Executive Summary

Insurance is one of the major risk-handling mechanisms. Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Over the years large section of people have become acquainted with the concept of life insurance. But, the amount of life insurance per individual in Bangladesh is still extremely low, which is only less than one U.S. Dollar. On the other hand, per capita insurance premium of life insurance is approximately U.S. $ 4000 in Japan. Low level of paying capacity is the main reason for insignificant growth of life insurance in Bangladesh. Religion also plays a negative role in respect of life insurance in our country. Insurance especially life insurance is considered as inconsistent with religious faith. The entry of private companies and the significant number of players, in Bangladesh, bulk of life and non-life business continues to remain in the hands of public sector units. This is true for life insurance where Jiban Bima in Bangladesh continue as market leaders by varying wide margins. This report highlighted the product and services offered by the insurance companies and evaluation their performance. We have selected five companies for performance measurement.

Origin of the ReportWe were assigning to prepare this report by our Honorable Course Instructor Md. Nur Nabi; Lecturer; Department of Finance and Banking; Faculty of Business Administration and Management; Patuakhali Science and Technology University So we have selected Bengal Biscuits Ltd. to prepare this assigned report. It is one of the report is a Pre-requisite for Cost Accounting course.

Scope of the ReportThe study was conducted in Five renowned life insurance companies of Bangladesh including Progoti Life Insurance company Limited, Prime Islamic Life Insurance Company Limited, Progressive Life Insurance Company Limited, Rupali Life Insurance Company Limited and Sandhani Life Insurance Company Limited.

Sources of dataTo prepare this report we have used Secondary data only and the data was collected from the published documents, relevant records, and internet.

IntroductionInsurance is such a product or service under which a large number of individuals agree to share the loss which a few of them would incur in future. This means insurance protects those unfortunates who suffer heavy financial impact of anticipated misfortunes by distributing the loss among many who are exposed to the risk of similar misfortunes.

Life insurance is a type of insurance in which one person makes regular payments so that he receives a sum of money when he is a particular age, or so that his family will receive a sum of money when he dies. The process of life insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern affairs. Not only does it serve the ends of individuals, or of special groups of individuals, it tends to pervade and to transform our modern social order, too.

The main function of life insurance is to provide protection against the possible uncertainties of loss by offering different kinds of products and services. It also contributes for the economic development of a country. Different life insurance companies provide different promises for the compensation of monetary loss sustained by a particular person due to premature death or at the expiry of the date.

Literature review of the study

Life insuranceThe life insurance contract is not an indemnity contract; the undertaking on the part of the insurer is an absolute one to pay a definite sum on maturity of policy at death or an amount in installment for fixed period or during the life. According to-M. N. Mishra, Life insurance may be defined as the contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum of money on the death of the insured or on the expiry of a fixed period.R. S. Sharma, Life insurance may be defined as the contract, whereby the insurer, in consideration of premium, paid either in a lump sum or in periodical installments, undertakes to pay, annuity or a certain sum of money, either on the death of the insured or on the expiry of certain number of years. Types of policiesThe policies of life insurance can be divided in the following criteria and it can be shown graphically like-

Types of policies

Basis of duration Basis of premium payment Basis of life covered

1. Endowment policy2. Whole life policy3. Term policy1. Single premium2. Level premium policy1. Single premium2. Joint life policy

On the basis of duration of policya. Endowment Policy: Ordinary endowment policy: It provides an ideal combination of both family protection and the investment. It is taken out for a specified term of years, the sum assured being payable either on the life assureds death during the period or on his survival to the end of the period. Premiums are payable throughout the term of the policy or to a limited period or till the prior death of the life assured.

Pure endowment policy: The sum assured is payable on the life assureds surviving endowment term. In the event of his death within the term, premiums may be returnable or not.

Joint life endowment policy: The policy covers more than one life under a single policy. The sum assured is payable on the expiry of the term or on the death of one of the assured lives during the endowment period. Premiums are payable throughout the endowment period or till the prior death of anyone of the lives assured. The premium is calculated with certain modification according to the age of all insured partners. Paid up and surrender values are payable on the policy.

