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MPBIM 1
INTERNSHIP REPORT ON
BAJAJ ALLIANZ LIMITED
Submitted in partial fulfillment of the requirements of the MBA Degree Course of Bangalore University
Submitted By
Annapurna.N.K
Under the Guidance and Supervision Of
Dr.N.S Viswanath
M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan
# 43, Race Course Road Bangalore-560001
2004 – 2006
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EXECUTIVE SUMMARY
What is life insurance �
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�The increasing role of IRDA- Insurance Regulatory development authority and
the increasing private players in today’s insurance industry has also been picturised The
project also gives a birds eye view about the present insurance industry and how are the
customers benefited from the changes taken place from past to present in this industry
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�¬¬��The project titled “a comparative study of different products in
insurance industry with that of Bajaj Allianz life insurance Company
limited” is undertaken at Bajaj Allianz Life Insurance Company Ltd,
Bangalore.��
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¬¬��The project is undertaken in order to understand the different
products of different companies and compare them based on
certain parameters.��
¬¬��The main aim of conducting this study is to come out with a
conclusion as to which product of which company is doing best
and from the customers point of view which product is the best for
their investment.��
¬¬��The companies considered for comparison are Bajaj Allianz Life
Insurance Company Ltd, ICICI Prudential and Life Insurance
Corporation of India. The products considered for the project are
endowment plan, unit linked plans and the children plan.��
��
����
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INDUSTRY PROFILE
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LIFE INSURANCE IN INDIA INTRODUCTION
With such a large population and the untapped market area of this population Insurance
happens to be a very big opportunity in India. Today it stands as a business growing at
the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per
cent to the country’s GDP .In spite of all this growth the statistics of the penetration of
the insurance in the country is very poor. Nearly 80% of Indian populations are without
Life insurance cover and the Health insurance. This is an indicator that growth potential
for the insurance sector is immense in India. It was due to this immense growth that the
regulations were introduced in the insurance sector and in continuation “Malhotra
Committee” was constituted by the government in 1993 to examine the various aspects
of the industry. The key element of the reform process was Participation of overseas
insurance companies with 26% capital. Creating a more efficient and competitive
financial system suitable for the requirements of the economy was the main idea behind
this reform.
Since then the insurance industry has gone through many sea changes .The competition
LIC started facing from these companies were threatening to the existence of LIC. Since
the liberalization of the industry the insurance industry has never looked back and today
stand as the one of the most competitive and exploring industry in India. The entry of the
private players and the increased use of the new distribution are in the limelight today.
The use of new distribution techniques and the IT tools has increased the scope of the
industry in the longer run.
A BRIEF HISTORY
The origin of insurance is very old .The time when we were not even born; man has
sought some sort of protection from the unpredictable calamities of the nature. The basic
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urge in man to secure himself against any form of risk and uncertainty led to the origin of
insurance.
The insurance came to India from UK; with the establishment of the Oriental Life
Insurance Corporation in 1818.The Indian life insurance company act 1912 was the first
statutory body that started to regulate the life insurance business in India. By 1956 about
154 Indian, 16 foreign and 75 provident firms were been established in India. Then the
central government took over these companies and as a result the LIC was formed. Since
then LIC has worked towards spreading life insurance and building a wide network
across the length and the breath of the country. After the liberalization the entrance of
foreign players has added to the competition in market.the
IMPACT OF LIBERALIZATION
The introduction of private players in the industry has added to the colors in the dull
Industry . The initiatives taken by the private players are very competitive and have given
Immense competition to the on time monopoly of the market LIC. Since the advent of the
private players in the market the industry has seen new and innovative steps taken by the
players in this sector. The new players have improved the service quality of the
Insurance. As a result LIC down the years have seen the declining phase in its career. The
market share was distributed among the private players. Though LIC still holds the 75%
of the insurance sector but the upcoming natures of these private players are enough to
give more competition to LIC in the near future. LIC market share has decreased from
95% (2002-03) to 81 %( 2004-05).The following companies has the rest of the market
share of the insurance industry
Objectives and Advantages of Life Insurance
1. Protection against risk of untimely death
Life Insurance is a product, which offers protection against risk of death. In case of
death, the full sum assured is made available under a life assurance policy, whereas
under other savings schemes, the total accumulated savings alone will be available.
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2. Protection during old age
Life Insurance can also be used as a means of saving for one’s future. There are a
number of Life Insurance policies, which in addition to life cover also provide the
means of investing one’s income. The sum as per the policy will be received only
after a period of time. This amount thus provides for old age.
3. Forced Savings
Life insurance brings about forced savings. Payment of life insurance premiums is
compulsory and becomes a habit. Savings in other schemes can be easily withdrawn
and may be used for less worthy purposes. Termination of a life insurance policy by
the policyholder usually results in a substantial loss in benefits under the policy to the
policyholder. One is thus encouraged to save and keep one’s policy alive.
4. Educational requirements and charity
In certain cases, the object of insurance may be to serve as security to educational
funds in respect of loans advanced for educational purposes or to provide donations to
charitable institutions like hospitals & schools.
5. Nomination and Assignment
The Life insured can name the person or persons to whom the policy moneys would
be payable in the event of his death. The proceeds of a Life Insurance policy can be
protected against the claims of the creditors of the Life Insured by effecting a valid
assignment of the policy. The beneficiaries are fully protected from creditors except
to the extent of any interest in the policy retained by the insured.
6. Marketability and suitability for borrowing
After a period of 3 years, if the policyholder finds that he is unable to continue
payment of premiums he can surrender a policy for a cash sum. A life insurance
policy is acceptable as a security for a commercial loan.
7. Loans from the Insurance Company
A policyholder can take a loan from his insurance company against the security of his
life insurance policy provided the terms of his policy allow for such a loan. This loan
can be taken usually after a period of 3 years from commencement of the policy and
is a percentage of it’s surrender value.
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8. Investment options
The unit linked products give comprehensive insurance solutions that cater to an
individual’s dual needs of earning potentially high returns as well as stay insured for
life. Thus there is an option to invest money in products that combine the best of
insurance and investment. In a volatile market conditions it is possible to secure both
as one can hedge the investments with safer investment vehicles that provide a
diversified portfolio.
8. Tax benefits
• The Indian Income Tax Act provides tax concessions to the policyholder both
on payment of premium and on the maturity amount.
• Under Section 88 , the Tax benefits on premium paid by an individual for life
insurance policies on his own life\on the life of spouse\children-minor or
major, including married daughters, can be summed as under:-
Income Tax
Section
Gross Annual Salary Tax Savings
< Rs 1.5 lakh Rs. 12,000 on investments
of Rs. 60,000
Rs 1.5 lakh- Rs. 5
lakh
Rs.10,500 on investments
of Rs. 70,000
Section 88
> Rs. 5 lakh Nil
Section 80CCC
(Pension Plans)
Across all income
slabs
Upto Rs. 3,000 saved on
investment of Rs. 10,000
Section 80D
(Critical Illness
Riders)
Across all income
slabs
Upto Rs. 3,000 saved on
Investment of Rs. 10,000.
• Under Section 10(10D), any sum received under a Life Insurance Policy
(excluding sums received under a Keyman Insurance Policy) including bonus
on such policy is fully exempt from tax(provided the premium payable does
not exceed 20% of the actual capital sum assured)
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• However the above tax calculations are subject to changes as per the Finance
Act governed from time to time. The customer has to be advised that he
should consult his tax advisor on taxation issues.
