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AProject Report
On
“SARAL SHIELD TERM PLAN IN LIFE INSURANCE"
Submitted in Partial Fulfilment for the Award of the Degree of
MASTER OF COMMERCE (BANKING & INSURANCE)
By
KANTUVARI SUMALATHA
H.T.No:12009C-2026
Under the guidance of
Dr.G.Shashidar Rao
CHANDA KANTHAIAH MEMORIAL ARTS AND SCIENCE COLLEGE(Affiliated to Kakatiya University, Govt. Aided, Accredited B++ by NAAC)
Deshaipet, Warangal - 506006
CERTIFICATE
This is to certify that the project report entitled “SARAL SHIELD IN TERM PLAN IN LIFE
INSURANCE” name is a record of bonafide work carried out by the student: KANTUVARI
SUMALATHA bearing ROLL NO: 12009C-2026 during the academic year 2011-12 in
partial fulfillment for the award of the degree Master of Commerce (Specialization with
banking and insurance) by the Kakatiya University , Warangal.
……………………………
Project Guide
……..………………………
Head Of the Department
………………………………..
External Examiner
Date:…………….
WHOM SO EVER IT MAY CONCERN
This is to certify that KANTUVARI SUMALATHA student of CKM College, Warangal
bearing HT.NO.12009C-2026 has successfully completed his ll year M.com (Banking &
Insurance) project titled “SARAL SHIELD IN TERM PLAN IN LIFE INSURANCE” IN SBI LIFE
INSURANCE from our center
…………………………
UNIT MANAGER
ACKNOWLEDGEMENT
It is privilege for us to have under takers the project “SARAL SHIELD IN TERM PLAN
IN LIFE INSURANCE” Sbi Life Insurance Co. Ltd We are thankful to our principal
DR.G.MOHAN GARU Principal. CKM Arts & Science College for encouraging doing
this project. We are deeply indebted to DR.T.SHOBA KUMARI GARU Head of the
department, whose motivation in the field of project development was they made us
overcome all the hardships during the course of study.
We are heartly thankful to our internal guide MR.MALLIKARJUN GARU for his
moral support who was always there to conforming and solacing me at the times of
frustration. Our philosophical debates ,exchanges of knowledge ,skills and venting of
infrastructure and her insightful comments during our project work program helped us
to enrich our experience.
Although a leaflet title “Acknowledgements” cannot represents my true feelings for all
these persons. I feel very much thankful to all of them and also to our all the people
who helped me in making this endeavor a reality.
DECLARATION
We hereby declare that the project entitled “SARAL SHIELD IN TERM PLAN IN LIFE
INSURANCE” submitted to the department of Master of Computer Applications; CKM
College afflicted to the Kakathiya University, Warangal for partial fulfillment of the
requirement for the award of Master of Commerce (Banking & Insurance) is a result of
original work carried out by us. This work in original has not been submitted so far in
part or full for any other institute or University.
KANTUVARI SUMALATHA
(12009C-2026)
CHAPTER-I
INTRODUCTION
INTRODUCTION OF INSURANCE:
Insurance is the equitable transfer of the risk of a loss, from one entity to another in
exchange
against the risk of a contingent, uncertain loss.An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the person or entity
buying the insurance policy. The amount to be
insurance coverage is called the premium.
appraising and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's promise
to compensate (indemnify) the insured in the case of a financial (personal)
The insured receives a contract, called the insurance policy, which details the
conditions and circumstances under which the insured will be financially compensated.In
India, insurance has a deep-rooted history. It finds mention in the writings of Manu (
Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ).
for payment. It is a form of risk management primarily used to hedge
charged for a certain amount of
Risk management, the practice of
loss.
The writings talk in terms of pooling of resources that could be
re-
distributed in times of calamities such as fire, floods, epidemics and famine. This was
probably a pre-cursor to modern day insurance. Ancient Indian history has preserved
the earliest traces of insurance in the form of marine trade loans and carriers’ contracts.
Insurance in India has evolved over time heavily drawing from
England in particular. 1818 saw the advent of life insurance business in India with
the establishment of the Oriental Life Insurance Company in Calcutta. This Company
however failed in 1834. In 1829, the Madras Equitable had begun transacting life
insurance business in the Madras Presidency. 1870 saw the enactment of the British
Insurance Act and in the last three decades of the nineteenth century, the Bombay
Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay
Residency. This era, however, was dominated by foreign insurance offices which did
other countries,
good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and
London Globe Insurance and the Indian offices were up for hard competition from the
foreign companies.
Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was
the first
Companies Act was enacted to enable the Government to collect statistical information
about both life and non-life business transacted in India by Indian and foreign insurers
including provident insurance societies. In 1938, with a view to protecting the interest
of the Insurance public, the earlier legislation was consolidated and amended by
the Insurance Act, 1938 with comprehensive provisions for effective control over the
activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies. However,
there were a large number of insurance companies and the level of competition was
high. There were also allegations of unfair trade practices. The Government of India,
therefore, decided to nationalize insurance business.
on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance
Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16
non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in
all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to
the private sector.
In 1914, the Government of India started publishing returns of
statutory measure to regulate life business. In 1928, the Indian Insurance
An Ordinance was issued
The history of general insurance dates back to the Industrial Revolution
in the west and the consequent growth of sea-faring trade and commerce in the 17th
century. It came to India as a legacy of British occupation. General Insurance in India
has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in
Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This
was the first company to transact all classes of general insurance business. 1957 saw
the formation of the General Insurance Council, a wing of the Insurance Associaton of
India. The General Insurance Council framed a code of conduct for
conduct and sound business practices.
regulate investments and set
Committee was also set up then.
Business (Nationalisation) Act, general insurance business was nationalized with effect
from 1st January,
ensuring fair
In 1968, the Insurance Act was amended to
minimum solvency margins. The Tariff Advisory
In 1972 with the passing of the General Insurance
1973. 107 insurers were amalgamated and grouped into four
companies, namely
Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance
Company Ltd.
company in 1971 and it commence business on January 1sst 1973.
has seen insurance come a full circle in a journey extending to nearly 200 years. The
process of re-opening of the sector had begun in the early 1990s and the last decade
and more has seen it been opened up substantially. In 1993, the Government set up a
committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose
recommendations for reforms in the insurance sector.The objective was to complement
the reforms initiated in the financial sector. The committee submitted its report in 1994
wherein , among other things, it recommended that the private sector be permitted to
enter the insurance industry.
National Insurance Company Ltd., the New India Assurance
The General Insurance Corporation of India was incorporated as a
This millennium
They stated that foreign companies be allowed to enter by floating Indian
preferably
companies,
recommendations of the Malhotra Committee report, in 1999, the ] Insurance Regulatory
and Development Authority (IRDA) was constituted as an autonomous body to regulate
and develop the insurance industry. The IRDA was incorporated as a statutory body in
April, 2000. The key objectives of the IRDA include promotion of competition so as to
enhance customer satisfaction through
premiums, while ensuring the financial security of the insurance market.
opened up the market in August 2000 with the invitation for application for registrations.