Fixed term or marriage endowment policy: The sum assured is payable only at the end of stipulated, but the premium ceases if death of the policy holder occurs earlier. In such event the policy will remain fully paid until the maturity date but the beneficiary may discount the policy before maturity. The policy designed to meet the need of a family man who wants to make available a certain sum for marriage of a female dependent.

Educational annuity policy: This policy is taken out on the life of the father or guardian who undergoes medical examination, the child whose benefit policy is taken is called beneficiary. The sum assured is not payable in, a lump sum but is payable, in equal installments over a period of five years. It is payable in half yearly installments for five years.

Double endowment policy: If the life assured dies during the endowment period, the basic sum assured is payable and if he survives to the end of the term, double of the sum assured is paid.

Triple benefit policy: This policy is a combination of a whole life limited payment and pure endowment with a guaranteed annual bonus payable on death during the endowment term. This policy is granted for a fixed terms of 15, 20 or 25 years. Premiums are payable throughout the term or till prior death of the life assured.

Anticipated endowment policy: The sum assured is paid at a certain interval before death within maturity of the policy and the balance of the sum assured is payable at maturity. If the event of death at any time during the term of the policy i.e. before the maturity period, full sum assured is payable without any deduction of installments paid earlier.

Multipurpose policy: Many subject matters are in one policy and it is used in multipurpose use like sick, job, unemployment, marriage, etc. premium is very high in this policy.

b. Whole life policy: Single premium or whole life policy: As the name suggests onetime payment, premium is paid onetime but the benefit goes to the nominee after the death of the insured.

Continuous premium or whole life policy: From the policy starting day premium is paid continuously until death and the nominee of the insured will get the benefit of insured.

Limited premium whole life policy: The payment of premium is limited to certain period, although the amount secured under this plan is payable on the death of the policy holder. Premium under this plan is higher than the premium paid under a whole life plan.

Convertible whole life policy: This is a whole life policy which gives its holder an option to get it converted at end of five years, into an endowment policy. If this option is exercised, this policy no longer remains a whole life policy, if it is not exercised; the policy continues to be a whole life policy.

c. Term policy: Temporary term policy: The Corporation issues term insurance for two years, which is also called two years temporary insurance policy. The sum assured will be payable only in the event of life assureds death occurring within two years from the commencement of the policy. A single premium is required to be paid at the outset. Renewable term policy: These policies are renewable at the expiry of term for an additional period without medical examination; but the premium rate will be altered according to age attained the time of renewal. This policy is beneficial to those whose health are deteriorating and will be uninsurable at an advanced age.

Convertible term policy: Under this policy, option to convert it into whole life or endowment policy is available. In corporation, the life assured under this plan has an option to convert the policy, provided in full force, into either a limited payment life policy or an endowment assurance policy.

On the basis of premium payment: Single premium: The whole premium is paid at the beginning of the policy, as compared to the annual premium payable it is costlier; but as compared to aggregate of all annual premiums payable, it is much smaller because all the premiums are received in advance and the insurer can earn additional amount on the premium received.

Level premium policy: Under this policy regular and equal premiums are paid at a definite interval. The premium is lesser than the single premium and is convenient to make premium at a regular period.

On the basis of life covered: Single life policy: Only one individual is insured. It is not necessary that the policy should be issued in ones life, it may be on others life, but the fact is that the policy insures only one life.

Joint life and last survivorship policy: In this policy more than one life is insured. This policy covers two or more lives and the policy amount is payable on the first death. For the last survivorship policy amount is payable on the last death. Objectives of the StudyTo meet the new challenges of the competitive world we should have to gather more and more knowledge about our courses. Firstly the purpose of the report is to meet up the course requirement of Insurance and Risk Management. To keep pace with the advance of new millennium as a student of BBA program, we have to gather knowledge about which factors are most important for the development of the countrys entire economy. Our report is fully based on Five Listed Life Insurance Companies. So, we have identified some objectives to prepare this report. Our objectives of preparing this report are: To explore the growth and development of life insurance business in Bangladesh. To evaluate the performance of the Life Insurance Companies of Bangladesh. To identify the offering Policies of Different Life Insurance companies of Bangladesh.