9. Protection to wife and children
Under Section 6 of the Married Women’s Property Act if a married man takes a
policy of life insurance on his own life and expresses on the face of it to be for the
benefit of his wife, or of his wife and children, or any of them, then it shall be
deemed to be a trust for the benefit of his wife, or his wife and children, or any of
them, according to the interest so expressed, and shall not, so long as any object
of trust remains, be subject to the control of the husband; or to his creditors, or
form part of his estate. An insurance policy taken by a married man in the
above manner is ideal way to protect the interest of his wife and children,
even after his untimely death .
Tax Benefits of Life Insurance
The following tax benefits applicable to policyholders
Under Income Tax Act,1961
An individual or HUF can claim rebate on the insurance premium paid for self, spouse
and children (including dependent children), under section 88 of Income Tax Act.
The premiums paid towards Retirement Plan upto Rs.10,000, will qualify for deduction
from taxable income under sec. 80CCC of the Income Tax Act
Money received under a Life Insurance Policy
As per section 10(10D) of the Income Tax Act,1961, any sum received under a life
insurance policy including bonus declared or paid do not form part of taxable Income. To
put it simply, it is exempt from tax. However, monies received under keyman insurance
policy are not covered under section 10(10D).
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Under Wealth Tax Act
Insurance premium paid as well as surrender value of Insurance policy do not form part
of chargeable wealth. For the same no wealth tax is attracted when the policy is in force.
On maturity of policy the amount received , if it remains in cash on March 31 of the
succeeding year, will form part of chargeable wealth.
Under Gift Tax Act
Gift Tax Act has been abolished and is no longer applicable. Accordingly, gifts are not
normally taxable. However, there are clubbing provisions in Income Tax Act(Sec 64),
which make gifts taxable in certain circumstances.
THE VARIOUS LIFE INSURERS ENTERED INDIA IN THE FOLLOWING
YEARS
Sl.No. Date of Reg. NAME OF THE COMPANY
1 23.10.2000 HDFC Standard Life Insurance Co. Ltd.
2 15.11.2000 Max New York Life Insurance Co. Ltd
3 24.11.2000 ICICI Prudential Life Insurance Co.Ltd
4 10.01.2001 OM Kotak Mahindra Life Insurance
5 31.01.2001 Birla Sun Life Insurance Co. Ltd
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6 12.02.2001 Tata AIG Life Insurance Co. Ltd
7 30.03.2001 SBI Life Insurance Co.Ltd
8 02.08.2001 ING Vysya Life Insurance Co. Ltd
9 03.08.2001 Allianz Bajaj Life Insurance Co. Ltd
10 06.08.2001 MetLife India Insurance Co. Ltd
11 03.01/2002 AMP SANMAR Assurance Co. Ltd
12 14.05.2002 Aviva Life Insurance Co. Ltd
13 06.02.2004 Sahara India Insurance Co. Ltd
MARKET SHARE (%) OF THE PRIVATE INSURANCE PLAYERS IN THE
INDIA.
S.NO Company Premium Premium
market
share%
Growth rate
Up to FEB
2005
Up to FEB
2005
Up to FEB 2005
1 Bajaj Allianz 49405.12 2.86 333.50
2 ING Vysya 9684.14 .56 114.39
3 AMP Sanmar 8247.45 0.48 292.72
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4 SBI Life 39603.33 2.29 240.90
5 Tata AIG 25283.08 1.46 76.96
6 HDFC Standard 33533.73 1.94 123.53
7 ICICI Prudential 115465.48 6.69 100.06
8 Birla Sunlife 48454.48 2.81 95.76
9 Aviva 14980.78 0.87 152.40
10 Kotak Mahindra 14398.02 0.83 106.85
11 Max New York 18260.76 1.06 73.61
12 Met Life 4555.62 0.26 149.18
13 Sahara Life 35.23 0.00 0.00
Private 381907.65 22.12 129.20
GRAND TOTAL 813014.01 2534287.67 7527698 26260468 100.00 100.00
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MARKET SHARE OF LIC AND PVT INSURERS BASED ON POLICY
COLLECTED IN THE YEAR 2004-2005
0
MARKET SHARE BASED ON POLICY COLLECTED
LIC , 91.50%
PVT INSURERS, 8.50%
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bajaj allianz13%
AMP sanmar2%
icici pru27%
Sahara0%HDFC
9% kotak
3%
Birla Sunlife9%
Max New York10%
Metlife2%
SBI life6%
ING vysya5%
Aviva 4%
Tata aig10%
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bajaj allianz15%
AMP sanmar2%
icici pru29%
Sahara0%
HDFC9%
kotak7%
Birla Sunlife11%
Max New York4%
Metlife1%
SBI life9%
ING vysya5%
Aviva 3%
Tata aig5%
The Role and Functions of IRDA in the Insurance Industry
The Insurance regulation In India, Insurance regulation in India started with the
passage of the Life Insurance Companies act 1912, and provided Fund Act, 1912. The
first comprehensive legislation was introduced with the Insurance Act. 1938, which strict
state control over insurance business in the country under the supervision of the
controller of insurance. The important functions of the IRDA as per the IRDA act 1999
include the following. Licensing and regulating the insurance sector any acting as an
independent and regulatory body. Specifying requisite qualifications, code of conduct and
practical training for insurance intermediaries and agents. Protecting the interest of the
policyholders in matters concerning assigning of policy, settlement of claims etc.
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Regulating investments of funds by insurance companies. Calling for information
from undertaking, conducting enquiries and investigation including audit of insurers and
other organization connected with the insurance business. Regulating maintenance of
margins of solvency of the insurer. Adjudication of disputes between insurers and
intermediaries.
Supervising the functioning of the tariff Advisory Committee. Promoting efficiency in
the conduct of insurance sector.
Insurance, apart from acting as an important financial instrument for risk cover, it
is also a major instrument for mobilization of long terms savings. The savings part of
insurance has channeled efficiently into long-term investments and would play a greater
role in funding the infrastructure projects with long gestation periods . in the liberalized
scenario , IRDA will have to play a crucial role towards meeting the Long – term
solvency of insurance companies, should also promote competition among them..
(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;
(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);
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(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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COMPANY PROFILE
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Since you will be paying premiums for years to come, you don't want your insurance
company to disappear before you or your family receives the benefit. It is worth asking
how long the company has been in business, how many life insurance policies they
manage and their credit rating. In most cases, you will get a better deal from the smaller
life insurance companies, but you just need to be more careful to research them and make
sure they are stable. Bajaj Allianz is sure to one such life insurance company
Bajaj Allianz life insurance Company limited is a joint venture between two companies.
Bajaj Auto and Allianz AG.
Allianz Group's Indian life insurance joint venture has changed its name to Bajaj
Allianz Life insurance from Allianz Bajaj life insurance (Bombay), Aug 4, 2004
Allianz AG
��Worlds largest insurance company by revenue –Rs520353cr (euro96.9billion)
��World wide 2nd by gross written premiums-Rs477930cr (euro 89 billion)
��3rd largest assets under management (AUM) and largest amongst insurance
companies
��11th largest corporation in the world
��50% of globe business from life insurance, close to 60 million lives insured
globally
��Established in 1890, 110 years of insurance expertise
��More then 70 countries,173750 employees worldwide
��Insurance to almost half of the fortune 500 companies
Bajaj auto
��One of the largest 2 and 3 wheeler manufacturers in the world
��21 million + vehicles on the road across the globe
��Managing fund of over Rs5200cr
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��Bajaj auto finance one of the largest companies in India
��Rs5934cr turnover and profits after tax of 732cr in 2004-05
Bajaj allianz life insurance
��The fastest growing private life insurance company in India, with a growth rate of
380%
��Have sold over 650000 policies to satisfied customers
��Is back by a network of 400 offices spanning the country
��Ranked second among private life insurance companies in India
�� Assets under management Rs936 cr
��Shareholder capital base of Rs267cr
��Product tailored to suit your needs
��Decentralized organization structure for faster response
��Wide reach to serve you better-a national wide network of 400 branches
��Specialized departments for banc assurance, corporate agency and group business
��Well networked customer care centers (CCCs) with state of art IT systems
��Highest standard of customer service and simplified claims process in the industry
��Website to provide all assistance and information on products and services, online
buying and online renewals.
