirements of prudential regulation.

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of

IRDA

(1) Subject to the provisions of this Act and any other law for the time being in

force, the Authority shall have the duty to regulate, promote and ensure orderly

growth of the insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-

section (1), the powers and functions of the Authority shall include,

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(a) Issue to the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration;

(b) protection of the interests of the policy holders in matters concerning

assigning of policy, nomination by policy holders, insurable interest, settlement

of insurance claim, surrender value of policy and other terms and conditions of

contracts of insurance;

(c) Specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents;

(d) Specifying the code of conduct for surveyors and loss assessors;

(e) Promoting efficiency in the conduct of insurance business;

(f) Promoting and regulating professional organizations connected with the

insurance and re-insurance business;

(g) Levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers, intermediaries,

insurance intermediaries and other organizations connected with the insurance

business;

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(i) control and regulation of the rates, advantages, terms and conditions that

may be offered by insurers in respect of general insurance business not so

Controlled and regulated by the Tariff Advisory Committee under section 64U

of the Insurance Act, 1938 (4 of 1938);

(j) Specifying the form and manner in which books of account shall be

maintained and statement of accounts shall be rendered by insurers and other

insurance intermediaries;

(k) Regulating investment of funds by insurance companies;

(l) Regulating maintenance of margin of solvency;

(m) Adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

(n) Supervising the functioning of the Tariff Advisory Committee;

(o) Specifying the percentage of premium income of the insurer to finance

schemes for promoting and regulating professional organizations referred to in

clause (f);

(p) Specifying the percentage of life insurance business and general insurance

business to be undertaken by the insurer in the rural or social sector; and

(q) Exercising such other powers as may be prescribed.

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FUNCTION OF THE INSURANCE

PRIMARY FUNCTION:-

1. Provide protection: - As risks controlling is not in the hands of anyone

completely that is why Insurance Company provides the risk protection.

2. Collective bearing of loss: - Insurance Company would have to accept the

loss and give respective claims as for the sake of contract that has been done

between the company and the insured.

3. Assessment of Risk: - There should be the proper assessment of the risk so

as to charge the correct and legible premium to insure the subject matter of

insurance.

4. Provide the certainty: - As the losses appear from the uncertainty so

Insurance Company would have to provide the certainty of absorbing the loss

so as to protect the insured under the risk in which he has been insured.

SECONDARY FUNCTION:-

1. Prevent Loss: - Insurance cautious businessman and individuals to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions.

2. Small capital to large risk: - Small capital is demanded to cover the risk of

the large capital.

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ABOUT KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE

Kotak Group and Mahindra Group had their partnership 1985 between Uday

Kotak and Mr. Mahindra.

Kotak Mahindra is in business since 1985, and insurance part of their business

came into existence in the year 2001.

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Evolution of Insurance business in Kotak Mahindra business is like this:-

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As stated above Kotak Mahindra Life Insurance has Joint venture with Old

Mutual plc. Old Mutual Plc is the 12th largest Insurance Company in the world.

It has its base of over 4 million life assurance policyholders. It has one of the

best “Payouts” among insurers in the world. It has one of the best “Solvency

Ratios” among insurers in the world. A FTSE 100 financial services group and

ranks as a Fortune Global 500 company. The Old Mutual group manages in

excess of 239 billion pounds in funds (Dec’06). The company is 160 years old

and has prominent presence in the United States and the United Kingdom.

Fact of Kotak Mahindra Old Mutual Life Insurance:-

Old Mutual plc. Is a world class international financial services company,

with the operations in life insurance, asset management and banking? It is

one of the big players in the U.S., U.K. and the African Continent.

Over 150 Years of experience in Life Insurance.

One of the best ‘returns’ amongst insurers worldwide.

Base of over 3.8 million Life assurance policyholders.

A FTSE 100 Financial services group, and ranks as Fortune Global 500

Company.

3rd largest insurer listed on London Stock Exchange.

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The Old Mutual group manages in excess of $235 billion in funds i.e., a

total asset base of more than Rs. 11 Lakh core.

South Africa’s largest life insurance, banking & mutual funds company

AUM : US $ 306 billion

Kotak Groups Companies:-

KOTAK MAHINDRA BANK LTD

KOTAK MAHINDRA CAPITAL COMPANY LTD

KOTAK'S INTERNATIONAL BUSINESS

KOTAK MAHINDRA PRIME LTD

KOTAK SECURITIES LTD

KOTAK MAHINDRA ASSET MANAGEMENT COMPANY

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If we look at the status of Kotak Life Insurance’s market share in comparison of

other private company in comparison of premium earned:-

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If we talk the growth of Insurance industry’s private players in recent years, the

data will reflect:-

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TOP 10 LIFE INSURANCE COMPANIES IN INDIA

1. LIC (Life Insurance Corporation of India) still remains the largest life

insurance company accounting for 64% market share. Its share, however,

has dropped from 74% a year before, mainly owing to entry of private

players with innovative products and better sales force.

2. ICICI Prudential Life Insurance Co Ltd is the biggest private life

insurance company in India. It experienced growth of 58% in new business

premium, accounting for increase in market share to 8.93% in 2007-08 from

6.97% in 2006-07.

3. Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its

market share went up to 6.98% in 2007-08 form 5.66% in 2006-07. The

company ranked second (after LIC) in number of policies sold in 2007-08,

with total market share of 7.36%.

4. SBI Life Insurance Co Ltd in terms of new number of policies sold, the

company ranked 6th in 2007-08. New premium collection for the company

was Rs 4,792.66 crore in 2007-08, an increase of 87% over last year.

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5. Reliance Life Insurance Co Ltd Total collected was

Rs 2,792.76 crore and its market share went up to 2.96% from 1.23% a year

back. It now ranks 5th in new business premium and 4th in number of new

policies sold in 2007-08.

6. HDFC Standard Life Insurance Co Ltd with an  income of Rs 2,680 crore

in FY2007-08, registering a year-on-year growth of 64%. Its market share is

2.88% and it ranks 6 th among the insurance companies and 5th amongst the

private players.

7. Birla Sun Life Insurance Co Ltd market share of the company increased

from 1.22% to 2.11% in 2007-08. The company moved to the 7th position in

2007-08 from 8the a year before, pushing down Max New York Life

insurance company.

8. Max New York Life Insurance Co Ltd has reported growth of 73% in

2007-08. Total new business generated was Rs 641.83 crore as against Rs

387.51 crore. The company was pushed down to the 8th position from 7th in

2007-08.

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9. Kotak Mahindra Old Mutual Life Insurance Ltd the

fiscal 2007-08, the company reported growth of 80%, moving from the 11th

position to 9th. It captured a market share of 1.19% in 2007-08. Last year

the company doubled its branch network to 150 from 74.