Methodology of the StudyFrom the very beginning of preparing this report we have tried our level best to make this report as a standard report. To prepare this report we have used Secondary data only and the data was collected from the published documents, relevant records, and internet.We were assigned to prepare this report by our honorable course teacher Md. Nur Nabi; Lecturer; Department of Finance and Banking; Faculty of Business Administration and Management; Patuakhali Science and Technology University. Topics were selected by him and the organization was selected by us. After that we have collect data & information. Collected data and information were interpreted to accomplish the reports objective. At the final level the findings we formatted and prepared for submission.

Limitation of the StudyBefore Preparation period and during Preparation Period of the report we have faces some Limitations. The limitation are given below Our Main Limitation is that, Our Report is fully based on secondary which is not sufficient to prepare a standard report. We have not found all the required information from the published document and official website of the selected organization. There is no earlier report to maintain the standard for preparing this report.

Company Overview

Prime Islami Life Insurance Ltd. was initially incorporated in the name of Prime Life Insurance Company Ltd. in July-2000 which was converted into an Islamic Company in the name of Prime Islami Lime Insurance Ltd. in April-2002. In a relatively short span of time, Prime Islami Life Insurance Ltd.(PILIL) has achieved a commendable progress in business, product developments and quality management. Company Profile

Name of The Company :Prime Islami Life Insurance Limited

Authorised Capital :Taka 250 Million

Paid Up Capital:Taka 90 million

Date of Incorporation :24th July, 2000

Date of Commencement of Business:June, 2001

Date of Conversion into Islami Company:22nd April, 2002

Credit Rating Grade :'A+'

Date of ISO Certification :6th October, 2006

Date of Allotement of Public Share :7th January, 2007

Face Value Per Share :TK. 100.00

Present Market Value Per Share:TK. 3450.00+

Incorporated as a public limited company on 23 January 1990 under the Companies Act 1913 to conduct life insurance business the Insurance Act 1938. On 28 March of the same year, the company obtained certificate for commencement of business. It was registered with the Controller of Insurance on 25 April 1990, following which it immediately commenced life insurance business. The authorised capital of the company is Tk 200 million divided into 2 million ordinary shares of Tk 100 each. Its paid up capital is Tk 30 million. The sponsor shareholders subscribed 50% of its paid up capital and the remaining 50% was paid by the public shareholders, of which 20.63% by institutions and 29.37% by individuals. The company went public in January 1996 and was enlisted with the Dhaka Stock Exchange on 6 April 1996.The management of the company is vested in a 32-member board of directors with the managing director as the chief executive, who is assisted by 5 executives. Date of Incorporation January 23, 1990

Obtained certificate for commencement of businessMarch 28, 1990

Registered with the Controller of Insurance April 25, 1990

Prospectus issued for floatation of public sharesJanuary 01, 1996

Subscription openedJanuary 08, 1996

Subscription closedJanuary 14, 1996

Listed with Dhaka Stock ExchangeApril 06, 1996

First trading of shares on Dhaka Stock Exchange FloorApril 06, 1996

First A.G.M of public shareholdersAugust 25, 1996

First election of Directors from public subscribersNovember 20, 1997

Settlement of SLIC shares in Demate mode in the CDSApril 27, 2004

Number of Directors19

Life fund at the end of the year 2006165.72 Crore

Bonus Share for the year 200620 shares for every 100 shares (20 :100)

Progati Life Insurance Limited, a third generation life insurance company, was set up on January 30, 2000 as a public limited company under the Companies Act, 1994 with the philosophy of maintaining competitiveness, balanced with prudent management and fairness to all the policyholders. It obtain registration from the Department of insurance on April 11,2000 under the Insurance Act, 1938 to carry out life insurance business. The company started with a paid up capital of Tk. 30 million against an authorized capitalofTk.250milion. Pragati life has sponsored by some renowned business entrepreneurs of the country linked to different industries groups. The company had gone under public offering of share and raised its paid up capital to the true of Tk75 million in order to comply with the minimum capital requirement. The share of the company are listed with both the bourses of the country. Pragati life is also the first insurance company in Bangladesh providing status of policies through Push-Pull(SMS) service for its policy holders. Policyholders of the company also know their policy details through the official website. The company has been awarded Credit Rating A+ by Credit Rating Information and Service Limited (CRILS) for its High Claims Paying Ability.