��Toll-free number to answer all your queries, accessible from anywhere in the
country and a strong tele-marketing and direct marking team
��Swift and easy claim settlement process
��Accelerated growth
Vision
• To be the first choice insurer for customers.
• To be the preferred employer for staff in the insurance industry.
• To be the number one insurer for creating shareholder value
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Mission
As a responsible, customer focused market leader, we will strive to understand the
insurance needs of the consumers and translate it into affordable products that deliver
value for money.
The Bajaj Allianz Difference
• Business strategy aligned to clients' needs and trends in Indian and global economy /
industry
• Internationally experienced core team, majority with local background
• Fast, decentralised decision making
• Long-term commitment to market and clients
Underwriting
Our underwriting philosophy focuses on:
• Understanding the customer's needs
• Underwriting what we understand
• Meeting the customer's requirements
• Ensuring optimal coverage at lowest cost
claimsPhilosophy
The Bajaj Allianz team follows a service that aims at taking the anxiety out of claims
processing. We pride ourselves on a friendly and open approach. We are focused towards
providing you a hassle free and speedy claims processing.
Our claims philosophy is to:
•Be flexible and settle fast
•Ensure no claim file to be seen by more than 3 people
• Check processes regularly against the global Allianz OPEX (Operational
Excellence)methodology
Sold over 1 million since inception.
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Customer Orientation:
At Bajaj Allianz, our guiding principles are customer service and client satisfaction. All
our efforts are directed towards understanding the culture, social environment and
individual insurance requirements - so that we can cater to all your varied needs.
Experience And Expert Servicing Team
We are driven by a team of experienced people who understand Indian risks and are
supported by the necessary international expertise required to analyse and assess them.
Superior Technology
• In order to ensure speedy and accurate processing of your needs, we have
established world class technology, with renowned insurance software, which
networks all our offices and intermediaries
• Using the Web, policies can be issued from any office across the country for retail
products
• Unique, user friendly software developed to make the process of issue of policies
and
claims settlement simpler (e.g. online insurance of marine policy certificate)
Unique Forms of Risk Cover
• Special PA cover for Amarnath Yatris
• Housing loan cover for people, who are suddenly unemployed
• Film insurance
• Event management cover
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• Sports & Entertainment Insurance Package
Risk Management – Our Expertise
Our service methodology is tried, tested and Proven the world over and involves:
• Risk identification: Inspections
• Risk analysis: Portfolio review and gap analysis
• Risk retention
• Risk Transfer: To an insurer as well as reinsurer (as required)
• Creation of need based products
• Ongoing dialogue and proactivity
COMPANY PRODUCTS
“Insurance is a contract between two parties whereby one party called
insurer undertakes the risk in exchange for a fixed amount of money on the
happening of a certain event.”
1. CASH GAIN
People needs for insurance protection will vary at different stages of life.
Sometimes, they may need to release a part of their savings from insurance commitments
and utilize it for other pressing needs. The Bajaj Allianz Cashgain is ideal for those who
want to reap and enjoy the benefits of their life insurance policy at regular intervals
during their lifetime.
Bajaj Allianz Cashgain is a specially designed plan that offers a host of additional
benefits you may choose to develop a sound financial portfolio for your family. Among
the many unique benefits, the most significant is the Family Income Benefit (FIB) that
sustains the family by compensating the loss of regular income due to death or permanent
disability.
Available as:
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• Bajaj Allianz Cashgain Economy: The basic package
• Bajaj Allianz Cashgain Gold: With double protection
• Bajaj Allianz Cashgain Diamond: With triple protection
• Bajaj Allianz Cashgain Platinum: With quadruple protection
A Uniform Life Cover
Besides giving you regular Cash Benefits, this plan takes care of your life
insurance needs also. On death during the term of policy, the following would be paid
irrespective of the Cash Benefits already paid:
• Bajaj Allianz Cashgain Economy: Sum Assured + Bonuses
• Bajaj Allianz Cashgain Gold: Double Sum Assured + Bonuses
• Bajaj Allianz Cashgain Diamond: Triple Sum Assured + Bonuses
• Bajaj Allianz Cashgain Platinum: Quadruple Sum Assured + Bonuses
Choice of Terms
Keeping your convenience in mind, we offer you the widest range of terms: 15,
20, 25 and 30 years.
Additional Protection for you and your family
You have the option to add the following additional benefits, providing total
protection against uncertainties.
Family Income Benefit (FIB) - The Ultimate Protection - For Your Loved Ones
You can select the unique Family Income Benefit from Bajaj Allianz that ensures
total financial protection for your loved ones. In case of death or accidental total
permanent disability, a guaranteed monthly income of 1% of the sum assured (12% per
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annum) is paid till the end of the policy term or at least for a period of 10 years,
whichever is higher. Moreover, all future premiums are waived.
Comprehensive Accident Protection
This benefit provides comprehensive cover in case of an accident. It comprises of:
Accidental Death Benefit
Accidents are always sudden and sometimes fatal. You can't lessen the emotional
shock, but you can certainly soften the financial one. Bajaj Allianz Accidental Death
Benefit gives the loved ones something to start with after the permanent loss of income
by paying an amount equal to the Sum Assured..
Accidental Permanent Total/Partial Disability Benefit
Accidents are unpredictable, and so are the consequences. They may lead to a
disability - partial or total. This Benefit provides a financial cushion against such
misfortunes. You will get 50% of the Sum Assured in case of partial disability and 100%
in case of total disability. (Subject to a maximum of Rs. 25,00,000/- for partial and Rs.
50,00,000/- for total disability under all policies with Bajaj Allianz taken together).
Waiver of Premium Benefit
An accident may lead to permanent total disability, limiting one’s ability to earn.
Bajaj Allianz Waiver of Premium benefit is a helping hand when one needs it most. It
waives off all future premiums while keeping the valuable life insurance cover alive, thus
enabling you to live up to your commitments.
Critical Illness Benefit (CI)
Some illnesses are critical. They not only alter one’s life's pattern but also result
in a financial drain. Bajaj Allianz Critical Illness Benefit softens the impact on the family
by paying out the Critical Illness Benefit under the plan immediately, while other policy
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benefits continue (excluding Hospital Cash Benefit). We cover 11 critical illnesses. You
have the flexibility of choosing Critical Illness cover up to the basic Sum Assured
selected by you (Minimum Rs.50, 000).
Hospital Cash Benefit (HC)
The worry of settling hospital bills (room charges) adds to the trauma of
hospitalization. Bajaj Allianz Hospital Cash Benefit reduces this financial burden and
helps recovery with peace of mind.