Foreign companies were allowed ownership of up to 26%. The Authority has the power
to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000
onwards framed various regulations ranging from registration of companies for carrying
on insurance business to protection of policyholders’ interests.
the subsidiaries of the General Insurance Corporation of India were restructured as
independent companies and at the same time GIC was converted into a national re-
insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002.
Today there are 24 general insurance companies including the ECGC and Agriculture
Insurance Corporation of India and 23 life insurance companies
country. The insurance sector is a colossal one and is growing at a speedy rate of 15-
20%. Together with banking services, insurance services add about 7% to the country’s
GDP. A well-developed and evolved insurance sector is a boon for
a
joint
venture
with
Indian
partners.
Following
the
increased consumer choice and lower
The IRDA
In December, 2000,
operating in the
economic
development as it provides long- term funds for infrastructure development at the same
time strengthening the risk taking ability of the country.
RE-OPENING OF THE SECTOR
The process of re-opening of the sector had begun in the early 1990s and the last decade and
more has seen it been opened up substantially. In 1993, the Government set up a committee
under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations
for reforms in the insurance sector. The objective was to complement the reforms initiated in
the financial sector. The committee submitted its report in 1994 wherein , among other things, it
recommended that the private sector be permitted to enter the insurance industry. They stated
that foreign companies be allowed to enter by floating Indian companies, preferably a joint
venture with Indian partners.
Following the recommendations of the Malhotra Committee report, in 1999, the ]
Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous
body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory
body in April, 2000. The key objectives of the IRDA include promotion of competition so as to
enhance customer satisfaction through increased consumer choice and lower premiums, while
ensuring the financial security of the insurance market.
The IRDA opened up the market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the
power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000
onwards framed various regulations ranging from registration of companies for carrying on
insurance business to protection of policyholders’ interests. In December, 2000, the subsidiaries
of the General Insurance CIndia were restructured as independent companies and at the same
time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four
subsidiaries from GIC in July, 2002. Today there are 24 general insurance companies including
the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies
operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate
of15- 20%. Together with banking services, insurance services add about 7% to the
country’s GDP. A well-developed and evolved insurance sector is a boon for economic
development as it provides long- term funds for infrastructure development at the same
time strengthening the risk taking ability of the country.
SBI Life - Smart Shield is a traditional non-participating pure term plan, which is a one stop
solution that meets all your insurance needs. With Options and benefits specially tailored for
those who want best financial protection at an affordable cost, this is the perfect plan from your
preferred insurance provider. Now your family stays protected, even when you are not around.
TYPES OF INSURANCE:
The commonly know insurance covers can be categories of two types:
Life insurance
Non-life insurance
1. LIFE INSURANCE
a) Money back
b) Pension
c) Women, girl child and couple
d) Endowment
e) Whole life
f) Child insurance policy
(a) Money back:
jeevan sanchary
money back with profits policy
jeevan surabhi
b) Pension:
1.new jeevan dhara
2.jeevan suraksha without life-cover plan
3. jeevan suraksha with life-cover
4. jeevan suraksha endowment plan
C.WOMEN ,GIRL CHILD AND COUPLE:
1.jeevan saathi-for married couples
2.jeevan saritha-for married couples
3.jeevan sneha-for woman only
4.jeevan sukanya-for the girl child
d) Endowment:
1. jeevan shree2.endowment policy without profits
3. endowment policy with profits
4. limited payment endowment with profit
5.jeevan mitra
6. jeevan mitra-triple cover
7.bima kiran
8. jeevan ariha
e) Whole Life:
1.whole life policy with profits
2.limited payment whole life
3.convertible whole life
f) CHILD INSURANCE POLICY:
1. jeevan kishore children’s deferred assurance plan
2. new children’s deferred assurance plans
3.bal vidya
2. NON-LIFE INSURANCE:
a) Property
b) Liability
c) Health
d) Business
e) Fire insurance
f) Travel
g) General insurance
A.Property:
personal and business property insurance that covers risks against fire, marine, theft andburglary,the types of insurance under this category are:
1. Home insurance/domestic cover
2. Business insurance
3. Commercial insurance
Liability:
the protects the against injury or damage made by a third party. The types of insurance underthis category are:
1.Automatically insurance2. Works compensation3. Liability insurance4. Aviation insurance
a) Health :
Medi cliam policy
Personal accdent-individual
Personal accident-family
Group accident insurance
Jan arogya bima policy
Taffic accident policy
PRINCIPLES OF INSURANCE
These principles are the essentials or requirements of insurance irrespective of the type of
insurance concerned. There are seven fundamental principles of Insurance :
Principle of Utmost good faith : Principle of Utmost Good Faith, is the primary principle of
insurance. According to this principle, the insurance contract must be signed by both parties (
insurer and insured) in an absolute good faith or belief or trust. Both parties in the contract must
disclose all material facts for the benefit of each other. False information or non-disclosure of
any important fact makes the contract avoidable.
Principle Of Indemnity : The principle of indemnity is applicable to all types of insurance policies
except life insurance. Indemnity means security, protection and compensation given against
damage, loss or injury. The insurer promise to help the insured in restoring the position before
loss. Whenever there is a loss of property, the loss is compensated. The compensation payable
and the loss suffered should be measurable in term of money. The insured will be compensated
only up to the amount of loss suffered by him. He will not earn profit from the contractor. The
maximum amount of compensation will be upto the value of the policy which is fixed at the time of
contract.
Principle of Insurable Interest : The person getting an insurance policy must have an insurable
interest in the property or life insured. A person is said to have an insurable interest in the
property if he is benefited by its existence and be prejudiced by its destruction. The presence
of insurable interest is a legal requirement. So an insurance contract without the existence
of insurable interest is not legally valid and cannot be claimed in a Court. The object of this
principle is to prevent insurance from becoming a gambling contract.
Principle of Subrogation : According to the principle of subrogation, when the insured is
compensated for the losses due to damage to his insured property, then the ownership right of
such property shifts to the insurer. The principle of subrogation is applicable to all insurances
other than the life insurance. If the insured party gets a compensation for the loss suffered by
him, he cannot claim the same amount of loss from any other party. It prevents the insured
being indemnified from two sources in respect of the sameloss.
Principle Of Contribution : Sometimes a property is insured with more than one
company. The insured cannot claim more than total loss from all the companies put together.
He cannot claim the same loss from different companies. If one insurer pays full compensation
then that insurer can claim proportionate claim from the other insurers. A person cannot be
restored to a better position than before the loss occurred. The total loss suffered by the insured
will be contributed by different companies in proportion to the value of policies issued by them.