10. Aviva Life Insurance Company India Ltd ranking dropped to 10th in

2007-08 from 9th last year. It has presence in more than 3,000 locations

across India via 221 branches and close to 40 bancassurance partnerships.

Aviva Life Insurance plans to increase its capital base by Rs 344 crore. With

the fresh investment, total paid-up capital of the insurer would go up to Rs

1,348.8 crore.

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RANKING OF INSURANCE RETURN ON INVESTMENT

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Managing

 Director

Sales Head

Marketing Head

HR &

Admin

Appointed Actuary

CIO Training Head

CFO

STRUCTURE OF KOTAK LIFE INSURANCE:-

MANAGING DIRECTOR: - MR. GAURANG SHAH

CFO; - G. MURALIDHAR

VICE PRESIDENT TRAINING AND MANAGEMENT

DEVELOPMENT: - MR. ARUN PATIL

VICE PRESIDENT HR: - MR. SUGATA DUTTA

VICE PRESIDENTS DISTRIBUTION DEVELOPMENT AND

PLANNING: - MR. KAMLESH VORA

APPOINTED ACTUARY: - JOHN BRYCE

Its hierarchy in Kotak Life Insurance is like this:-

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Marketing Head

Production & Brand Head

Channel Development Head

Regional Mkt Manager

Channel Development TeamProduct Manager Brand Manger

Trade Marketing Manager

Asst. Marketing Managers

MARKETING TEAM STRUCTURE:

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KOTAK’S PRODUCT FOR INDIVIDUAL LIFE INSURANCE

KOTAK RETIREMENT INVESTMENT PLAN (New)

KOTAK SMART ADVANTAGE PLAN

KOTAK SAFE INVESTMENT PLAN 2

KOTAK CHILD ADVANTAGE PLAN

KOTAK SUKHI JEEVAN

KOTAK CAPITAL MULTIPLIER PLAN

KOTAK FLEXI PLAN

KOTAK RETIREMENT INCOME PLAN (UNIT-LINKED)

KOTAK RETIREMENT INCOME PLAN (NON UNIT-LINKED)

KOTAK COMPLETE COVER GROUP PLAN

KOTAK ETERNAL LIFE PREMIER SHIELD

KOTAK HEAD START ASSURE WEALTH

KOTAK HEAD START FUTURE PROTECT

KOTAK EASY GROWTH PLAN (1.25 TIMES)

KOTAK EASY GROWTH PLAN (5 TIMES)

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Traditional Plans:-

ENDOWMENT PLAN

KOTAK TERM PLAN

Kotak’s Product for Group Life Insurance:-

KOTAK SUPERANNUATION GROUP PLAN

KOTAK GRATUITY GROUP PLAN

Additional features;-

RIDERS, NOMINEES, LIFE GUARD

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KOTAK SMART ADVANTAGE PLAN

Make every rupee work for your happiness

In this policy, the investment risk in the investment portfolio is borne by the

policyholder.

Why should we invest in Kotak smart advantage?

Every step in our life brings with it newel earnings. We are determined to make

the best of it, so that we can look forward to a great future. How we shape our

tomorrow depends greatly on how we build on our today.

Kotak Life Insurance introduces Kotak Smart Advantage, a great combination

of investment with insurance, to put our savings to work today. It is a market

linked plan with 100% premium allocations helping us to accumulate wealth

systematically, over the long-term. Kotak Smart Advantage is a great

combination of investment with insurance designed to enable you to make the

best use of your hard-earned money that puts you right ahead.

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Key Highlights

Guaranteed returns of up to 275% of your first year premium at

maturity.

Assured bonus additions at regular intervals during the policy term to

enhance your fund value.

100% allocation of your premiums from second year onwards to

maximize your earning potential.

A unique3 fund offering you the maximum Opportunity for growth.

Option to maximize protection your loved ones.

Tex Benefits to avail under 80 C and section 10 (10D) of the Income Tax

Act, 1961

How does this plan work?

Kotak Smart Advantage optimizes the return on your premiums paid

through a smart mix of assured additions and 100%1 premium

allocation. Your first year’s premium contributes towards

guaranteeing you an Assured Addition Advantage that boosts your

fund value at regular intervals throughout the term of the policy. The

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Longer your premium paying term, the higher will be the value of the

advantage.

The Assured Addition Advantage is a powerful combination of two

benefits:

A. Fixed Advantage

The Fixed Advantage benefit is an assured value guaranteed at the

end of your premium payment term. This benefit is calculated as a

percentage of your first year premium depending on the premium

payment term chosen, provided your policy is in force and all

premiums are fully paid up to date.

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B. Dynamic Advantage

The Dynamic Advantage benefit is an assured bonus addition credited

to your fund value at the end of every 10th, 15th, 20th, 25th and 30th

policy year. This benefit will be calculated as a percentage of the

average value of funds in the three years preceding the benefit

allocation, provided your policy is in force and all premiums are fully

paid up to date.

The Assured Addition Advantage lets you enjoy the benefits of a

fixed assurance and a dynamic benefit directly linked to your fund

value, to help you tread comfortably and swiftly towards your goals.

Further, the plan makes your money work smarter for you through

100%1 premium allocation in each policy year from second year

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Onwards, in the funds of your choice. On maturity of your policy,

you will receive the Fund Value and the Fixed Advantage benefit,

provided your premiums are always fully paid up to date. The

Dynamic Advantage benefit would have already been credited in the

Fund Value at the specified intervals to accumulate more for you at

the end.

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What can you gain by investing in Kotak Smart Advantage?

Smarter Avenues for Growth

Smart investing is based on the fundamental idea of regular savings and the

power of compounding, which is a great way to multiply your money. It makes

small savings transform into jackpots if planned with a long-term vision and

right investment fund options. Kotak Smart Advantage, with its power-packed

and well-defined fund options, gives you unmatched benefits to maximise your

earnings potential. Each of these funds is carefully crafted to suit your

individual long-term needs.

You can distribute your investments across one or more funds based on your

needs and goals, keeping in mind your time horizon and risk appetite.

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You also have the convenience of switching your monies between funds to

balance your needs and risk appetite at different stages of life.

Smarter Financial Protection for your loved ones

Kotak Smart Advantage allows you to shoulder all your responsibilities to the

fullest. In the unfortunate event of loss of life, your beneficiary will receive a

life cover3 benefit equal to the higher of:

Basic Sum Assured; OR

Fund Value plus the Fixed Advantage benefit

You have the flexibility to choose any multiple of your first year premium as

the Basic Sum Assured according to your lifestage needs, subject to

underwriting conditions.