Flexibility in Coverage
At Bajaj Allianz, we believe in offering benefits and not just products. We realize
that you are unique and your needs for insurance vary with time. We therefore offer you
the flexibility of inclusion of coverage or exclusion of coverage at each policy
anniversary, subject to conditions relating to such inclusions and exclusion.
You have the flexibility to change your package and move to a package that
provides lower protection at each policy anniversary (premiums would be adjusted
accordingly). “Comprehensive Accident Protection” can be included and excluded at
each policy anniversary. Family Income Benefit, Critical Illness Benefit and Hospital
Cash Benefit can be taken at inception only. FIB, CI & HC can be reduced or excluded
subsequently at any policy anniversary. Once reduced or excluded, they cannot be
increased or included subsequently.
Increase in risk coverage
Every added responsibility in your life calls for increase in your risk cover. We
provide you the option to increase coverage upto 50% of the basic Sum Assured on each
of the following happy moments in life.
• Marriage
• The birth of first child
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• The birth of second child
This additional coverage is not subject to underwriting. The option should be
exercised within 90 days of the occurrence of the said event.
2. SAVE CARE ECONOMY
As the breadwinner of the family you shoulder several responsibilities. Your
spouse's welfare, your children's education, buying a house or a car - you have a lot to
think about, everyday. Bajaj Allianz, believe that the security and growth of your hard
earned money should not add to these.
Which is why Bajaj Allianz has created the “Bajaj Allianz Save Care Economy -
Single Premium”-the 10-year Single Premium version of our popular product “Save Care
Economy”? It is an ideal plan for a one-time lump sum investment that provides for
savings with high risk-cover.
The "Bajaj Allianz Save Care Economy - SP", is a Single Premium investment
plan for 10 years that also participates in the profits of the company. The highlights of
this plan are:
Minimum Guaranteed Return up to 3.54% (depending on age at entry).
The Minimum Guaranteed Amount (Sum Assured) would grow further by way of
compounded annual bonuses.
A high risk-cover of up to 142% (depending on age at entry) of the sum invested
from the beginning of the policy term as a financial safety net to provide for
unpredictable adversities.
Eligible for Tax Benefits under Section 88 and Section 10 (10 D) of the Income
Tax Act.
At Maturity you will receive the Sum Assured (Minimum Guaranteed Amount)
along with the accrued bonuses.
MPBIM 28
Death Benefit: In case of death during the term of the plan, the nominee will be
paid the Sum Assured (Minimum Guaranteed Amount) plus accrued bonuses. In case of
death of a minor (below age 7), the death benefit will be the surrender value or Single
Premium whichever is higher.
3. INVESTGAIN
It takes only a moment to make promises and a lifetime to keep them. Keeping
promises made to your loved ones is not just a responsibility, but a commitment that you
have to live up to. When you promise to see your family through thick and thin you need
to make sure that you have planned for all the eventualities that may befall on them. You
need to be prepared that even if there ever is an instance that you are not there with them
you have saved enough to see them through their entire life. We understand this need,
which is why we have developed Bajaj Allianz’s InvestGain, the plan that helps you in
saying "My family, May you always be happy!”
Available as:
• Bajaj Allianz Investgain Economy: The basic package
• Bajaj Allianz Investgain Gold: With double protection
• Bajaj Allianz Investgain Diamond: With triple protection
• Bajaj Allianz Investgain Platinum: With quadruple protection All these
packages participate in the profits of the company by way of bonuses, and therefore,
grow with time
Family income benefit
You can select the unique Family Income Benefit from Bajaj Allianz that ensures
total financial protection for your loved ones. In case of death or accidental total
permanent disability, a guaranteed monthly income of 1% of the sum assured (12% per
annum) is paid till the end of the policy term or at least for a period of 10 years,
whichever is higher. Moreover, all future premiums are waived.
MPBIM 29
Popular Products: Endowment Assurance (Participating) and Money Back
(Participating). More than 80% of the life insurance business is from these products.
4. UNIT LINKED INSURANCE POLICY
The thumb rule for buying insurance is that your insurance needs are minimal in
your early earning years, increase with added responsibilities (Marriage, children, loans
etc.) and taper off by the time you retire. It is difficult to find a single insurance plan that
can take care of all your changing requirements in life – additional protection, more
money to invest, sudden requirement of cash or a steady post-retirement income.
With Bajaj Allianz UnitGain, you can invest in one life insurance plan that can
take care of all your changing requirements throughout your life. This plan has been
designed to provide you with maximum flexibility, so that you do not have to worry
about your changing needs.
Bajaj Allianz UnitGain offers the unique option of combining the protection of
life insurance with the attractive prospects of investing in securities. You can choose the
investment funds you want to invest your money, providing you with an opportunity to
have a direct stake in the performance of the financial markets. You also benefit from
attractive tax advantages and can protect your loved ones against unfortunate events.
• Unit Gain Plus : A Unit Linked Plan
Bajaj Allianz Unit Gain Plus offers the unique option of combining the
protection of life insurance with the attractive prospects of investing in
securities. Customers have the choice of 6 investment funds with flexible
investment management; they can change funds at any time. Customers also
benefit from attractive tax advantages and unmatched flexibility -to match
their changing needs. And the advantage of low fund management & fund
administration costs.
MPBIM 30
• Unit Gain Plus SP : A Single Premium Unit Linked Plan
This plan enables the customers to protect their loved ones, while making
their money grow faster with the advantage of low fund management & fund
administration costs. It provides the customers the option of allocating 98% of
the single premium to purchase units in any/all of the 6 funds available with
company
• Unit Gain : A Unit Linked Plan
This amazingly flexible unit linked life insurance plan provides the
customers the opportunity to participate in market linked returns while
enjoying the valuable benefits of life insurance
• Unit Gain SP : A Single Premium Unit Linked Plan
This plan enables the customers to protect their loved ones, while making
their money grow faster. It provides them the option of allocating 100% of the
Single Premium to purchase units in any/all of the 6 funds available with
company.
• Lifelong Gain Plan : Unit Linked Whole Life Plan
This is the perfect plan to take care of ongoing and future family expenses like
debts, expenses on children, living expenses, etc. It can also take care of unforeseen
expenses like accidents, illnesses, hospitalization, etc. and provides customers family
with a safety net. It provides whole life protection with only 10 or 15 years of
contributions. Guaranteed Survival Benefits @3% are available under this policy.
Guaranteed Survival Benefits that pays 3% of the Sum Assured every year after the
premium payments are over
SUITABILITY
MPBIM 31
This policy is a long-term market linked total protection plan. The plans offer
protections for life at the same time allows the policyholder to get market linked
returns. It is a single product combining the benefits of both an investment product and
insurance plan. This apart, the product offers a lot of flexibility.
DIFFERENT FUNDS
EQUITY INDEX
The investment objective of this fund is to provide capital appreciation
through investment in equities. The plan is expected to match the returns given
by NIFTY Index of the National Stock Exchange. This fund will invest at least
85% in equities and maximum 15% in debt and cash.
EQUITY PLUS FUND
The investment objective of this fund is to provide capital appreciation
through investment in selected equity stocks that have the potential for high
capital appreciation. The fund will invest at least 85% in equities and maximum
15% in debt and cash
DEBT PLUS FUND
The objective of this fund is to provide accumulation of income through
investment in high quality fixed income securities like G-securities and corporate
debt rates AA and above. This fund is invested fully in debt instrument and
money market instrument.