Principle Of Proximate Cause : Principle of Proximate Cause means when a loss is
caused by more than one causes, the proximate or the nearest or the closest cause should be
taken into consideration to decide the liability of the insurer. This principle is found very useful
when the loss occurred due to series of events. However, in case of life insurance, the principle
of Proximate Cause does not apply. Whatever may be the reason of death the insurer is liable
to pay the amount of insurance.
Principle of Loss minimization : According to the Principle of Loss Minimization, insured
must always try his level best to minimize the loss of his insured property, in case of sudden
events like fire etc. The insured must take all necessary steps to control and reduce the losses
and to save what is left. This principle makes the insured more careful in respect of this
Limitations of insurance
If you are in the market for a life insurance policy, there are some limitations that you
should keep in mind before committing yourself to a policy or otherwise making a final decision.
Generally, if you are only purchasing a policy that pays out $5000-$10,000, the limitations
are minuscule. You will normally not have to undergo a physical exam or any other in person
examination in order to be covered. And coverage can generally be purchased for pennies per
day. In fact, if you are employed, many larger employers may provide you with a life insurance
benefit of up to $10,000 as part of your employment benefits that you do not even have to pay
for.
Among the most common limitations with regard to life insurance is known as a suicide
limitation. Simply put, if you purchase a life's insurance policy and then commit suicide, many
companies are released from their obligation to pay out on your policy. Depending on the policy,
this limitation may be in effect for only the first couple of year or may be imposed for the life of
the policy. It is very important to fully understand this limitation.
Another common limitation regarding life insurance has to do with preexisting conditions.
Generally, once you are approved for a policy, you preexisting medical conditions have already
been determined acceptable and your policy will be honored even if your condition(s) contribute
to your death. However, if you are dishonest during the application process with regard to your
actual medical condition and the insurance company determines that you attempted to defraud
them as such, they are generally within their rights to deny payment on your policy.
Another thing to keep in mind when considering any limitations on your life insurance
policy is the fact that, if you are the primary bread winner in your household, they are probably
counting on you for support. Most life insurance policies only pay out in the event of your actual
demise, but what happens to your family if you are grievously injured or otherwise unable to
work due to illness or injury? Because standard life insurance policies are not designed to pay
out under these kinds of circumstances, it is generally advisable to purchase supplemental
coverage that is intended to pay out in the event that you are no longer able to work.
The bottom line is that financial security is imperative, and purchasing a life insurance
policy that you understand and which will provide for your family when you are unable to is one
step that you can take to ensure that your loved ones will be protected after you are gone.
I have done some research for you and found these Life Insurance Experts [http:/
/lifeinsurance4u.info] can get you the very best deals on a policy that fits your individual
needs.You can be insured with the best policy as early as this Life Insurance provides the dual
benefits of savings and security. The following benefits explain why this investment tool should
be an integral part of your financial plans.
OBJECTTIVS OF INSURANCE
•
To understand marketing policies. And practices being followed by the various insurancecompanies.To examine the regulatory framework and environment of insurance business.To find out different types of pricing and product management strategies adopted byinsurance companies.To examine the various promotional and distribution channel/intermediaries used byinsurance companies for marketing their products.To find the effectiveness of marketing strategies being adopted by insurance companiesunder study.To measure the satisfaction level of customer of insurance companies.To study the policy perspective of the government as to the insurance business.
••
•
•
••
ADVANTAGES OF INSURANCE
Risk Cover - Life today is full of uncertainties; in this scenario Life Insurance ensures that your
loved ones continue to enjoy a good quality of life against any unforeseen event.
Planning for life stage needs - Life Insurance not only provides for financial support in the event
of untimely death but also acts as a long term investment. You can meet your goals, be it your
children's education, their marriage, building your dream home or planning a relaxed retired life,
according to your life stage and risk appetite. Traditional life insurance policies i.e. traditional
endowment plans, offer in-built guarantees and defined maturity benefits through variety of
product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.
Protection against rising health expenses - Life Insurers through riders or stand
alone health insurance plans offer the benefits of protection against critical diseases and
hospitalization expenses. This benefit has assumed critical importance given the increasing
incidence of lifestyle diseases and escalating medical costs.
Builds the habit of thrift - Life Insurance is a long-term contract where as policyholder,
you have to pay a fixed amount at a defined periodicity. This builds the habit of long-term
savings. Regular savings over a long period ensures that a decent corpus is built to meet
financial needs at various life stages.
Safe and profitable long-term investment - Life Insurance is a highly regulated
sector. IRDA, the regulatory body, through various rules and regulations ensures that the safety
of the policyholder's money is the primary responsibility of all stakeholders. Life Insurance being
a long-term savings instrument, also ensures that the life insurers focus on returns over a long-
term and do not take risky investment decisions for short term gains.
Assured income through annuities - Life Insurance is one of the best instruments for
retirement planning. The money saved during the earning life span is utilized to provide a steady
source of income during the retired phase of life.
Protection plus savings over a long term - Since traditional policies are viewed both
by the distributors as well as the customers as a long term commitment; these policies help the
policyholders meet the dual need of protection and long term wealth creation efficiently.
Growth through dividends - Traditional policies offer an opportunity to participate in
the economic growth without taking the investment risk. The investment income is distributed
among the policyholders through annual announcement of dividends/bonus.
Facility of loans without affecting the policy benefits - Policyholders have the option of
taking loan against the policy. This helps you meet your unplanned life stage needs without
adversely affecting the benefits of the policy they have bought.
Tax Benefits-Insurance plans provide attractive tax-benefits for both at the time of entry and exit
under most of the plans.
Mortgage Redemption- Insurance acts as an effective tool to cover mortgages and loans
taken by the policyholders so that, in case of any unforeseen event, the burden of repayment
does not fall on the bereaved family.
MEANING AND DEFINITION OF LIFE INSURANCE
Life insurance usually referred as life assurance the insured against the happaining
of certain event i.e death through the time when it may happen is uncertain.
Section 2 of the Indian insurance Act, 1938 has defined life insurance as life insurance
business is the business of effecting contract upon human life.
“The life insurance contract embodies an agreement, in which, broadly stated, the
insurer, the insurer undertakes to pay a stipulated sum upon the death of the insured, or
at some designated time to a designated beneficiary.
J.H. MAGGEE
WHY TO BUY LIFE INSURANCE :-
To protect and support your beneficiaries home and livelihood.
To replace your income and minimite the debt load for your heirs.
To provide beneficiaries with income tax free proceeds.
To provide heirs with benefits to pay the tax on your estate.
To help protect the value of your estate.
Life insurance helps protect the financial security of your family in the event of your on timely
death. This is especially important when your are the primary wage earner. The owner of the
policy pays the insurer premiums in exchange for a promise to pay the beneficiaries a death
benefit upon the death of the insured.