Life Insurance Company LimitedProgressive Life Insurance Company Limited is a Insurance Company under private sector established within the ambit of Insurance Act 1938 and was incorporated as a Public Limited Company under Companies Act, 1994 on 6 th January 2000. The Company started commercial operation after obtaining license from Chief Controller of Insurance, Government of the Peoples Republic of Bangladesh under the Insurance Act 1938 and Rules 1958 on 27 th February, 2000. The Company is engaged in all kind of Life Insurance business whether individual or group including pension, superannuation, health care scheme etc. It also operates in micro life insurance business under the names of Sujan Bima and Progressive Deposit Pension Scheme.

Rupali Life Insurance Company LimitedRupali Life Insurance Company Ltd(RLIC) is one of the leading Life Insurance Companies in Bangladesh. It has a very dignified management having magnificent professional Identity, illustrious educational background and honesty.

Rupali Life Insurance Company Limited (RLIC) was established in 2000. Today Rupali Life, with its Head Office in Dhaka operates 488 Agency Offices throughout Bangladesh. Rupali Life Insurance Company Limited offers a system to replace the loss of income that occurs when someone dies (usually the person who produces the majority of income in a family situation). It is a contract between you as insured person and RLIC that is providing the insurance if our clients dies while the contract is in force, the Rupali Life Insurance Company Limited will pay a specified sum of money free from income tax "Cash benefits" to the person or persons beneficiaries or nominees.

Product Diversification

Prime Life Insurance company generally offers the followings policies-

The product line of Sandhani Life Insurance Company- 1) Ordinary life:I. Whole life assurance plan-with profitsII. Endowment assurance policy-with profitsIII. Anticipated Endowment Assurance plan- with profitsIV. Three Benefit Endowment Assurance plan- with profitsV. Joint Life Endowment Assurance plan- with profitsVI. Single premium Assurance Plan- with profitsVII. Marriage Assurance PlanVIII. Single Premium Term Assurance-without profitsIX. Pension Assurance plan-without profitsX. Personal Pension PlanXI. Advance Payment Assurance Plan with profitsXII. Child protection Insurance without profits2) Group Life & Health Schemei. Health care Group Schemeii. Group Term Life Schemeiii. Group Endowment policyiv. Group Variable Endowment Insurance3) Islami Bimai. Hajj Bimaii. Mohorana Bimaiii. Islamic Deposit Pension Schemeiv. Islami Money back insurance4) Othersi. Supplementary Hospitalization Insurance benefitsii. Three, four and five Stage anticipated Endowment Assurance Plan

The offering products of Pragati Life insurance company are-Plan 1- Jibon Sathi (With Bonus): Policy Term 11-14 YearsPlan 2- Jibon Prottasha (With Bonus): Policy Term 12, 15, 18, 21, 27, 30 YearsPlan 3- Jibon Tiri (With Profit): Policy Term 12-25 YearsPlan 4- Jibon Somahar (With Profit): Policy Term 12- 21 YearsPlan 5- Jibon Alo (With Bonus): Policy Term 12, 15, 18, 21 YearsPlan 6- Jibon Bondhu (With Bonus): Policy Term 10-25 YearsPlan 7- Jibon Abokash (Pension): Policy Term 6-29 YearsPlan 8- Jibon Bikash (Child Education): Policy Term 3-14 YearsStipends & Lump Sum Amount (per Unit) Level of EducationAnnual Stipend* Duration of PaymentTotal Stipend

Class X - S.S.C - H.S.CTk. 1,20036 months (3 years) Tk. 3,600

4-year Bachelor's Degree Tk. 2,40048 months (4 years)Tk. 9,600

2-year Master's DegreeTk. 3,60024 months (2 years) Tk. 7,200

Plan 9- Corporate Plan (Single Premium): Policy Term 3, 5, 10 YearsPlan 10- Jibon Uttoron (Joint Life): Policy Term 10-25 YearsPlan 11- Jibon Porosh (Hospitalization Insurance): All kinds of hospital related expenses e.g. Room rent, Consultation fees, Routine Investigation, Medicines, Surgery and Ancillary services will be covered under this plan.