Smarter Savings to avail Tax Benefits

You can avail of tax benefits under Section 80C and Section 10 (10D) of

Income Tax Act, 1961. Tax benefits are subject to change in the tax laws. You

are advised to consult your Tax Advisor

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Eligibility – A Ready Reckoner

48

Plan Snapshot

25-year-old Dinesh realizes the benefits of astute financial planning and wants

to save for the long term in a systematic way. He is looking for a plan that gives

him the comfort that his savings are being put to work from day one and

optimizes his growth potential in the long run. Dinesh has found the solution to

his needs in Kotak Smart Advantage. Given below is an illustration of the

benefits payable to him for an annual premium of Rs. 40,000 for a 30 year term

with a guaranteed basic sum assured of Rs. 600,000:

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Optimal Financial Planning In 5 Easy Steps

Now that you are aware of the Kotak Smart Advantage details, here’s how you

can structure your financial planning in 5 easy steps:

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KOTAK SAFE INVESTMENT PLAN II

Kotak Safe Investment Plan II

is a unit linked plan that

combines the benefits of

insurance and capital market

returns into one. This plan from

the stable of Kotak Life

Insurance is a true reflection of

the company's essence:

innovation that will benefit the

investor. What makes investing in Kotak Safe

Investment Plan II truly unique is that you enjoy a Guaranteed Maturity Value

on your investment, with varying degrees of equity exposure depending on your

risk appetite. So, if the market value of your units is higher, you reap the

benefits, with the peace of mind that whilst in a bear market your investment is

under-pinned and safe by the Guaranteed Maturity Value. And there's more, the

returns are totally tax-free*. Please note that in this policy, the investment risk

in the investment portfolio is to be borne by the policyholder. However,

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Kotak Life Insurance offers you a Guaranteed Maturity Value on this plan to

safeguard against the downside risk of falling markets.

Why should you invest in Kotak Safe Investment Plan II?

Kotak Safe Investment Plan II is an ideal investment option:

• If you have never invested in the equity markets, for the fear of loss of capital.

With Kotak Safe investment Plan II, you need not worry about losing your

capital as you have the downside risk protected by way the Guaranteed Value.

• If you have been an investor in debt markets, you could switch a portion of

your funds to equity markets via Kotak Safe Investment Plan II. The plan offers

you the potential to earn higher returns with the safety net of a Guaranteed

Maturity Value.

• If you are an aggressive investor in equities, you could protect the downside

risk in a bear market by investing a portion of your funds in the Kotak Safe

Investment Plan II. What you are essentially doing is that while you enjoy

equity returns, your money is protected from abysmal lows and market vagaries

by way of a Guaranteed Maturity Value.

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Key Features

Fund Options

The capital markets offer a spectrum of investment options. Similarly Kotak

Safe Investment Plan II has an entire range of fund options: For the risk averse

we have the Guaranteed Gilt Fund and for aggressive investors, we offer the

Guaranteed Growth Fund. With the expertise of Kotak backing your

investments, we ensure that your risk profile and investment objectives are

suitably matched.

Guaranteed Maturity Value

Most investors who stay away from equity do so not because they do not want

to earn higher equity linked returns but because they fear loss of capital. To

protect their money from capital losses they invest in low return debt

instruments. We, at Kotak Life Insurance, having understood this concern of

our investors have developed a unique proposition of a Guaranteed Maturity

Value, underpinning your investment in equity. This unique position arises

from the fact that the plan offers an option to invest up to 80% in equity via the

Guaranteed Growth Fund. On reaching maturity, the Company would pay out

the Guaranteed Maturity Value or the market value of units, whichever is

higher. Which means that when the markets are in a bull phase, you will enjoy

the market linked returns delivered on your portfolio. However, in a bear

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Market, your investment is still safe as you are sure of getting the Guaranteed

Maturity Value. In a nutshell, “Bulls You Win and Bears You Win”. The

Guaranteed Maturity Value applies where all premiums have been paid up-to-

date at maturity and will be reduce where partial withdrawals from the Main

Account have been made. On maturity, you can withdraw the entire maturity

proceeds and the policy would terminate. If the need is not immediate, you can

just let the amount multiply or withdraw up to 50% of the proceeds.

Top-up premium

Besides regular premiums, whenever you have excess money, you can invest it

by way of top-up premiums, without any commitment to bring them again in

the coming year (subject to a maximum of 25% of the cumulative premiums

paid till that date). You can invest your surplus money across a combination of

our Dynamic Funds and units bought from this amount will be held in separate

Supplementary Accounts for each top-up. In the event of maturity or death, you

would receive the market value of these topup units. Partial Withdrawals/

Surrender Kotak Safe Investment Plan II allows you early exit options through

partial withdrawal of funds or complete surrender of the policy. With this plan,

you can your access top-up amount in the investment after rd completion of the

3 policy year, with no penalty charges from year 7 onwards (subject to retaining

a minimum balance of one annualized basic premium). You may access your

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top-up Amount in the Supplementary Account for funds without any charges.

The top-up premiums should complete a lock-in period of 3 years from the date

of investing the top-up amount before you can access the investment.

Withdrawals will be allowed only after the life insured attains the age of 18.

The Guaranteed Maturity Value will be reduced to factor in the withdrawals

made by you.

Limited Premium Payment

If you wish to pay off all premiums over a short period of time, instead of the

full term, we have the Limited Premium Payment option for you. This option

allows you to pay off your premiums over tenure shorter than your policy term.

Under this option, you can pay off your premiums over 3, 5, 6, 7, 10 or 15

years.

Death Benefit

Life is uncertain and you would not want to take a chance when it comes to

your loved ones. Depending on your existing life cover and he need you have,

this plan allows you to choose your life cover - the sum assured on death:

• High Cover: Policy Term x Annual Premium.

• Low Cover: Greater of (5 x Annual Premium, 0.5 x Policy Term x Annual

Premium).

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In the event of unfortunate death, your beneficiary would get the sum assured

(less any withdrawals made during the 2 years immediately preceding death) or

market value of units in the Main Account whichever is higher. Plus, if you

have invested any top-up premiums, then you would get back the market value

of units in the Supplementary Account. After attaining the age of 60, all the

partial withdrawals made after the age of 58, will be deducted from the Death

Benefit. Where the life insured is a minor, the Death Benefit during the first 5

years of the policy term or below the age of 18, will only be the greatest of all

premiums paid (excluding rider premiums) and the value of the units.