Pension plan = Investment + Death Benefit + Survival Benefit + Regular Income +
Tax Benefits
Today I am 25 yrs old and earning 100000 p.m but will I be able to work with same
energy even after 60. I need to plan my future with financial stability when I will not have my
regular income pension/retirement plans are the solutions to it. It is necessary to ensure regular
income for life after retirement, so that you can live with pride and enjoy your twilight years. The
amount of investment in a pension plan shall depend on how much monthly income do you
need post retirement years. Use retirement calculator to calculate your investment to get the
desired pension amount
CHAPTER-ll
COMPANY PROFILE
SBI LIFE INSURANCE COMPANY PROFILE:
Formed in 2001, SBI life Insurance is a joint venture between SBI- India’s largest bank and BNP
Paribas Assurance – France’s banking and financial services provider. SBI owns 74% of the
total capital and BNP Paribas Assurance the remaining 26%.
PRODUCT PROFILO:
RETIREMENT PLAN:
The cost of living is experiencing fast steady rise which makes retirement plan an
important financial decision. Better known as Pension plan, this plan takes care financial needs
after retirement by investing a part of your savings for limited period. Pension plan provides
fixed income after retirement and takes care of daily needs. The pension plan offered by SBI
Life is Lifelong Pension Plus.
CHILD PLAN:
Parenthood brings responsibilities which you cherish each day. Child Plan is a plan specifically
designed to take care of financial needs of your child. Child plan provides with necessary funds
that will take care of child’s education, marriage etc. By investing small portion of your savings
you make sure your child’s financial aspirations are met. Child plans of SBI Life are called Smart
Scholar and Scholar II.
TERM PLAN:
A risk plan which provides comprehensive cover for your family in the unfortunate event
of untimely demise. A term life insurance plan provides good cover at relatively nominal cost
and has no survival benefits. SBI Life term plans are Smart Shield, Saral Shield and Swadhan.
INVESTMENT PLAN:
Popularly known as ULIP, an investment plan invests part of your savings in equity or debt
market as per your preference. The purpose of investment plan is to give you returns which
easily beat the rising costs since the usual returns in a bank are extremely low. ULIP’s
offered by SBI Life are Smart Performer,Uni Plus Super Saral Maha Anand, Smart Elite, Money
Back, Shubh Nivesh,Smart Horizon and Saral Life.
HEALTH PLAN:
Slightly different from health insurance, health plan provides cover for surgery costs, critical
illness. A lump sum is paid irrespective of actual hospital bill. Hospital Cash is SBI’s health plan.
DISTRIBUTION PRODUCT:
SBI Life extensively leverages the State Bank Group relationship as a platform for cross-selling
insurance products and has over 65,000 Insurance advisors.
FINANCIAL INFROMATION:
The total premium earned for the half year ended September 30, 2010 was Rs 48,298 million.
The profit after tax for the same period is Rs 2,167 million. A total of 6,614 claims were made
during the period out of which 4,983 claims were settled and 946 cases were rejected.
MARKETING COMPAIGNS:
SBI relies on bancassurance channel for insurance sales so the campaign was designed to
reach the people who are not customers of the bank. SBI Life campaigns have always focused
on the optimism side of the table, the “feel good” factor. SBI life television commercial has
been revolving around this very thought of “Celebrate life”. Be it elderly people playing cricket,
husband wife chatting and being fully confident or the elderly sisters paying surprise visit to her
brother on his 70th birthday, the theme has been always been of enjoying life.
DISTINCTIONS:
1. Ranked No.1, in New Business Premium, amongst private life insurance companies.
2. Bagged the coveted personal finance award-Outlook Money NDTV Profit "Best Life Insurer
2008".
3. CRISIL, country’s leading rating agency, reaffirmed its highest financial rating AAA/Stable to
SBI Life. In 2007, SBI Life became the first life insurer in India to receive this rating from CRISIL.
4. Retained ISO 9001:2000 certificate for superior claim settlement process.
5. Rated as the ’The Most Trusted Private Life Insurer’ according to a survey conducted by
Brand Equity in association with AC Nielsen ORG-MARG and the Economic Times Intelligence
Bureau.
MANAGEMENT:
Mahadev N Rao is the MD & CEO of SBI Life.
Sangramjit Sarangi is the Head of Finace of SBI Life.
Sanjeev Pujari is the Appointed Actuary of SBI Life.
REACH SBI LIFE:
Email: [email protected]
Telephone: 1800 22 9090
SMS “CELEBRATE” to 56161
SBI LIFE PRODUCT TABLE:
Retirement/Pension Plan
SBI Life- Lifelong Pension Plus
Child Plan
SBI Life - Smart Scholar
Child Plan
SBI Life - Scholar II
Term Plan
SBI Life- Smart Shield
Term Plan
SBI Life – Saral Shield
Term Plan
SBI Life - Swadhan
Savings & Investment Plan
SBI Life – Smart Performer
Savings & Investment Plan
SBI Life – Unit Plus Super
Savings & Investment Plan
SBI Life – Saral Maha Anand
Savings & Investment Plan
SBI Life – Smart Elite
Savings & Investment Plan
SBI Life – Money Back
Savings & Investment Plan
SBI Life – Sanjeevan Supreme
Savings & Investment Plan
Savings & Investment Plan
Savings & Investment Plan
SBI Life – Shubh Nivesh
SBI Life- Smart Horizon
SBI Life – Saral Life
Health Plan
ED MONEY
SBI Life – Hospital Cash
SBI LIFE INSURANCE COMPANY LIMMITED
RATING:
ICRA has assigned an iAAA (pronounced I triple A) rating, indicating highest claims paying
ability, to SBI Life Insurance Company Limited. The rating points to the fundamentally strong
position of SBI Life and underscores that the prospects of the company meeting its policyholder
obligations are very high. (Refer Annexure for Rating History)
CLAIMS PAYING ABILITY RATINGS
ICRA‟s Claim Paying Ability Ratings (CPRs) are its views on the ability of life
insurance companies to pay claims and policyholder obligations in a timely manner. These
ratings take into account the financial strength of the insurance company.
As well as the ability and the strength of the promoting entities to support the venture
or the insurance compa ICRA‟s methodology of rating life insurance companies involves a
comprehensive analysis of industry dynamics, the regulatory environment, the company‟s
franchise and competitive position, and its financial position. A key element of ICRA‟s
evaluation is the financial strength of the promoting entity and its ability to infuse capital to fund
the growth and regulatory solvency requirements of the life insurance company and support
its financial profile. The rating methodology is a combination of qualitative and quantitative
analyses and includes an interactive process with management to understand and assess
its strategy and key aspects of its business, which qualitatively drive its operating position
and financial policy. ICRA‟s CPRs are essentially forward looking and attempt to assess the
company‟s ability to withst
STRENGTHS
1. Strong parent support from SBI and BNP Paribas Assurance, ensuring deep penetration,infrastructure support and robust risk management systems
2.Demonstrated ability of promoters to infuse capital at regular intervals to fund growth
3.Strong brand recognition of SBI
4.Third largest private sector player with a market share of 6.2% in 2008 (based on NBAPE1)and the first private sector player to report accounting profits in FY06
5.Favorable cost structure and control over multiple distribution channels, which is a source ofsustainable competitive advantage
6.Industry growth supported by favourable demographic profile and economic buoyancy
7. Strong regulatory framework for the industry, with guidelines for investments, capitaladequacy and accounting treatments.