Plan 12- Jibon Shonchoi (Single Oremium): Policy Term 2-5, 6, 9 YearsSingle PremiumPolicy TermSum Assurance(payable on death)Maturity Value(payable at maturity if survives)

Premium amount will be decided by the Policyholder.2 Years150 % of Single Premium110 % of Single Premium

3 Years150 % of Single Premium120 % of Single Premium

4 Years175 % of Single Premium130 % of Single Premium

5 Years175 % of Single Premium140 % of Single Premium

6 Years200 % of Single Premium150 % of Single Premium

9 Years200 % of Single Premium200 % of Single Premium

Plan 13 - Jibon Purnota (Hajj Bima) Islami Insurance Plan 14 - Jibon Bondhon Islami Insurance

Pragati Bima (Rural Insurance)

Pragati Bima is the innovative product offering from Pragati Life Insurance Limited. Feel free to contact us on any of the following.

Plan A - Shonchoi 3-in-1 Policy Plan B - Shonchoi 3 payments PolicyPlan C - Shonchoi 4 payments Policy Plan D - Sonchoi somahar policy Plan E - Education Endowment Policy Plan F - DPS (Pension Policy) Plan G - Jibon Sanchay

Life Insurance Company LimitedProgressive Life Insurance Company Limited Generally offers the following Policies-The Company is engaged in all kind of Life Insurance business whether individual or group including pension, superannuation, health care scheme etc. It also operates in micro life insurance business under the names of Sujan Bima and Progressive Deposit Pension Scheme. The offering policies of Progressive life insurance company are-A) Ordinary life:I. Whole life assurance plan-with profitsII. Endowment assurance policy-with profitsIII. 3 stage Anticipated Endowment Assurance plan- with profitsIV. 4 stage Anticipated Endowment Assurance plan- with profitsV. Three Benefit Endowment Assurance plan- with profitsVI. Joint Life Endowment Assurance plan- with profitsVII. Single premium Assurance Plan- with profitsVIII. Single premium special endowment Assurance Plan- with profitsIX. Marriage Assurance Plan- with profitsX. Single Premium Term Assurance-without profitsXI. Pension Assurance plan-without profitsXII. Personal Pension PlanXIII. Progressive Deposit Premium Scheme- With ProfitsXIV. Advance Payment Assurance Plan with profitsXV. Endowment Assurance with PDAB benefits- With Profits B) Group Life & Health SchemeI. Group Term Life SchemeII. Group Endowment policyIII. Health care Group SchemeC) Islami BimaI. Islamic Deposit Pension Scheme- with profitsII. Endowment Assurance plan- with profitsIII. Hajj Bima- with profitsIV. Mohorana Bima- with profitsV. Deposit pension scheme- with profitsD) Sujan Bima DivisionI. Endowment Assurance with ProfitsII. Single Payment Endowment Assurance Plan- with profitsIII. Anticipated Endowment Assurance Plan- with profitsIV. Anticipated Endowment Assurance Plan- with profitsRupali Life Insurance Company LimitedOffering Policies of Rupali Life Insurance Company1. Ordinary life:I. Whole life assurance plan-with profitsII. Endowment assurance policy-with profitsIII. Anticipated Endowment Assurance plan- with profitsIV. Joint Life Endowment Assurance plan- with profitsV. Single premium Assurance Plan- with profitsVI. Marriage Assurance PlanVII. Single Premium Term Assurance-without profitsVIII. Pension Assurance plan-without profitsIX. Personal Pension PlanX. Advance Payment Assurance Plan with profitsXI. Child protection Insurance without profits2. Group Life & Health SchemeI. Health care Group SchemeII. Group Term Life SchemeIII. Group Endowment policy3. Islami BimaI. Hajj BimaII. Islamic Deposit Pension SchemeIII. Islami Money back insurance4. OthersI. Supplementary Hospitalization Insurance benefits