Advantages

• Enjoy unlimited upside from capital markets with a downside

Protection guarantee on your maturity value

• Flexibility in premium payment: Limited Premium Payment

Option and Full Term payment option

• Tax free* switching across fund categories

• Increase contribution at will by way of top-up premium

• Easy exit options

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Charges

Premium Allocation Charge

There is an initial advice and distribution charge related to policy issue that is a

percentage of the premium received. The net premium % invested in year 1 is

86% and from year 2 onwards is 96.5%. For topup premiums, the allocation

will be 97.5%. Policy Administration Charge To meet the administration and

support infrastructure cost, there is an administration charge recovered by

liquidation of units. In the first year, the administration charge would be 7% of

the annual premium, for premium up to Rs. 20,000. For portions of the

premium over Rs. 20,000, the charge would be 3%. In subsequent years, for

portions of premiums below and above Rs. 20,000 the charge would be 4% and

2% respectively.

Fund Management Charge

The fund management charge is towards managing your moneys efficiently, to

earn you handsome returns and protect your downside risk. Annual Fund

Management charge, adjusted in NAV is: • Guaranteed / Dynamic Money

Market Fund - 0.6% • Guaranteed / Dynamic Gilt Fund - 1.0%

• Guaranteed / Dynamic Bond Fund - 1.2%

• Guaranteed / Dynamic Floating Rate Fund -1.2%

• Guaranteed / Dynamic Balanced Fund - 1.3%

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• Guaranteed / Dynamic Growth Fund - 1.5% Surrender / Partial Withdrawal

Charge There is no surrender allowed in the first 3 policy years. Thereafter the

charge is 3% in year 4, 2% in year 5, 1% in year 6 and 0% from year 7

onwards. No surrender charges apply to the Supplementary Account. Two

withdrawals a year are free (including after maturity). Thereafter Rs. 500 per

withdrawal is charged. Switching Charge The first four switches in a year are

free. Rs 500 will be charged for every additional switch.

Mortality Charge

This is the cost of life cover and will be levied by cancellation of units

on a monthly basis.

Miscellaneous Charges

The charges for alteration in policy contract (such as change in sum assured,

change in policy term, change in premium mode, etc.) are Rs. 500/-. For

premium redirection a fee of Rs. 100/- will be charged. Please note, in the event

of experience being worse than expected, the Company reserves its right to

impose charges not beyond the level mentioned below:

• The Fund Management and Administration charges may be increased in future

but only if a change takes place for all the participants in that Fund and on prior

written notice to the policyholder.

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• The administration charge will not be increased by more than 40% from the

original level, for the first 10 years and 100% after 10 years.

• The surrender charge on Supplementary Account may be increased to a

maximum of up to 5% of the value of units after the third policy year.

• The switching and withdrawal charges may be increased to a maximum of Rs.

1000.

Eligibility

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KOTAK CHILD ADVANTAGE PLAN

"What is Kotak Child Advantage Plan?"

The Kotak Child Advantage Plan is an investment plan designed to meet your

child's future financial needs. It's a plan that gives your child the "azaadi" to

realize his dreams. The plan is a participating plan with a 15-day free look

period.

"Who can avail of this plan?"

HOW OLD DOES THE CHILD HAVE TO BE TO AVAIL OF THIS PLAN?

Minimum age - 0 yearsMaximum age -17 years

FOR WHAT TERM CAN I AVAIL OF THIS PLAN?

10 - 30 years

WHAT IS THE MAXIMUM SUM ASSURED ALLOWED UNDER THIS PLAN?

Rs.25,00,000

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"What are the advantages of this plan?"

On Maturity, you would receive the sum assured plus the bonus addition.

Bonus addition is the amount in the Accumulation Account*, in excess of

the sum assured.

The balance available in the Accumulation Account is invested in various

financial instruments (as per IRDA regulations) so your money works hard

to earn more for your child.

The Automatic Cover Maintenance facility ensures the policy remains in

force even if you miss premium payments. This facility is available after the

first three years of the Term.

You can take a loan against this plan, after the policy has been in force

for at least three years.

You have the option of paying premiums quarterly, half yearly or yearly.

You have the benefit of a 15 day free look period.

"What value-adds can you opt for?"

You may avail of these value adds for a nominal premium at the time of taking

the plan. The aggregate premium of the value-adds should not exceed 30% of

the basic policy premium.

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Life Guardian Benefit:

In case of the unfortunate death of the premium payer, this

benefit keeps the policy alive by waiving all future premiums on the policy.

Accidental Disability Guardian Benefit:

In case the premium payer is permanently disabled as a result of accident, this

benefit keeps the policy alive by waiving all future premiums on the policy.

Tax Benefit:

Section 80C, 10(10D) of Income Tax Act, 1961 would apply. You are advised

to consult your tax advisor for details.

"How does this plan work?"

Mr. Sanjay Gupta is a 30-year-old professional and has a 6-year-old son. To

secure his child's future, Mr. Gupta decides to buy the Kotak Child Advantage

Plan. He wants to buy a plan with a sum assured of 5 lakh, term of 15 years, so

that when the child is 21 years old, he has at least Rs.5 lakh to invest in his

education/ career etc.

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Mr. Gupta buys the Kotak Child Advantage Plan along with both the

value-adds offered with the basic plan.

Description Premium

KOTAK CHILD ADVANTAGE PLAN PREMIUM 31,857

LIFE GUARDIAN BENEFIT PREMIUM 1,225

ACCIDENTAL DISABILITY GUARDIAN BENEFIT

PREMIUM155

Total Annual Premium Paid 33,237

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"What happens in the event of death of the life

insured?"

In the event of the unfortunate death of the insured during the term of the plan,

the following would become payable:

If the policy has been in force for five years or if the life insured is at

least 18 years old, the beneficiary will receive either the Sum Assured or

Accumulation Account whichever is higher, as on the date of death.

If the death occurs within five years from commencement of policy and if

the insured is less than 18 years old, the death benefit would be either the

total of all premiums paid so far or the surrender value at that time,

whichever is higher.

"General   exclusion"

In case the life insured commits suicide within 1 (one) year of the plan, no

benefits outlined in the plan would be payable.

No claim under the Kotak Life Guardian Benefit would be admitted if, within

one year of the date of issue of this policy, the premium payer commits suicide,

whether being sane or insane at the time of committing suicide.

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No claim under the Kotak Accidental Disability Guardian

Benefit would be admissible in the following circumstances:

(1) The premium payer suffers from self-inflicted injuries, attempt to suicide,

insanity, immorality, committing any breach of law or being under the

influence of drugs, liquor etc.

(2)   Where the premium payer is engaged in aviation or aeronautics other than

as a passenger on a licensed commercial aircraft operating on a scheduled route.

(3) The premium payer suffers injuries from war (whether war is declared or

not), invasion, hunting, mountaineering, motor racing of any kind, other

dangerous hobbies or activities, or having been on duty in military, Para-

military, security or police organization.

65

KOTAK SUKHI JEEVAN

Life is unpredictable, but the earlier

you plan for your future, the more

likely are you and your family to

reap the rewards. Introducing ‘Sukhi

Jeevan’, a long-term savings and

protection plan from Kotak Life

Insurance that allows you to plan for

your changing needs at every step of

life - be it saving for your kids, or your retirement. It helps you prepare for

important milestones and, most importantly, it ensures your family is secure

when life dishes up harsh misfortunes.