CHANGES
1. As in the case of other major private sector life players in India, the business is in the initialgrowth phase
2. Low persistency ratio could result in losses and hamper growth prospects
3. Large dependence of the industry on unit-linked products, which are vulnerable to equitymarket downturns
4. Prolonged slowdown in the growth of life insurance industry can hamper profitability
5 Competitive pressures are likely to remain high, with the entry of a large number of newentrants in tress and meet policyholder liabilities .recent years.
SUMMARY RATIONALE
The rating takes into account strong parent support from SBI & BNP Paribas
Assurance. SBI Life has achieved a compounded annual growth rate (CAGR) of 123%
in the period from 2004 to 2008, reflecting its strong brand franchise and distribution
reach, outperforming the market to achieve a market share of 6.2%. SBI Life derives
significant synergies from its major shareholder, SBI, in the form of steady revenues through
bancassurance channel including cross-selling with loan products, extensive distribution reach
and low expense structure. Its other parent, BNP Paribas Assurancebrings strong operational
and risk management expertise, thereby assisting SBI Life in building robust systems and
procedures.
The channel productivity of SBI is among the best, which contributes to its low-cost
structure as compared to peers. SBI Life was the first private life insurer to achieve break-
even and reported net profits for the last three years. SBI Life is adequately capitalised and
its parents are well-poised to infuse capital at regular intervals to support its future growth.
However, ICRA notes that low persistency rates for unit-linked policies and prolonged slowdown
in the growth of life insurance industry can hamper profitability and the ability to meet future
liabilitie
Life insurance is a capital-intensive business, requiring significant upfront investments
with a long gestation period. While business growth and market share are vital for life insurance
companies to allow better utilisation of distribution infrastructure and other overheads, these
investments are incurred upfront and involve significant capital. During this initial start-up phase,
all players require additional capital to fund growth and the ability and willingness of promoters
to infuse capital remains critical to meet solvency requirements. At the same time, the business
growth needs to be backed by sustainable attributes like brand name, cost structure and
distribution reach, which enable insurance companies to offer reliable services to its customers
and establish their franchise in the long run, while ensuring adequate risk-based pricing.
Aligning the interests of the sales force to the long term-goal of the insurance company is also
critical to avoid mis-selling to customers, which can lead to brand erosion in the long term. In
an evolving market like India, product development and pricing are critical attributes although
product differentiation, being easily replicable, is not a sustainable attribute in the insurance
business .
COMPANY PROFILE :
SBI Life is a joint venture between State Bank of India (SBI) and BNP Paribas Assurance
of France, with SBI holding 74% stake and BNP Paribas Assurance holding the remainder. In
the current financial year (April-November 2008), SBI Life is the second largest private sector
company in India next only to ICICI Prudential with a 7.3% market share of New Business
Premium and a 9.7% market share of NBAPE. SBI is the largest bank in India and has around
14,500 branches across India together with its affiliates. BNP Paribas Assurance is the fourth
largest life insurance company in France and is a worldwide leader in Creditor insurance
products, offering protection to over 50 million clients. BNP Paribas Assurance operates in 42
countries mainly through the bank assurance and partnership model. BNP Paribas Assurance is
the insurance arm of BNP Paribas Bank.
BUSINES RISK PROFILE :
Market Position & Brand SBI Life has recorded strong growth over the last three years
to attain a market share of 6.2% in 2007-08 (based on NBAPE). SBI Life is the fourth largest
life insurance company in India, the top three being LIC (48.1%), ICICI Prudential (13.7%)
and Bajaj Allianz (10.3%) based on NBAPE. . SBI Life grew at a CAGR of 123in the period
from 2004 to 2008 to become the third largest private life insurance company in India. SBI Life
increased its market share to 6.2% in 2007-08 from 1.1% in 2004-05 based on NBAPE. SBI Life
enjoys one of the strongest brand names in the industry due to its strong parent franchise. Its
other partner, BNP Paribas Assurance, is the fourth largest life insurance company in France
and is a worldwide leader in Creditor insurance products, offering protection to over 50 million
clients. The joint venture also benefits from the experience of BNP Paribas Assurance in
other markets, particularly in areas like product development, systems, risk management and
distribution.
DISTRIBUTION:
SBI Life has a multi-distribution model encompassing Bancassurance, Agency and Group
corporate. SBI Life extensively leverages the SBI group as a platform for cross-selling insurance
products along with its numerous banking product packages such as housing loan and personal
loan. SBI‟s access to over 100 million accounts across the country through approximately
14,500 branches (including regional rural banks) provides an established platform for insurance
penetration across urban, semi-urban and rural towns in the country. SBI Life deploys the
traditional Bancassurance model whereby the life insurance agents are existing employees of
SBI who are trained as per IRDA norms.
This results in substantial cost reduction for SBI Life. Agency Channel, which
comprises more than 55,000 insurance advisors, offers door-to-door insurance solutions to
customers. The number of Sales Offices has increased to around 462 in December 2008 from
187 in 2008. While Bancassurance generated 38.4% of the total business in 2007-08, agency
business contributed 48.3% during the same period. The contribution of Agency business
has increased to 48.3% in 2007-08 from 34.3% in 2005-06 since agency force has grown at
a much faster rate than other channels. thefirst Indian company to be included in the top 10
global insurance companies. Overall, the channel productivity of SBI Life is amongst the best
in the industry with average ticket size2 of around Rs. 40,000, further contributing to its lower
operating costs .
All of these factors have enabled SBI to have one of the lowest cost structures in the
industry. SBI Life‟s total expense structure3 as percent to premium stood at 15.2% in 2007-08
and was much lower than many other private sector companies. Unlike product features, which
can be easily replicated by competition, thereby eroding any competitive advantage, the favourable
cost structure of SBI Life is a sustainable competitive advantage. Agency force is considered
to be a more reliable channel in the long term since the company has direct control over its
agents. ICRA notes that SBI Life has a low risk of losing control over bancassurance channel
and revenues since its parent is a bank.
PRODUCT PROFILE :
SBI Life maintains a relatively diversified product mix as compared to its close peers
even though the contribution from ULIPs has increased substantially over the past few years.
SBI Life is also shifting its focus from single premium policies to regular premium policies,
with regular premium contribution having risen to 74% in 2007-08 from44% in 2004-05. (Note:
regular premium = FYP+FYFP+Regular) The group business has seen its contribution decline
in recent years; nevertheless, it remains significant with a 22% contribution in terms of total
premium in 2007-08. The company‟s group business exposure has always been the highest
amongst its close peers, driven primarily by policies offered to SBI‟s employees and group
credit business. The growth of the company was mainly driven by ULIPs.