BALANCE PLUS FUND
This fund is a fund of funds. The objective of this fund is to provide a
balanced investment between long-term capital appreciation and current income
through investment in the units of our equity and debt funds. The balanced fund
will invest 30% to 50% in the equity index fund and 50% to 70% debt fund.
MPBIM 32
CASH PLUS FUND
The investment objective of this plan is to have a fund that guarantees
invested capital through investments in liquid money market and short term
instruments like commercial papers, certificate of deposits, money market mutual
funds, bank F.D’s etc. The price of unit in this fund is gu aranteed not to go down.
100% of this fund will be invested in money market instruments. The price of the
units in this fund is guaranteed never to go down.
FOCUSED SALES NETWORK
Bajaj Allianz Life Insurance Company
Banc assurance Group and Alternate Channel
Agency Channel
Branches
Satellite Satellite
Standard Chartered Bank
Syndicate Bank
Centurion Bank
Cosmos Bank
Jankalyan Sahakari Bank
Jijamata Sahakari Co-op Bank
Satellite
Group Employee Benefit
Corporate Agency
Franchisee
Brokers
MPBIM 33
The overall premium target is broken down as follows by distribution channel:
FP + SP ANNUAL(crores)
AGENCY 1,827
BANCASSURANCE 650
ALTERNATE CHANNELS 523
RENEWALS 500
TOTAL 3500
AGENCY CHANNEL:
ÖÖ��Currently the company has some 300 offices made up of 68 branches and
about 239 satellite offices.
ÖÖ��The company will continue with the same hub and spoke structure, but will
increase the number of branches to 100 and satellites to 300.
ÖÖ��The number of STMs a branch or a satellite can have will be between 2 and
8.
ÖÖ��Underwriting and processing of business will continue at the branch level.
ÖÖ��The branches will continue to support the bancassurance and alternate
channels for underwriting and processing of business, as well as offer the
office infrastructure for the other channels staff to operate from.
BANCASSURANCE:
The company has some 6 bank tie ups these will be managed by the bancassurance
team.following are the banks with which the company has tied up:
1. Syndicate bank.
2. Centurion bank.
3. Standard chartered bank.
4. indusland ind bank.
MPBIM 34
ALTERANATE CHANNELS:
The focus will be corporate agency, franchise, brokers, worksite marketing, NRI
business, HNI business, group business and rural
social business
ORGANISATION STRUCTURE OF SALES AGENCY
MPBIM 35
BANK-ASSURANCE/ALTERNATE CHANNEL
CEO
CFO
HOD SALES
ZONAL MANAGER
REGIONAL MANAGER
SENIOR BRANCH MANAGER
BRANCH MANAGER
ASSISTANT BRANCH MANAGER
SALES MANAGER
CONSULTANTS. / AGENTS
MPBIM 36
CEO
CFO
HOD SALES
AREA MANAGER
DEPUTY MANAGER
FINANCIAL SERVICE\PLANNING CONSULTANTS
MPBIM 37
FINANCIAL HIGHLIGHTS YEAR 2004-2005
Particulars 2004-05
Rs. Million
2003-04
Rs.
Million
2002-03
Rs. Million
2001-02
(11 Months)*
Rs. Million
Gross Written Premium 8,560.7 4,798 2,998 1,420
Net Written Premium 4,792.9 2,864 1,808 841
Net Earned Premium 3,709.2 2,306 1,541 98
Net Incurred Claims (2,263.3) (1,542) (1,072) (127)
Net Commissions 419.4 231 155 128
Management Expenses (1,455.9) (984) (689) (370)
Underwriting Results 409.4 11 (33) (271)
Income from Investments 388.8 285 207 143
Others 28.6 22 (3) (5)
Profit Before Tax 769.6 318 171 (133)
Provision for Tax (298.7) (101) (75) 37
Profit After Tax 470.9 217 96 (96)
Claim's Ratio 61% 67% 70% 130%
Commission Ratio -11% -10% -10% -130%
Management Expenses Ratio 40% 42% 43% 376%
Combined Ratio 90% 99% 102% 376%
Return on Equity 34% 20% 9% -9%
Shareholder's Equity 1,824.1 1,380 1,095 997
Assets Under Management 5835.5 3,486 2,709 1,688
Number of Employees 924 480 306 141
MPBIM 38
GROWTH OF BAJAJ ALLIANZ LIFE INSURANCE CO
Fiscal year No of policies sold in FY GWP in FY
2001-2002 (6months) 21376 Rs 7cr
2002-2003 115965 Rs69cr
2003-2004 186443 Rs221cr
2004-2005 288189 Rs1002cr
0
50000
100000
150000
200000
250000
300000
2001-2002(6months)
2003-2004
policies sold in Rs
MPBIM 39
0
200
400
600
800
1000
1200
2001-2002(6months)
2002-2003 2003-2004 2004-2005
GWP in cr
¾�Assets under management Rs936 cr
¾�Shareholder capital base of Rs267cr
¾�Product tailored to suit your needs
¾�Decentralized organization structure for faster response
¾�Wide reach to serve you better-a national wide network of 400 branches
¾�Specialized departments for banc assurance, corporate agency and group business
¾�Well networked customer care centers (CCCs) with state of art IT systems
¾�Highest standard of customer service and simplified claims process in the industry
¾�Website to provide all assistance and information on products and services, online
buying and online renewals.
¾�Toll-free number to answer all your queries, accessible from anywhere in the
country and a strong tele-marketing and direct marking team
¾�Swift and easy claim settlement process
LIFE TRACK OF BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD
Objectives Of The Company For The Year 2004-05:
• to be one of the top 3 private life insurers in terms of gross premium and achieve
a premium target of more than Rs 750 crs.
MPBIM 40
• To be one of the top 2 companies in terms of profitability.
• To be more customer focused and reduce complexity.
The Company’s Major Achievements In The Last Financial Year Are:
• Number 2 amongst the private insurers in terms of new business premium, up to
February 2005.
• Gross premium achieved over Rs 1000crs GWP
• 300 + offices, 2700 + STM’s and 45000 + ICs
• 190 MDRTs , 9COTs
• 6 bancassurance tieups
• intermediaries including franchisees and corporate agents over 400.
• A full basket of products approved.
The Company’s Objectives For The Year 2005-06
• To be one of the top 2 private life insurers in terms of premium and profitability
• Achieve a minimum premium target of Rs 3500 crs(with less than 30% single
premium)each office to look at growing the business from 2004-05levels by
350% to 400%
• Improve customer service at all levels.
• Conduct business in an ethical manner.
THE KEY INITIATIVES THE COMPANY PLANS TO TAKE IN THIS QUARTER
INCLUDE THE FOLLOWING:
¬¬��Increase branch numbers to 100 and satellite offices to 300.
¬¬��Increase STM strength to3500 and IC strength to 50000
¬¬��Products for filing and approval women’s plan, health, tactful and revised ULIP
¬¬��Metro city strategy- increase number of branches in metro cities.
¬¬��Target 5 banks/coop banks for tie ups.
MPBIM 41
¬¬��Increase franchisee and corporate agents tie up.
¬¬��Group and broker team to be strengthened.
¬¬��Tactful team to be setup.
¬¬��NRI and HNI teams to be set up to focus on these areas.
¬¬��Online system to incorporate renewals, switches and withdrawals.
¬¬��Finalization of accounts for 2004-2005
¬¬��Recruitment of training head and trainers for branches
MPBIM 42
THE VARIOUS RESPONSIBILITIES AND THE WORK CARRIED OUT IN THE
BANGALORE BRANCH OFFICE
1. Bangalore is the area office.
2. There are different channels namely bancassurance, retail banking, agents and
agency managers headed by respective managers.