How does this plan benefit me?

Savings for your needs

You would have different financial needs to be met and investing small

amounts in a disciplined manner will help you accumulate a sizeable lump sum.

To structure a plan that is ideal for your needs, it is important for you to

estimate the amount of lump sum required for your goals, i.e. the sum assured.

66

Based on this, you would have to set aside small amounts to have an

accumulated lump sum.

Enjoy bonuses

Each year, the company would declare a simple reversionary bonus on the sum

assured of your policy, from the surplus earned on its participating policy funds.

The bonus, once declared, is guaranteed and would be paid on maturity of the

policy or in the event of death. An interim bonus would be paid in case of a

death claim during the course of the year. Also, if you have paid all your

premiums regularly for 15 or more years, a terminal bonus may be paid by way

of a reward for disciplined savings over the long-term.

Help your kids reach their dreams, or enjoy your retirement

On maturity, you will receive the sum assured along with all the bonuses

declared on the policy. You are likely to require money as your children begin

pursuing higher education and considering careers, marriage and family. As the

years roll on, you may choose to cease working or slow down your business

activities, and there may be expenses that need to be met. Since all these

expenses come along at different times and in varying amounts, this plan allows

you the flexibility to utilize your accumulated kitty in a phased manner after

maturity. At the end of the term, you can withdraw the entire maturity proceeds

and the policy would terminate.

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Provide protection along the way for your loved ones

Provided the premiums are paid regularly, if you meet your unfortunate demise

during the policy term, from the second year on, your beneficiaries will receive

the full sum assured, along with the reversionary bonus declared and interim

bonus, if any. In year 1, on accidental death, they will receive the sum assured

plus bonus, and on natural death, return of the premiums paid (less any rider

premium and extra premium). In case the life insured is a minor, the death

benefit will be a return of premiums paid if death occurs within 5 years from the

date of commencement or before attainment of age 18, whichever is earlier.

Similarly, in the event of permanent accidental disability, installments will be

paid out, should you select the Permanent Disability rider available at a small

additional premium. The life cover will continue.

68

How do I apply for this plan?

Step 1: Decide the total amount you require on maturity (sum assured).

Step 2: Decide the term of the policy depending on the goals that you have in

mind. If you would like to choose a term of 15 years, given below are

premiums for a few combinations of age and sum assured.

Eligibility

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Other terms

Surrender

On receipt of all the premiums for a period of at least 3 consecutive years, the

policy shall acquire a guaranteed surrender value from that time on. The

guaranteed minimum surrender value will be 30% of all premiums paid to date,

excluding the first year’s premium and any other extra premiums. The

Company may consider paying an enhanced surrender value, which will not be

less than the guaranteed surrender value as stated above.

Grace period

There is a grace period of 30 days from the due date for payment of premium

for the yearly and half-yearly mode, and 15 days for the monthly mode.

Lapses

Where the premiums for the first 3 policy years are not paid within the grace

period, the policy together with the rider benefit, shall lapse from the due date

of unpaid premiums. A lapsed policy can be revived within 2 years of the date

of lapse by payment of arrears of premiums with interest and collection charges.

After payment of 3 years premiums, if future premiums are not paid within days

of grace and you have not opted for surrender, an extended risk coverage period

of 2 years or up to the date of maturity, whichever is earlier, is

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Provided by default. The benefit payable on death during this extended risk

coverage period of 2 years is the sum assured plus any accrued bonuses, less

any unpaid premiums due at the date of death.

Paid up

On receipt of at least 3 years premiums and after completion of 3 full policy

years, you can elect to stop paying future premiums and make the policy paid

up. The rider benefits will cease and the policy will cease to participate in future

profits. The benefit payable on death, within 2 years from the date of the first

unpaid premium, will be the sum assured plus any accrued reversionary

bonuses up to the date of the first unpaid premium, less any unpaid premiums

due at the date of death. This benefit of payment of sum assured will be

available only if death happens during the 2 years following the policy

becoming paid up for the first or second time during the policy term.

If death occurs any time after the policy becomes paid up for the third or

subsequent time during the policy term, only the reduced paid up value and

vested bonuses will be payable. The sum assured will be reduced by a factor

equal to the proportion of the number of premiums paid to the total number of

premiums payable.

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Policy revivals

The policy may be revived within 2 years from the date of the first unpaid

premium by making payment of the arrears of premiums with interest and

collection charges. Any revivals after six months from the due date of unpaid

premium will require production of evidence of good health.

Loans

Loans will be granted once the policy acquires a surrender value. The loan will

be a maximum of 80% of the surrender value, available at a market related rate

of interest. Interest will be compounded and payable semi-annually.

Accidental death

In the event of accidental death during the first year, the benefit will become

payable subject to the following:

1. This benefit is in full force on the day of the accident.

2. The life insured has sustained any bodily injury directly and solely from the

accident, which has been caused by outward, violent and visible means.

3. The death occurs within 120 days of the date of the accident due to such

injury as stated above, solely, directly and independently of all other causes of

death.

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LONG LIFE SECURE PLAN

Both joys and successes come

with their fair share of

uncertainties – uncertainties you

constantly strive to insulate your

family from. Protecting your

family and ensuring their comfort

has always been your primary

concern and key responsibility.

All responsibilities require careful

planning; for yourself and your

family, for the present and the future. Careful planning is all about the right

investment strategy secured with appropriate protection - a necessary cushion to

face the unexpected events of life.

To ensure that your investments give maximum protection to secure your

family’s future and their financial independence, we at Kotak Life bring to you

the Kotak Long Life Secure Plus plan. It is a unit-linked plan that gives you the

dual benefit of:

Fulfillment of your family goals without any obstacles

Comfort of meeting unplanned events head on

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Enhanced Protection for Your Family

Superior Protection

Life is uncertain, so when it comes to your family’s future, you would not want

to leave anything to fate. Your absence is bound to leave an irreplaceable void

in the life of your family. At such a trying time, Kotak Long Life Secure Plus

can ensure that the dreams you aspired for your family, don’t remain

unfulfilled. Moreover, it will assist in meeting the planned and unplanned

financial obligations your family may face under such a circumstance. This plan

provides you the following benefits1 on death of the life insured:

100% of the Sum Assured paid out immediately

plus Fund Value

An additional “Lump sum Benefit*”, on death of the policyholder, equal to

your outstanding premiums (i.e. basic premium x number of outstanding

installments) is added into the policy fund. This corpus of the fund value and

additional “Lump sum Benefit” would be available immediately or by way of

equal semi-annual installments for 5 years (settlement option9).