Although non-existent in 2005, ULIPs contributed to 73% of the total premiums in 2008. This
has been in line with the overall market trend. In ULIPs, the investment risk is borne by the
policyholder and SBI Life has no exposure to linked policies with capital guarantees. However,
any prolonged downturn in the equity markets can have a serious impact on ULIP sales and
hence overall growth. This in turn could affect the profitability of all insurance companies
including SBI Life in the future.
SBI Life‟s persistency ratio4 stood at 50% in 2007-08, mainly contributed by linked policies. As
per IRDA, linked policies issued after June 2006 have a minimum term of five years and lock-
in period of three years. If the premium is discontinued within the first three years, the life cover
ceases to exist with immediate effect; and SBI Life‟s policy liabilities are reduced to that extent.
ICRA notes that surrender on such policies may start after the end of lock-in period of three
years (if the policy is revived within the period) or at the end of the period allowed for revival
(if the policy is not revived). Thus, the effective renewal/ persistency of these policies would
be known only a few years hence. However, SBI Life‟s management is proactively working on
steps to improve its persistency. and renewal rates through close monitoring and training of its
distribution network and product portfolio.
FINANCIAL RISK PROFILE:
PROBABILITY :
Life Insurance industry is capital-intensive and insurers are required to inject capital
during initial growth periods at frequent intervals to achieve growth in premium income. A life
insurer typically requires minimum of 5-7 years to break even or even more depending on the
growth in premiums. Among Indian private life insurers during the period from 2003 to 2007, all
of them have incurred underwriting losses with the exception of Bajaj Allianz in 2006-07. These
losses are, however, expected, the business being still in its initial growth phase and hence
incurring corresponding business costs. SBI Life has also been incurring underwriting losses,
although it has reported net profits since 2006 and is the first private life insurance company
to do so. Despite high growth, its underwriting losses have come down in the last three years
primarily due to favorable expense structure. In 2008, linked policies and group credit business
recorded underwriting profits as well.
Asset Quality For a life insurer, it is very important to generate high returns while
maintaining asset quality to avoid credit risk. SBI Life has adequate systems and processes in
place to ensure investments are made keeping in mind the ALM needs and return requirements
in each product category. The investment risk is borne by the policyholder for linked business
and by the insurance company in a non-linked portfolio.
As on March 2008, approximately 52% of the assets are held in Government securities
with high safety for non-linked business while approximately 17% of the assets are invested in
infrastructure and social sector. At the same time, the exposure of SBI Life to equity is low at
6% of the total assets, reflecting a conservative investment policy. SBI Life has also invested
approximately 9% of the assets in “AAA” and “AA” rated bonds and has 1% in high quality
liquid mutual funds. Overall, the investments are invested in safe and liquid assets with low
exposure to equity and other risky assets. Persistency defined as current year renewal premium
divided by sum of last year, first year and renewal premium. Non-participating group retirement
policy premiums are excluded from persistency calculations as premiums may be inflated for a
particular yearduetoadditioofnew corporate account.
New account premium will include current year premium plus past accumulated funds/corpus
that are one-time in nature. Asset Liability Management & Liquidity ALM holds paramount
importance for non-linked portfolio, wherein the risk is borne by the company. SBI Life has
set up a committee to review any duration (interest rate) or cash flow mismatch for its non-
linked portfolio. SBI Life is also investing on strengthening its ALM systems in line with its future
requirements as it scales up its operations further. SBI Life also enjoys strong liquidity due
to parent support for funding requirements. It also holds approximately 23% of the total non-
linked policyholder investments as short term investments with a maturity profile of less than 12
months to meet short-term liquid needs.
Life Insurance Industry in India is regulated by IRDA with guidelines for key areas like
product approvals under file and use system, accounting treatment, Investment management
and importantly reserving and solvency.
assumptions into the future for various parameters such as morbidity, expense, mortality,
interest rate etc.
In estimating reserve, the insurer has to make
These estimates are based on the insurer‟s best estimate expectations, which
is based on their own portfolio or industry or similar other experience and are vetted by an
Actuary and submitted to IRDA. IRDA further stipulates that the best estimate assumptions shall
be adjusted by an appropriate Margin for Adverse Deviation (MAD), the level of MAD being
dependent on the degree of confidence in the expected level. The purpose of MAD is to build a
safeguard against mis-estimation of the best estimate or adverse fluctuations around the best
estimate. However MAD does not cover for volatility and catastrophe risks. Therefore, insurers
have to set aside separate excess assets, known as required solvency margin, to protect the
policyholders‟ financial interests should such situation arise.
IRDA specified existing method for calculating Required solvency margin5 (RSM) is based
on the factors related to mathematical reserves and sum at risk, specified for different lines
of business. The method has simplicity as its advantage; however it does not specifically
recognize the size of portfolio, type of business, operational risk, and risk management
practices such as reinsurance, underwriting, asset and liability management etc. Available
Solvency margin (ASM) is excess of total assets over liabilities. Solvency ratio of insurer is
defined as the ratio of ASM over RSM. As per IRDA norms, insurers have to maintain solvency
ratio of at least 1.50.
IRDA approves products introduced by life insurance players under file and use system
after ascertaining the feasibility of various estimates including underwriting norms, expense
loadings, tenure and profitability. IRDA has also put in place various checks and disclosure
norms to be made to policyholders to prevent misuse and mis-selling. While for policyholder
investments for non-linked business, IRDA has specified various categories of investments
with focus on maintaining low credit risk for the portfolio. ICRA believes, since Life Insurance
industry in India is in nascent stages of growth, strong regulatory framework and oversight
provide cushion in protecting the interest of policyholder and enhance transparency & corporate
governance.
NOTE ON LIFE INSURANCE:
The Indian life insurance business was dominated by the Life Insurance Corporation
of India limited for quite a long period of time. With the deregulation of the insurance sector in
2000, a number of private companies entered into the life insurance business. Most of the new
entrants were essentially alliances between established Indian business houses and global
insurance companies with proven life insurance experience.
As of 2008, there are 18 private life insurers operating in India. India‟s life penetration
rate – measured by life premiums as a percentage of GDP -- was 4.0% in 2008. This is much
higher than other emerging economies like China but lower than industrialized and developed
peers in Asia Pac like Japan and Taiwan. In 2007, India‟s life insurance total premium equaled
US$ 47 bn and it accounted for around 16.1% of the total Asia pacific life market excluding
Japan. Also, India‟s global market share increased to 1.7% in 2007 from 0.7% in 1997. At
present, the Indian life insurance industry is the fourth largest in Asia Pacific excluding Japan.