3. Primary responsibility of all the channels is to meet the targets set by the head
office.
4. Policy logins are done here.
5. Underwriting and medical checkups are done here.
6. After the preliminary verification policies are sent to head office for issuance.
7. Training is also held for the newly appointed employees.
8. Certificate for selling insurance is given once employees clear the IRDA exam.
MPBIM 43
MICROSCOPIC STUDY
MPBIM 44
PROJECT TITLE:
“A COMPARATIVE STUDY OF INSURANCE PRODUCTS OF BAJAJ
ALLIANZ LIFE INSURANCE COMPANY WITH COMPITITORS”
PRODUCTS FOR COMPARISON
• UNIT LINKED PLAN
• CHILDREN PLAN
• ENDOWMENT PLAN
COMPANIES FOR THE COMPARISON:
MPBIM 45
• BAJAJ ALLIANZ LIFE INSURANCE COMPANY
• ICICI PRUDENTIAL
• LIFE INSURANCE CORPORATION (LIC)
UNIT LINKED PLANS:
Most insurers in the year 2004 have started offering at least a few unit-linked plans. Unit-
linked life insurance products are those where the benefits are expressed in terms of
number of units and unit price. They can be viewed as a combination of insurance and
mutual funds.
The number of units that a customer would get would depend on the unit price when he
pays his premium. The daily unit price is based on the market value of the underlying
assets (equities, bonds, government securities, et cetera) and computed from the net asset
value.
The advantage of unit-linked plans is that they are simple, clear, and easy to understand.
Being transparent the policyholder gets the entire upside on the performance of his fund.
Besides all the advantages they offer to the customers, unit-linked plans also lead to an
efficient utilization of capital.
Unit-linked products are exempted from tax and they provide life insurance. Investors
welcome these products as they provide capital appreciation even as the yields on
government securities have fallen below 6 per cent, which has made the insurers slash
payouts.
According to the IRDA, a company offering unit-linked plans must give the investor an
option to choose among debt, balanced and equity funds. If you opt for a unit-linked
endowment policy, you can choose to invest your premiums in debt, balanced or equity
plans.
If you choose a debt plan, the majority of your premiums will get invested in debt
securities like gilts and bonds. If you choose equity, then a major portion of your
MPBIM 46
premiums will be invested in the equity market. The plan you choose would depend on
your risk profile and your investment need.
The ideal time to buy a unit-linked plan is when one can expect long-term growth ahead.
This is especially so if one also believes that current market values (stock valuations) are
relatively low.
So if you are opting for a plan that invests primarily in equity, the buzzing market could
lead to windfall returns. However, should the buzz die down, investors could be left
stung.
If one invests in a unit-linked pension plan early on, say when one is 25, one can afford to
take the risk associated with equities, at least in the plan's initial stages. However, as one
approaches retirement the quantum of returns should be subordinated to capital
preservation. At this stage, investing in a plan that has an equity tilt may not be a good
idea.
Considering that unit-linked plans are relatively new launches, their short history does
not permit an assessment of how they will perform in different phases of the stock
market. Even if one views insurance as a long-term commitment, investments based on
performance over such a short time span may not be appropriate.
Particulars/
Name Of The
Company
ICICI Prudential Bajaj Allianz Life
Insurance Co,Ltd
LIC
Name of the
policy
LIFE TIME 11 UNIT GAIN
PLUS
BIMA PLUS
Min age of
entry
0 0 12
Max age of
entry
60 60 55
Min premium
yearly
18,000 15,000
MPBIM 47
yearly
Term Choice rests with the
customer with a min
premium payment for 10
yrs
Choice rests with
the customer with
a min premium
payment for 3 yrs
10yrs
Sum assured Min SA is Rs 1,00,000.
Max SA is Rs 50,00,000.
Min SA is 5 times
of the premium.
Max SA is as per
the age ie 125
times of the
premium . SA can
be increased or
decreased.
Maximum up to
2lakhs
Maturity
benefit
Any time after 4th yrs
contribution 100% of the
surrender value is
avaliable
Anytime after
payment of 3 full
yrs premiums,
can withdraw
100% of the fund
value or the SA
whichever is
higher.
Fund value of
the units along
with maturity
bonus at 5% of
the SA
Death benefit Higher of SA or value of
units. The value of units
will be treated as the
death benefit if the life
assured is less than 7 yrs
of age or more than 70 yrs
of age.
Higher of SA or
value of units.
The value of units
will be treated as
death benefit if
the life assured is
less than 7 years
of age and more
than 70 yrs of age.
Death benefit
during the first
6 months-30%
of the SA +value
of units, next
6months-60% of
the SA+ value of
units .death
after 1st year –
SA +value of
units. Death
during the 10th
yr-105%of the
SA+ value of
MPBIM 48
units. Death
during the 10th
yr-105%of the
SA+ value of
units
Withdrawal
benefit
Partial withdrawal is
available from the 3rd
year onwards. 100%
surrender value is
available after 4th yrs
contribution.
Partial or
complete
withdrawal is
available after 3rd
yr contribution.
Withdrawal
allowed after 1
year.
Flexibility to
increase or
decrease the
premium
The max decrease in
premiums can be upto
20%of the initial
premium chosen at the
time of the inception of
the policy. There is no
limit for increasing the
premium. This can be
done with or without
increase in the SA
Flexibility to raise
the premium is
available with or
without increase
in the SA. The SA
can be even
decreased. The
premiums cannot
be reduced.
Not avaliable
Investment
options
Maximiser, Balancer,
protector & preserver.
Equity Index,
Equity Plus, Debt
Plus, Balanced
Plus, Cash Plus,
Mid cap
Balanced,
Secured &
Risk
Increase/
decrease of
death benefit
Available. Any increase of
SA is subjected to
underwriting
SA can be
increased without
any medical test
every 3rd year
upto 4 times. The
increase would be
25% of the
original SA or Rs
1, 00,000 which
Not available
MPBIM 49
increase would be
25% of the
original SA or Rs
1, 00,000 which
ever is lower. SA
can be decreased
at any time.
Top ups Available. Minimum top
up amount is Rs 10000 in
multiples of 500.
Available.
Minimum top up
amount is 5000
Available
Switches 4 free switches per year,
with a minimum switch
amount being Rs
10000.all other switches
will be charged Rs100 per
switch.
3 free switches
every policy year.
Subsequent
switches would be
charged @1% of
the switch or Rs
100 whichever is
higher.
No free
switches. Cost
of switching 2%
of the fund
value.
Automatic
cover
continuance
Available after the 1st 3
yrs premiums have been
paid. Can be availed upto
a max of 2 yrs at a time in
the 1st 10 yr of the policy.
After the 10 yrs of the
policy the customer can
avail the cover
continuance without any
limits.
Premium holiday
or the cover
continues after
the payment 3 full
years premium.
the cover
continues till the
age of 70
Not avaliable
Charges
Initial charges
% Of premium allocation.
% Of premium
allocation.
MPBIM 50
18,000-35,999:
1st yr-81%; 2nd to5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
36,000-99,999:
1st yr-83%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
1,00,000-4,99,999:
1st yr-85%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
5,00,000++:
1st yr-88%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
allocation.
1st year -76%,
2nd year-97%,
3rd year-99%,
4th year
onwards100%
allocation is
made.