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Timely Protection 

Accidents are a harsh reality that no one can ever be prepared for. In the

unfortunate event of a permanent accidental disability, all plans tend to go

awry. However, in such circumstances, Kotak Long Life Secure Plus steps in

as a complete protection plan. The additional “Lump sum Benefit” equal to

your outstanding premiums (i.e. basic premium x number of outstanding

installments) will also be paid by Kotak Life in case of a permanent accidental

disability2 of the policyholder. This will ensure that your policy continues with

an immediate lump sum addition into your fund account. The planned amount

for your dreams continues to accumulate with no future premium payment

obligations. In this way, Kotak Long Life Secure Plus ensures that neither you

nor your family loses out on the benefits you had originally planned for.

Boosted Protection

Kotak Long Life Secure Plus offers you a range of options to ensure

comprehensive protection throughout the policy term for your family against

any eventuality. You can opt for additional rider benefits for protection against

critical illnesses and accidental death. In case of a critical illness, a portion of

the sum assured will be immediately made available to you and your family.

Should an unfortunate accident lead to a sudden demise, an additional benefit

would be paid out on opting for the accidental death benefit (ADB) rider.

75

Accessible Protection

With costs being different for every need, the financial requirements for your

family’s comfort would change from time to time. Kotak Long Life Secure Plus

is designed in a way that it takes these changing needs and unfortunate

emergencies into account.

You can access your investments after completion of the 3rd policy year

by way of partial withdrawals or surrender. There will be no surrender

charges from year 11 onwards.

On maturity you can avail of the full fund value and the policy terminates

OR selects the settlement option. Through this option you can elect to

receive a percentage of the maturity proceeds in cash and the balance by

way of pre-selected periodic installments, for up to 5 years after maturity

(settlement period)9. All insurance cover will cease on the maturity date

of the policy.

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Enhanced Protection for Your Growing Investments

Protected Growth

Economic stability is an important aspect to consider while planning for your

family’s future security. After all, costs and needs only keep increasing as the

years go by. This makes it important for your investments to grow alongside

too. Equity exposure is essential to keep pace, but it Rquires you to keep a

constant eye on the volatile market. Switching your money efficiently from one

fund to another to balance risk and return is not an easy task. Understanding

this, Kotak Long Life Secure Plus brings you the unique Dynamic Floor Fund,

which allows you to enjoy the benefits of a rising capital market, but actively

trims back your equity exposure during a slump, thus locking in your gains and

shielding your savings from the market volatility.

77

Eligibility – A Ready Reckoner

78

Illustration

Mr. Dutt is a 35-year-old professional, working in a private organization. He

lives with his dependent parents, wife and child. He is looking for ways and

means of protecting his family and their future from unexpected vagaries of life.

He also needs a plan that allows his hard-earned savings to grow, but with

adequate protection - A plan that protects his family’s interests and goals, come

what may. Mr. Dutt has the perfect solution in Kotak Long Life Secure Plus.

Given below is an illustration of the benefits payable to Mr Dutt in different

scenarios with a sum assured of Rs. 500,000:

Net yield (gross of mortality charges) at 6% investment return 4.59%

Net yield (gross of mortality charges) at 10% investment return 8.50%

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Charges

Premium allocation charges

An allocation charge that is a percentage of the premium received is levied. The

first premium will be allocated at the NAV12 of the date of commencement of

the policy and the subsequent renewal premiums will be allocated at the NAV

prevailing on the date of receipt of the premiums13.

The table below gives you details of the percentage of premium invested in

each policy year:

The Premium allocation after year 10 would be 100%. For Top up premiums,

the allocation will be 99%.

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Fund management charge (FMC)

To manage your money efficiently, thereby enabling you to earn handsome

returns, an annual fund management charge that is a percentage of the fund

value, is applicable. Here are the details for your easy reference:

Administration charge

A nominal flat fee of Rs. 75 per month in year 1 and Rs. 40 per month from

year 2 onwards inflating at 5% every year is recovered by monthly deduction of

units. Administration charges for annual premiums of Rs. 1 Lac and above are

waived. The renewal administration charge at the prevailing level is re-instated

where premiums are reduced below Rs.1 Lac. In ACM mode, the renewal

administration charges will continue to apply at the prevailing level.

Partial withdrawal charge

Partial withdrawal is not allowed in the first 3 policy years. The partial

withdrawal charge expressed as a percentage of the amount withdrawn is as

follows : 5% in the 4th and 5th year, 2.5% from the 6th to 9th year, 1% in the

10th year and no charges thereafter. There is an additional charge of Rs. 500 per

withdrawal for the third and subsequent withdrawal in a policy year.

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Mortality and Disability charge

This is the cost of life cover, calculated as per thousand Sum at Risk (Basic

Sum Assured + Lump sum Benefit) which will be levied by cancellation of

units on a monthly basis. The indicative mortality charge per thousand sum at

risk for a healthy individual will be:

Lifelong Security in 5 Easy Steps

Now that you are aware of the Kotak Long Life Secure Plus details, here’s how

you can ensure your family’s comfort and happiness in 5 easy steps.

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KOTAK CAPITAL MULTIPLIER PLAN

Kotak is the only plan of its kind that allows the return to be enjoyed beyond

maturity. It is a kind of super endowment plan that offers the bonus every year,

and also offers the facility to increase the investment and it also offers the

facility to withdraw the money as when wants to over a 15 year period post

maturity, apart from that additional life cover of 10%, which is over and above

the life cover which has been opted. Other Features like surrender to the policy

can be opted out of any medical urgency, following riders can be opted:-

· Preferred term Benefit

· Accidental Death Benefit

· Permanent disability Benefit

· Critical Illness Benefit

· Life Guardian Benefit

· Accidental Disability Guardian Benefit

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KOTAK ENDOWMENT PLAN

"What is Kotak Endowment Plan?"

Kotak Endowment Plan is a protection plan that covers your life and at the

same time ensures that your money does not lie idle. It invests a portion of your

premium in financial instruments and ensures a considerable growth in savings.

This is a participating plan (with profits).

Who can avail of this plan?"

HOW OLD DO YOU HAVE TO BE TO AVAIL OF THISPLAN?

Minimum age - 18 yearsMaximum age - 65 years

FOR WHAT TERM CAN I AVAIL OF THIS PLAN?

10-30 years

WHAT IS THE MAXIMUM AGE THAT THE PLAN CAN COVER YOU TILL?

75 years

What are the advantages of this plan?"

1. On maturity, you would receive the sum assured plus the bonus addition.

Bonus addition is the amount in the Accumulation Account*, in excess of

the sum assured.

2. The amount available in the Accumulation Account is invested in various

financial instruments (as per IRDA regulations) so your money works

harder for you.