Life Insurance market (New Business Premium) in India has grown at a healthy rate of 36%
during 2003-08. During 2006-07, a very favorable period for life insurance business, growth
peaked to 95% due to strong performance of ULIP products before moderating to 31% in 2007-
08.
ULIPs have gained popularity in recent years driven by the boom in capital markets.
Approximately 60% of new business premiums in 2006-07 came from ULIPs, with some private
sector companies deriving more than 90% of their premium income from this high-growth
product segment. However, the downturn in equity markets in recent periods has begun to
affect ULIP sales and the overall new business premium growth rate. For the period from March
to November 2008, the new business premium for the life insurance industry grew marginally
by 1.4% over the corresponding period previous year. The decline in growth was entirely
contributed by LIC, which witnessed a negative growth of 14.2% while private sector companies
maintained a growth of 31.5% during the same period. With the minimum three-year lock-in
period imposed on ULIPs, massive surrenders are unlikely but bear markets (and lower NAVs)
would lead to lower new sales.
LIC continues to dictate the Indian life market with a 37.7% market share based on
NBAPE April-November 2008. However, private sector companies are continuously gaining
market share on the back of innovative products, creative marketing and aggressive
distribution. Among private sector companies, ICICI Prudential is the market leader (NBAPE)
with a 13.5% market share while SBI Life and Bajaj Allianz follow with 9.7% and 8.4%,
respectively. SBI Life has shown much stronger growth than ICICI Prudential and Bajaj Allianz in
recent years to achieve the second position. The top three players account for approximately
50% of the total private sector new business premium. The long-term prospects for the Indian
life insurance industry remain robust owing to India‟s growing middle class and an increasing
insurance awareness in the country. In ICRA„s view, the key long-term drivers of growth in the
Indian life insurance industry are: Robust economic growth driven by structural factors
Changing demographics like growing young population, rising disposable incomes and
trends towards nuclear families Micro growth drivers like expanding distribution, emergence ofalternate distribution channels and a wide product basket serving customer needs
CHAPTER-lll
RESEARCH METHODOLOGY
The core concept underlying research is its methodology. The methodology controls
the study, dictates the acquisition of the data, and arranges them in logical relationships, sets up
a means of refining the raw data, contrives an approach so that the meanings that lie below the
surface of those data become manifest, and finally issue a conclusion or series of conclusions
that lead to an expansion of knowledge. The entire process is a unified effort as well as an
appreciation of its component parts.
According to J.W.B. est, “Research is considered to be formal, systematic, intensive
process of carrying on the scientific method of analysis. It involves a more systematic structure
of investigation usually resulting in some sort of formal record of procedures and report of result
or conclusions.”
According to P.M.Cook, “Research is an honest, exhaustive, intelligent searching for
facts and their meanings or implications with reference to a given problem. It is the process of
arriving at dependable solutions to problem through planned and systematic collection, analysis
and interpretation of data. The best research is that which is reliable, verifiable and exhaustive
so that it provides information in which we have confidence.”
RESEARCH STATEMENT :
The research statement studied is entitled, “A comparative study of Life Insurance Corporation
of India and Private Life Insurance Companies in India”. The present study focuses on the
analysis of the performance of public 52 and all private life insurance companies in India with
the help of mean, percentage, ratios, ANOVA, Data Envelopment Analysis and linear trend.
RESEARCH DESIGN :
A Research design is a plan of action to be carried out in connection with a research project. It
is the conceptual structure within which research is conducted and it constitutes the blue print
for the collection, measurement and analysis of data. It is the specification of methods and
procedures for acquiring the information needed for solving the problem. Decisions regarding
what, where, when, how much, by what means concerning an inquiry or a research study
constitute a research design.
OBJECTIVES OF THE STUDY:
The following are the objectives of the study:
•
To know the pension plan concept in SBI Life insurance
•
To know the techniques involved in the transaction of pension plan in the SBI Life
Insurance.
•
To know the mechanisms involved in the transaction of pension plan in SBI Life
insurance .
•
To know the annuity options of pension plan in SBI Life insurance .
•
To evaluate the pension sector in SBI Life insurance.
•
To draw suitable conclusions wherever necessary.
SCOPE OF THE STUDY:-
The following are the scope of the study:
1. It revels only the pension plan of life insurance.
2. The study is restricted to the SBI Life insurance only.
LIMITATIONS OF THE STUDY:-
1. This study has been conducted to understand only pension plan ofinsurance
2. Data collection was strictly confined to secondary data.
3. Detailed study of topic was not possible due to limited size of the
4. Study is limited to project duration.
5. As the bank insurance maintains some secrecy, the accurate interpretations
drawn.
SBI Life
project
were not
SOURCE OF DATA COLLECTION
The methodology adopted in this study is mostly on secondary data collection
1. Information from internet.
2. By referring the text book, stock market related book (journals & magazines).
3. Information provided by the office of SBI life .
I,e.
COLLECTION OF THE DATA
The collection of information done by two sources they are as follows:
Ø PRIMARY DATA
Ø SECONDARY DATA
PRIMARY DATA:
Primary data is the information collected directly without any reference in this study it
has mainly through interviews with concerned managers and staff either individually or
collectively some of the information had been verified or supplemented with personal
observation.
1. the data collected from personal observation
2. the data collected through interviews with concerened managers
SECONADARY DATA:
Secondary data collected from already published books secondary data helps researchers
to save time while primary researchers takes a considerable amount of the time in the form
of collecting and analyzing the data secondary data offers ready made solutions.
•
•
•
•
•
The required information collected from insurance management text books.
The data required for the study was mainly based on the secondary data.
The required information was collected from the annual report of the SBI.
The related data was obtained from he printed and published financial statement
of the company.
The data was collection web site (www.sbi life.co.in).
CHAPTER-IV
DATA ANALYSIS
SBI Life Saral Shield Plan Review
DATA ANALYSIS
Saral Shield
SBI Life Saral Shield Plan is a term life insurance plan which offers financial protection to
the dependents in case of untimely demise. You pay relatively small premium to the insurer
for the comprehensive cover and get your family secured. If policyholder passes away, Sum
Assured will be given to the nominee. Since SBI Life Saral Shield is a pure risk plan, there are
no survival benefits.
SBI Life Saral Shield Plan:
SBI Life Saral Shield term life insurance plan is for any individual who is at least 18
years or below 60 years. Saral Shield policy term is minimum of 5 years and maximum of 30
years. If you are 50 years old the maximum term you can opt for is 15 years. That is because
Saral Shield plan maturity age cannot exceed 65 years.
How Much Cover: The minimum Sum Assured is Rs 7.5 lacs. Saral Shield allows you to take
cover as high as Rs 24 lacs. However you have to meet underwriter’s requirement to get the
cover you want, which depends on your annual salary, age etc.
So how much cover should you get?
Rule of Thumb: The typical cover should be ten times your annual income.