Allocation for top
ups is 100%
Admin charges Admin charges of Rs
60/month
Annual admin
charges of Rs 20
per
month,escalating
at 5%per annum
at the end of each
financial year.
This will be 1%
of the Fund per
annum, charged
on a weekly
basis
Riders Accident and disability
rider
Critical illness.
Major surgical assistance
benefit rider.
Accidental death
benefit.
Accidental
permanent
total/partial
disability.
Critical illness.
Inbuilt
accidental
benefit.
MPBIM 51
Hospital cash
benefit
Surrender value Acquires a surrender
value after 3 complete
years of the policy
provided 1st three
premium are been paid.
The surrender value is
100% of the investments.
Acquires a
surrender value
after 3 complete
years of the policy
provided 1st three
premium are been
paid. The
surrender value is
100% of the
investments.
Additional
allocation of
units
Declared as % of unit
value. Paid at the end of
4th, 8th &12th policy year.
The allocation of units
would be only made if the
annual contribution till
that date were made in
total.
<=75,000-5,00,000:0.15 %
75,001-5,00,000:0.2%
5,00,001-10,00,000:0.25%
10,00,001-50,00,000:0.30
50,00,001&above:0.35%
Not available Not available
MPBIM 52
ANALYSIS
From the above table it is very clear that the policies of the companies are
almost similar and it shows only minor differences between them making the product
more attractive from the customer’s viewpoint.
For Bajaj Allianz and ICICI the minimum age of entry is zero but in the case
of LIC ,policy starts only at the age of 18.hence LIC have to concentrate another
product for targeting the zero to 18 age group where as Bajaj and ICICI can cover
these groups with this policy. Naturally customer base for unit gain and unit gain plus
of Bajaj and life time of ICICI will be more compared to the LIC’s Bima plus.
The minimum premium when compared, ICICI has the highest premium, bajaj
allianz with Rs 15,ooo which cannot be affored by every one.
The minimum SA provided by all the companies is 5 times. But in case of
maximum sum assured, Bajaj Allianz is leading with 125 times coverage of annual
MPBIM 53
premium. On the other side ICICI is assuring only 50 times so we can predict that
Bajaj is giving more value to a person’s life. Bajaj allianz and ICICI pru provide
facility to increase or decrease the SA with or without increase in premium,but this
facility is not available in LIC.
The customer has to pay the premium for the minimum period of 3 yrs in unit
gain plus. Hence the premium holiday can be extended till there are enough funds in
the policy to cover the risk of the policyholder. Where as in lifetime 2, the
policyholder has to pay premium for the first 3 years and can take premium holiday up
2 years then he has to continue paying the premium till the 10th year of the policy.
Hence unit gain plus is more beneficial to the customer than life time2.because the fear
of lapsation of the policy to the customer is reduced to a greater extent.
Customers can switch their money between funds according the market
situations. In this case ICICI is giving a more switches than bajaj and LIC. The
switching charges of LIC is higher than other 2 companies with no free switches.
The following table shows the fund allocations of different policies in different
years.
From the above table we can predict that for a investor of less than 5 years unit
gain plus is much better. For a long-term investment it is better to invest in Unit gain
why because after the 3 rd year it will invest 100 % premium to the funds.
All the policies are providing tax benefits to its customers. It is a main
advantage to the investors by comparing with mutual funds and other investment
year Unit gain plus Unit gain Life time
1st year 76% 30% 80%
2nd year 97% 98% 92.5%
3rd year 97% 99% 96%
4th year 97% 100% 96%
5th year onwards 97% 100% 96%
MPBIM 54
options. The tax benefits are given according to the section 10(10) D of Income Tax
Act and section 88.
�Unit-linked life insurance products are those where the benefits are expressed in terms
of number of units and unit price. They can be viewed as a combination of insurance and
mutual funds.
�7KH� DGYDQWDJH� RI� XQLW -linked plans is that they are simple, clear, and easy to
understand.
�7UDQVSDUHQF\�%HLQJ� WUDQVSDUHQW� WKH� SROLF\KROGHU� JHWV� WKH� HQWLUH� XSVLGH� RQ� WKH�performance of his fund.
�,QYHVWRUV�ZHOFRPH� WKHVH�SURGXFWV� DV� WKH\�SURYLGH�FDSLWDO�DSSUHFLDWLRQ�HYHQ�DV� WKH�yields on government securities have fallen below 6 per cent, which has made the
insurers slash payouts.
�7KH�LGHDO�WLPH�WR�EX\�D�XQLW -linked plan is when one can expect long-term growth
ahead. This is especially so if one also believes that current market values (stock
valuations) are relatively low.
�/LTXLGLW\��)OH[LELOLW\�
�The inherent strengths of ULIP make it adaptable to any and every other product
offering from the competition. The product is ‘all-in-one’ and can tackle every customer
need. The rider offerings namely Term, Critical Illness, Waiver of Premium and
Accidental Death & Dismemberment rider add to the attractiveness of the product, which
can provide various permutations and combinations.
�
MPBIM 55
CHILDREN PLANS:
Particulars\name of
the company
Bajaj Allianz Life Insurance, Co. Ltd ICICI Prudential LIC
Name of the
product
Child gain 21 or 24 Smart kid Komal jeevan
Minimum Term: 5 10 8
Maximum term 18 25 18
Minimum age of
entry(child)
0 0 0
Maximum age of
entry(child)
13 12 10
Max age of child at
maturity
21 or 24 22yrs to 25yrs 26
Minimum age of
entry(parent)
20 20yrs
MPBIM 56
entry(parent)
Maximum age of
entry(parent)
50 60yrs
Min sum assured Rs 1,00,000 Rs 1,00,000 1,00,000
Max sum assured Rs 50,00,000 Rs 30,00,000 25,00,000
Min premium
payment p.a
Rs 5,000 Rs 8,400 Policy will be issued only in
multiples of Rs.25, 000/-.
Death benefit 1. Future premium waived.
2. Family income benefit.
3. Guaranteed payouts.
4. Additional SA paid at the age of 21
or 24(as opted) of the child as “Start
Of Life Benefit” in case of Child gain
21 Plus and Child gain 24 Plus.
Sum assured +waiver of
premium+ periodic benefits
continue as it is
Sum Assured + Guaranteed
Additions + Loyalty Addition
if any
Survival benefit A guaranteed % of SA returned at
various ages and the vested bonus
along with the terminal bonus if any
will be given at the time of first cash
payout.
A guaranteed % of SA
returned at various terms and
the vested bonus if any will be
given at the time of first cash
payout.
SA + Guaranteed additions +
Loyalty Additions
Riders 1. Premium waiver benefit.
2. Family income benefit.
1. Accidental and disability
benefit.
2. Accident benefit rider.
3. Income benefit rider.
1. Premium waiver benefit.
2. Family benefit.
Additional benefits Start of life Rider(available in child
gain 21 plus & child gain 24 plus)
The policy holder can choose
between the 2 cash flow
payments or the periodic
benefits .