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3. The Automatic Cover Maintenance facility ensures the policy remains in

force even if you miss premium payments. This facility is available after

the first three years of the term.

4. You can take a loan against your policy, after the policy has been in force

for at least three years.

5. You have the option of paying premiums quarterly, half yearly or yearly.

You also have the flexibility to pay premiums through the full term of the

policy or pay it for a fixed term of 3, 5, 7, 10 or 15 years.

6. You have the benefit of a 15-day free look period.

"What value-adds can you opt for?"

You may avail of the following value-adds for a nominal premium at the time

of taking the plan, subject to the aggregate premium on all value-adds not

exceeding 30% of the basic plan premium.

Term Benefit / Preferred Term Benefit: In the event of death during the term

of this benefit, the beneficiary would receive an additional death benefit

amount, which is over and above the sum assured. The maximum term benefit

you can avail of is equal to the basic sum assured.

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Accidental Death Benefit: This benefit provides an additional amount (over

and above the basic sum assured) to the beneficiary in the event of the

accidental death of the life insured. The maximum cover available under this

benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).

Permanent Disability Benefit: This benefit provides financial support in case

of your permanent disability due to an accident. The amount payable is over

and above the basic sum assured and would be paid out as an annuity. The

maximum Permanent Disability Benefit that you can avail of is equal to the

basic sum assured (subject to a maximum of Rs.10 lakhs).

Critical Illness Benefit: This benefit can be taken with the basic life insurance

policy to provide financial support in the event of medical emergencies. On the

first occurrence of critical illness during the term of the policy, you would

receive a portion of the sum assured to reduce your financial burden in this

emergency. The maximum Critical Illness Benefit that you can avail of is equal

to half the basic sum assured subject to maximum of Rs. 20 lakhs

Life Guardian Benefit: This benefit can be availed of, only in a case where the

life insured and the propose are two different individuals. In case of the

unfortunate death of the propose, this benefit keeps the policy alive by waiving

all future premiums on the policy.

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Accidental Disability Guardian Benefit: In case the proposer is permanently

disabled as a result of an accident, this benefit keeps the policy alive by waiving

all future premiums on the policy. This benefit is available also where the life

insured is the proposer.

"How does this plan work?"

Mr. Sanjay Gupta, who is 30 years old, decides to buy a Kotak Endowment

Plan for a sum assured of Rs. 5,00,000 for a 20-year term for his wife, who is

aged 28. Mr. Gupta decides to take the Life Guardian Benefit as a rider to the

plan. He does this to provide enhanced security and protection to his wife.

The annual premiums paid by Mr. Gupta are as follows   Amount (Rs.)Kotak Endowment Plan Premium 22,552Life Guardian Benefit Premium 1,106Total Annual Premium Paid 23,658

What would be the payout maturity?

On maturity Sanjay Gupta would receive the sum assured or Accumulation

Account, whichever is higher. Assuming that the Accumulation Account grows

at a rate of 6%, the payout on maturity would be Rs. 6,93,800. At a growth rate

of 10%, the maturity amount payable would be Rs. 10,97,700.

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KOTAK ETERNAL LIFE PLANS

Kotak Eternal Life Plans are participating whole life plans that provide

enhanced protection till the golden age of 99. The plans provide for a high

cover at lower premiums, cash lump sum benefits at desired stage and a way to

care for your spouse in the second innings of life.

With guaranteed protection for life, opportunity to create wealth, and

comprehensive cover options, these plans provide you with a perfect financial

solution to suit your needs.

"What can Eternal Life do for you?"

Provides you with lifelong protection which continues well beyond

retirement to ensure that your loved ones remain secure, irrespective of

the uncertainties in life.

Enables a high amount of insurance cover at affordable premiums which

takes into account your growing responsibilities and keeps pace with

your increasing needs.

Offers liquidity for planned and unplanned needs so that you have access

to your money when you need it the most, adding to your comfort and

security at important stages in life.

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"Why Eternal Life Plan?"

Permanent and complete protection till your 99th birthday

o Insurance cover that extends well beyond 60-70 years, to protect

your loved ones till you turn 99

o Guaranteed Death Benefit till age 99

o A complete protection package guarding you against risk of Death,

Disability* as well as Critical Illness^

Adequate protection to meet your growing needs

o High amount of insurance cover that is almost 25-45 times the

initial premium paid

o Regular bonuses# that boost guaranteed death benefit to provide

for higher protection during and after the premium payment term

Cash lump sum to fulfill your dreams

o A significant cash lump sum paid at the end of the premium

payment term to secure your dreams (Bonuses# accumulated till

the end of the premium paying term)

o In case of emergencies, loan facility can be provided to help you

tide through adversities.

Increased choice through a range of plan options

o Increasing Premium Option that keeps income and offers

affordable protection from the start

o A few years of premium payment (option to choose between 10-40

years) offers a lifetime of protection

o Special rates for females and non-smokers (For Sum Assured

greater than Rs. 10 lakhs)

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"How does the product work?"

Step 1: Choose your life cover - the basic Sum Assured, based on your existing

insurance cover and needs.

Step 2: Decide the number of years you wish to pay premiums, based on your

personal and financial goals.

Step 3: Choose a plan from two unique variants based on premium option

preference.

Step 4: Receive a lump sum Cash Benefit at the end of your Premium Payment

term.

Step 5: Get guaranteed protection till your 99th birthday and enjoy the potential

for additional bonus boosts to your life cover along the way!

Key Features:

Lifelong cover protection till age 99 with a few years of premium

payment.

Higher Protection at affordable premiums

Complete safeguard against uncertainties of Accidental Disability# and

Critical Illness^

Lump sum Cash at the end of the premium payment term

Premiums that match your preference and lifestyle

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Tax Benefits under Sec 80C and Sec 10(10) D.

KOTAK MONEY BACK PLAN

"What is Kotak Money Back Plan?"

The Kotak Money Back Plan not only covers your life, it also assures you a

certain percent of the sum assured as cash payment at regular intervals of every

5 years. It is a savings plan with the added advantage of life cover and regular

cash inflow. This plan is ideal for planning special moments like a wedding,

your child's education or purchase of an asset etc. This is a participating plan

"What are the advantages of this plan?"

The plan not only covers your life but also provides you with a survival

benefit payout every 5 years.

In the unfortunate event of death of life insured, the beneficiary would

receive the death benefit. The death benefit keeps increases by 7% of the

sum assured every year.

On maturity, you would receive the sum of the Survival Benefit, Bonus

addition* and Guaranteed addition**.

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"What do you receive on maturity of this plan?"

On maturity, you would receive the sum of the Survival benefit,

Guaranteed addition and Bonus addition. The table below illustrates the

survival benefit pay out for every Rs.1000 of sum assured.