Summarized Table
Entry Age
Maturity Age
Sum Assured
Policy Term
Premium Pay Term
Premium Mode
18 Years-60 Years
Maximum – 65 years
Rs
750,000-
underwriting)
5 Years- 30 years
Same as policy term, Single Premium
Yearly, Half-yearly, Quarterly, Monthly
Rs
2,400,000(
subject
to
Death Benefit:
There are three options for the customer
Level Term Assurance
The predetermined Sum Assured is paid to the beneficiary who could be your parents, wife, son
or daughter.
Decreasing Term Assurance (Loan Protection)
This option can be taken if you have taken any loan. The Sum Assured will be equivalent to
the outstanding loan amount. As you keep paying the loan amount, the Sum Assured will keep
decreasing as well.
Decreasing Term Assurance (Family Income Protection)
On demise of life insured, monthly payout will be paid to the family members till the end of
the policy term. The monthly amount will be equal to Sum Assured divided by policy term (in
months).
Riders:
Accidental death benefit and Accidental total & permanent disability are the riders available with
Saral Shield.
Sum Assured Rebate:
A discount on premium will be provided if the Sum Assured is equal or more than INR
1,500,000.
Tax Benefits:
Section 80C, 10 (10D) of the Income Tax Act, 1961 are applicable.
Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be
deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.
Consider these Scenarios:
Scenario1: If he opts for Level term Assurance with Sum Assured equal to Rs 20
lacs, he would have to pay premium of Rs 12,096. If anything happens to him during the policy
term, Sum Assured will be paid to the nominees.
Scenario 2: Mr. Verma takes home loan with interest rate of 12%. He opts for Sum Assured
of Rs 20 lacs. The single premium amount would be Rs 106,789. If anything happens to him
during the policy term, the outsanding loan amount will be covered.
Scenario 3: Mr. Verma takes family income protection option with Sum Assured of 20 lacs; the
single premium amount would be Rs 56,335. On death of Mr. Verma, monthly payouts will be
paid to the beneficiary for the remaining term.
Scenario 4: Policy is in grace period and Mr. Verma dies, Sum Assured minus renewal premium
will be paid.
Scenario 5: Policy lapses on the 22nd year, Mr. Verma dies, nothing will be paid. If policy lapses,
there is option to revive it within 30 days from date of renewal.
What Else?
How to buy: Policybazaar representatives will help you through the purchase process.
Free Look Period: Saral Shield plan can be cancelled within 15 days of receiving the policy
contract. A written application can be submitted to any branch for the same. The premium will
be paid back minus some charges like stamp duty, medical reports.
Grace period: Saral Shield can be paid within 30 days from the date of renewal
and 15 days for monthly mode. Policy terms will remain unchanged during grace period.
However in case of death during grace period, renewal premium will be deducted from Sum
Assured payable. After 30 days, if the renewal premium is not paid the policy will cease to exist.
Sum Assured: The policyholder cannot change the sum assured of Saral Shield once taken.
However he can opt for another term plan as per his needs.
Reinstatement: Saral Shield can be revived within 3 years from the premium due date.
However all outstanding premiums are to be paid.
Maturity: There are no maturity benefits in SBI Saral Shield plan as it’s a pure term life
insurance plan.
Payment Method: Credit/debit card, cheque are accepted by IDBI Federal.
Exclusion: During the first policy year or the year of reinstatement of policy, if policyholder
commits suicide then Sum Assured will not be paid.
Death Claim: The nominee can request for the death claim (Sum Assured) after filling claim
forms along with submitting list of documents which will prove authenticity of the claim.
Key Features of SBI Life Saral Shield:
• Hassle-free, suitable and easy issuance.
• Complete Financial Security at truly lower costs.
• Wide varieties of plan options to give you complete freedom from your liabilities.
Attractive large sum assured rebates.
• Enhance your protection by availing two riders- Accidental Death Benefit Rider and Accidental
Total and Permanent Disability Rider.
• Tax benefits as per prevailing norms under the Income Tax Act, 1961
Product Snapshot:
Age at Entry
Age at Maturity
Plan Options
Sum Assured(x 50,000/-)
Policy Term
Min: 18 years
Max: 65 years
Level Term Assurance
Decreasing Term Assurance (Loan Protection)
Decreasing Term Assurance (Family Income Protection)
Min: Rs. 7,50,000 Max: Rs. 24,00,000
Min: 5 years
Max:
For Level Term Assurance and Decreasing Term Assurance (Family
Income Protection) – 30 years
For Decreasing Term Assurance (Loan Protection) – Equal to the
Max: 60 years
Premium Paying Term
Premium Modes
Min Premium Amounts
outstanding loan term subject to maximum of 30 years
Same as policy term
For Level Term Assurance:
Single Premium (SP), or Regular Premium(RP) (Yearly / Half-yearly
/ Quarterly / Monthly#)
For Decreasing Term Insurance (Loan Protection) & Decreasing
Term Insurance (Family Income Protection) : Single Premium
Regular Premium:
Yearly
Half-yearly Rs. 1,100/-
Quarterly
Monthly
Rs. 10,000/-
Rs. 2,000/-
Rs.
Rs.
600/-
250/-Single Premium:
All the references to age are age as on last birthday.
#For
convenience, monthly mode of premium, is payable through Electronic Clearing System
(ECS), Salary Savings Scheme or Standing Instructions (where payment is made either by
direct debit of bank account or credit card).
Instant Premium Reckoner
Age of
For SA - Rs. 10 Lakhs
Life
Policy Term (in years)/ Premium (in Policy Term (in years)/ Premium (in
Assured Rs)
(years) 10
25
2,052
30
2,197
35
2,778
40
3,726
45
5,421
For SA - Rs. 20 Lakhs
15
20
2,052
2,188
2,409
2,711
3,204
3,775
4,483
5,350
6,556
7,866
Rs)
25
10
2,413
3,442
3,132
3,731
4,459
4,893
6,379
6,791
NA
10,179
15
3,442
4,157
5,745
8,304
12,449
20
25
3,713
4,163
4,759
5,602
6,888
8,255
10,038
12,096
15,070
NA
Note: he above annual level term assurance premiums are for a standard, healthy male life and
are inclusive of service tax as well as high sum assured rebate, wherever applicable.
PROJECT ANALYSIS
SARAL SHIELD
Introduction:
SBI Life - Saral Shield is a traditional non-participating pure term plan, At a
affordable cost, Saral Shield provides cover for your family and ensures that a
proper safety net is created. Thus, it guarantees that there will be absolutely no
compromise on your dreams and ambitions for your loved ones, at all times.
Isn’t it great? So, get the Shield advantage now!!
KEY FEATURES
•
•
•
•
•
Hassle-free, convenient and easy issuance.
Financial Security.
Wide varieties of plan options to give you freedom from your liabilities.
Large sum assured rebates.
Enhance your protection by availing two riders- Accidental Death Benefit Rider