Cash flow intervals CHILD GAIN 21 & CHILD GAIN21
PLUS:
Policy anniversary following
completion of age
PERIODIC BENEFIT-1
T-7 : 20% OF SA
T-5 : 25% OF SA
T-2 : 25% OF SA
Age of the
child
MPBIM 57
completion of age
Policy
Term: 8-
21 years
Guarante
ed Payout
Policy Term:
8-21 years
Payout if
interest rates
are 7% at
the
beginning of
the payouts
18 20% +
Bonus*
20% +
Bonus*
19 25% 25%
20 25% 25%
21 35% 43%**
Total
payout
105% +
Bonus*
105% +
Bonus*
T : 30% OF SA+
Guaranteed additions @ 3.5%
compounded annually (for
first 4 years) + VB
PERIODIC BENEFIT-2
T-4 : 25% OF SA
T-3 : 20% OF SA
T-2 : 20% OF SA
T-1 : 20% OF SA
T : 20% OF SA+
Guaranteed additions @ 3.5%
compounded annually (for
first 4 years) + VB
child
18
20
22
24
26
CHILD GAIN 24 & CHILD GAIN 24
PLUS:
Policy anniversary following
completion of age
Policy
Term: 8-
21 years
Guarante
ed Payout
Policy
Term: 8-21
years
Payout if
interest
rates are
7% at the
beginning
of the
payouts
MPBIM 58
of the
payouts
18 20% +
Bonus*
25% +
Bonus*
20 25% 25%
22 25% 25%
24 35% 40%
Total
payout
105% +
Bonus*
115% +
Bonus*
Rebate Large sum assured discount:
Less than 2,00,000 : nil
2,00,000-4,99,999 :Re 1 per
1000
5,00,000 and above: Rs 2 per
1000
For yearly mode:2%of
premium
For half yearly mode:1%of
premium
Quarterly -No rebate
Sum Assured Rebates:
Sum Assured greater than or
equal to Rs.200000/- : Rs.1.00
per thousand Sum Assured
MPBIM 59
MPBIM 60
ANALYSIS
From the above comparison it can be found that,
1.The minimum payment term in Child gain is the least as
compared to that of Smart kid and Komal Jeevan. Because the
maximum age of entry in child gain is higher ie 13 yrs.
2. The minium SA for all the three products is the same but the
maximum SA is highest in case of child gain which inturn
benefits the customer the most.
3. The minimum premium is least in case of child gain, which
makes the policy more affordable by the customer.
4. All the products have almost same riders but the product Child
Gain plus has another benefit called “start of life” which means
the child is given another SA in case of death of the parents so
that the child can leads its life without many hurdles.
5. The total payout at maturity of the plan in case of Chid Gain and
smart kid is almost the same ie 105% but in case of Komal
Jeevan the payout at maturity is 100%
MPBIM 61
ENDOWMENT PLAN:
Particulars\name
of the company
Bajaj Allianz Life
Insurance, Co. Ltd
ICICI Prudential LIC
Name of the policy Invest gain Save N Protect Endowment
assurance plan(with
profits)
Minimum term 5 10 5
Maximum term 40 30 55
Min age at entry 0 0 12
Max age at entry 65 60 65
Max age at expiry 70 70 75
Min sum assured 50,000 50,000 20,000
Max sum assured No limit 1,00,00,000 No limit
Min premium 5,000 yearly 6,000yearly
Death benefit Sum assured +
bonuses
SA+GB+VG SA+VB
Maturity benefit Sum assured +
bonuses
SA+GB+VG SA+ VB+ final
additional bonus
Rider benefit • Family income
benefit.
• Comprehensive
accidental.
Protection.
• Accidental
death benefit.
• Accidental
permanent
total/ partial
disability
benefit.
• Accident&
disability
benefit
• Critical
illness
• Major
surgical
assistance
• Disability
benefit.
• Accident
benefit
• Waiver of
premium
benefit.
MPBIM 62
permanent
total/ partial
disability
benefit.
• Waiver of
premium
benefit.
• Critical illness
benefit.
• Hospital cash
benefit.
• Accident
rider
benefit
Rebate For every Rs 10,000
SA above Rs 50,000
For yearly:3%
Half year:1.5%
SA 25000 to 49000: 1
SA 50000 & above:2
Loan Can avail loan upto
90% of the surrender
value.
Can avail loan
upto 90% of the
surrender value.
No loans granted
Surrender After 3 full policy year After 3 full policy
year
After 3 full policy
year
Additional
features
Flexibility to change
the packages at each
policy anniversary.
Addl risk cover of
50% of SA on
marriage, birth of 1st
child & birth of 2nd
child.
Extra insurance
cover for 5 years
after maturity of
the policy for 50%
of the sum
assured.
Premium
discounts for
females equal to 2
yr younger male
on base plan.
MPBIM 63
child.
Discount for females-
equal to 2 yr younger
male on base pack
discounts for
females equal to 2
yr younger male
on base plan.
Plans Economy –the basic
package.
Gold –with triple
protection
Diamond- with triple
protection
Platinum- with
quadruple protection
MPBIM 64
REFERENCES
BOOKS
• Insurance chronicle-ICFAI publications
• Outlook money –magazine
WEBSITES
• www.google.com
• www.bajajallianz.co.in
• www.iciciprulife.com
• www.in.insuranceyahoo.com
• www.moneycontrol.com
• www.bimaonline.com
• www.irdaindia.org
• www.licindia.com
• www.outlookmoney.com
OTHERS
• Broachers of different products considered for
comparison
• Product manuals
MPBIM 65
PERFORMANCE OF DIFFERENT
INSURERS IN 2004-2005
Total No. of Total Premium u/w
Policies Issued Market Share based on
Sl. No. Insurer
March Apr.- Mar March Apr.- Mar Premium Policy
1 TATA AIG 4738.99 30022.07 31148 228894 1.18 0.87
2
KOTAK MAHINDRA OLD MUTUAL 23313.41 37475.21 14975 63468 1.48 0.24
3 BIRLA SUNLIFE 13673.42 62128.31 41710 198370 2.45 0.76
4 MAX NEW YORK 4208.25 22469.01 33608 216671 0.89 0.83
5 ING VYSYA 18478.59 28162.46 26088 111141 1.11 0.42
6 HDFC STANDARD 19771.79 48615.08 58695 206320 1.92 0.79
7 MET LIFE 1048.10 5603.71 9579 46682 0.22 0.18
8 BAJAJ ALLIANZ 36596.63 86001.80 83017 288191 3.39 1.10
9 ICICI PRUDENTIAL 42942.95 158408.46 96352 614673 6.25 2.34
10 SBI 8690.23 48293.56 43271 129974 1.91 0.49
11 AVIVA 4248.50 19229.27 13989 83209 0.76 0.32
12 AMP SANMAR 870.99 9118.44 6378 35268 0.36 0.13
MPBIM 66
13 SAHARA LIFE 131.86 167.09 7146 10214 0.01 0.04
PRIVATE TOTAL 178713.70 555694.47 465956 2233075 21.93 8.50
14 LIC 634300.31 1978593.20 7061742 24027393 78.07 91.50
MPBIM 67
S.NO
Company Premium Premium market share%
Growth rate
Up to FEB 2005
Up to FEB 2005
Up to FEB 2005
1 Bajaj Allianz 49405.12 2.86 333.50 2 ING Vysya 9684.14 .56 114.39 3 AMP Sanmar 8247.45 0.48 292.72 4 SBI Life 39603.33 2.29 240.90 5 Tata AIG 25283.08 1.46 76.96 6 HDFC Standard 33533.73 1.94 123.53 7 ICICI Prudential 115465.48 6.69 100.06 8 Birla Sunlife 48454.48 2.81 95.76 9 Aviva 14980.78 0.87 152.40 10 Kotak Mahindra 14398.02 0.83 106.85 11 Max New York 18260.76 1.06 73.61 12 Met Life 4555.62 0.26 149.18 13 Sahara Life 35.23 0.00 0.00 Private 381907.65 22.12 129.20