 Survival Benefit Payout for every Rs. 1000 Sum AssuredPayouts (in Rs.)   5th

year10th year

15th year

20th year

25th year

15-year Plan           Survival Benefit 250 250 500     Guaranteed Addition - - 200*    

20-year Plan           Survival Benefit 200 200 200 400   Guaranteed Addition - - - 300*  

25-year Plan          Survival Benefit 150 150 150 150 400 Guaranteed Addition - - - - 400*

*The Bonus Addition, if any, is payable over and above these benefits

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DIFFERENT METHOD OF MARKETING ADOPT BY KOTAK

Using Brand name KOTAK and its effect can be seen as previously Kotak Life

Insurance needed a name Old Mutual with its name but now people Kotak by

the name of Kotak only not by the name of OM Kotak.

Kotak always expressed itself as always close to Customers with the help of:-

Advertising

Merchandising

Corporate Stationery

Tele Marketing is marketing the product through telephone. The most

important aspect of Tele Marketing is COLD CALLING, HOT

CALLING, and OBJECTION HANDLING.

Cold Calling means Calling to the unknown telephone number for the

first time and that even without knowing the respondent.

Hot Calling means Calling to already approached person for the further

response.

Objection Handling means to handle the type of objection that may arise

while calling.

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That is what we have done in our Tele Marketing in our summer training.

By different type of calling we used to generate the LEAD for the further

business.

CHANNEL MARKETING

Distribution Network of Individual Life Insurance Business in India

Direct selling part includes Tele marketing through advertisements etc.

Brokers are the one who can sell the insurance product of a lot of company and

is appointed by the company but works for the individual and earn brokerage

through company.

Life Advisors is the name given to the traditional “Agent” which we often hear.

Life Advisor is the one who can sell the insurance product of only one company

and commission is what he earns in reference to the business provided by him.

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MARKETING STRATEGY OF ALL THE COMPANIES IS DIFFERENT BESIDES THE LOT OF SIMILARITY

IN THE PRODUCTS.

If we see the data then we will find that Kotak Mahindra Life Insurance has

very less number of branches according to the latest data in annual report of

2006-2007 by IRDA, Kotak Mahindra Life Insurance has 75 branches, but the

premium that they offer to Insurance Industry is 971 cores, and the number of

life advisors are not much if we compare it to other companies so from where

does this Premium is amounting this much, it shows that Kotak focuses on big

business houses, i.e. they are much desperate for their business with elephant

then humming birds.

If we see the things in a different fashion then we will find that the Kotak is

having the shield of Guaranteed Maturity Value which is the feature which a

few company (Max New Year Life) has. No doubt the company is having a

long list of the product with them. Variety is there as in the range of the product

varies from Child product to retirement solutions, but there focus is in CHILD

PLAN as their CHILD PLAN; KOTAK HEADSTART WEALTH ASSURE

PLAN was a huge success.

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SWOT ANALYSIS

Strength:

Money Power, which makes them ignorant about the gestation period

Brand image, business experience, and innovative products

The agents are very selectively chosen have excellent communication

skills

Service quality, which is crux of their mission

Large network branches which is helped to customer for the payment

Strong and popular brand name.

Weaknesses

High targets for financial advisors and for the sales departments.

Many competitors in the market offer same product by the title difference

the premium and offerings.

Sustainable to Rick associated with investment in money market.

Try to catch middle-lower level people also.

Lack of awareness about insurance among people

Less coverage in Rural Areas

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Opportunity

Huge market is laterally untapped; out of estimated 320 millions

insurable markets only 20% of the population is insured.

Health insurance and pension schemes, an estimated market potential of

approximately $15 billion

Kotak Life Insurance should give the insurance coverage both to the

parent and child so that their life could be covered in both cases. The

Customer doesn’t mind paying some extra premiu7m for that.

Fast growing economy.

Threats

Players like bajaj and birla sun life with low premium for the similar

plans Entry of many other private companies with equally strong experience

and financial strength of foreign partners making the competition difficult

and saturating the urban markets.

Current Govt. Policies do not encourages gross domestic saving. If the

tax liability of the services class rises, the customer will have little money to

invest.

LIC has woken up from sleep and is following competitive strategies. Its

huge surplus in life fund gives a capability to lodge price war.

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RESEARCH METHODOLOGY

SOURCE OF DATA

Data’s are the useful information or any forms of document designed in a

systematic and standardize manner which are used for some further

proceedings. One of the important tools for conducting marketing research is

the availability of necessary and useful data. Some time the data are available

readily in one form or the other and some time the data are collected afresh. The

sources of Data fall under two categories, Primary Source and Secondary

Sources.

Primary Data- the primary data was collected through the following

activities: Filled the Insurance Industry related questionnaire to managers of a

select group of companies And Paper Conversation

Secondary Data- the secondary data was collected through the following:

Online Research material of the Various Financial Institution directly or

indirectly involved with Insurance Industry, Secondary Data used in External

Source of Information Like internet, magazine, paper cutting.

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OTHER SOURCE

Information Sources

Information has been sourced from namely, books, newspapers, trade

journals, and white papers, industry portals, government agencies, trade

associations, monitoring industry news and developments, and through

access to access to more than 3000 paid databases.

Analysis Method

The analysis methods include the following: Ratio Analysis, Historical

Trend Analysis, Linear Regression Analysis using software tools,

Judgmental Forecasting and Cause and Effect Analysis etc.

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OBSERVATION & CONCLUSION

Kotak is spreading its channel of distribution

75 was the number of branches that Kotak had it in 2006-2007 and their

target is to open 135 branches till the end of the calendar year 2008.

Number of Life Advisor has increased over time. E.g. At the beginning

of financial year 2006-2007, Kotak had 12,523 Life Advisors which

turned to 24485 at the end of the end of the financial year 2007.

Kotak focuses on large business house inspire of capturing the smaller

business.

Less action on tale-marketing and dependence on individual life advisors

is much there.

Weak Infrastructure as there was hardly any place left open for the

interaction with the customer.

Too much work load on operations’ department

Lack of database on which work (calling) can be done.

High commitment of Sales Managers toward the work.

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BIBLIOGRAPHY

1. Money Outlook, 2008 edition

2. Marketing Management, Kotler & Keller

3. Principles of Life Assurance, IC-23

4. Practice of Life Assurance, IC-02

5. IC-33

6. IRDA Annual Report, 2008-2009

Websites:-

1. www.irdaindia.org

3. www.insuranceworld.com

4. www.findarticles.com

5. www.kotaklife.com

Special Thanks to:-

Wikipedia, the free encyclopedia.htm

http://www.google.com

http://www.economywatch.com/business-and-financial/IPO-industry

Other sources:-

1. The Economic Times

2. Blogs by admin

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