A MINOR PROJECT REPORT ON

HDFC Standard Life Insurance Company Limited

SUBMITTED IN PARTIAL FULFILMENT OF

BACHELOR OF BUSINESS ADMINISTRATION
(BANKING & INSURANCE 3rd SEM.)

SUBMITTED TO:
MS.ANURADHA SHARMA

SUBMITTED BY
VARUN VERMA
09612401811

DELHI INSTITUTE OF RURAL DEVELOPMENT

(AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA
UNIVERSITY, DELHI)

STUDENT UNDERTAKING

This is to certify that I VARUN VERMA had completed the project tittled
in (HDFC) under the guidance of Mr/MsAnuradha Sharma in the prtial fulfillment
of the requirement for the awardof degree of BBA from Delhi Institute of Rural
Development ( affiliated to G.G.S.I.P. university)New Delhi. This is an original piece of
work and I had neither copied nor submitted it earlier elsewhere.
Shubham agarwal
BBA(b&i)

Dated-

Certificate from Guide

This is to certify that the project tittled HDFC LIFE INSURANCE

COMPANY LTD. is an academic work done by VARUN VERMA submitted in the
partial fulfillment of the requirement for the award of the degree of BBA from Delhi
Institute of Rural Development (affiliated to G.G.S.I.P. university), New Delhi under my
guidance and direction .To the best of my knowledge and belief the data and information
presented by him/her in the project has not been submitted earlier.

Miss Anuradha Sharma

lecturer

EXECUTIVE SUMMARY

HDFC Standard Life insurance is the oldest life insurance company in the
world. It is the largest insurer in the UK and is the 28 th largest company in the
world. In India, the company is marketing life insurance products and unit
linked investment plans. From my research at HDFC SLIC, I found that the
company has a lot of competition from other private insurers like ICICI, Aviva,
Birla Sun Life and Tata AIG. It also faces competition from LIC. To compete
effectively HDFC SLIC could launch cheaper and more reasonable products
with small premiums and short policy terms (the number of years premium is
to be paid). The ideal premium would be between Rs. 5000 Rs. 25000 and
an ideal policy term would be 10 20 years.
HDFC must advertise regularly and create brand value for its products and
services. Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use
television advertisements to promote their products. The Indian consumer
has a false perception about insurance they feel that it would not benefit
them if they do not live through the policy term. Nowadays however, most
policies are unit linked plans where a customer is benefited even if their
death does not occur during the policy term. This message should be
conveyed to potential customers so that they readily invest in insurance.
Family responsibilities and high returns are the two main reasons people
invest in insurance. Optimum returns of 16 20 % must be provided to
consumers to keep them interested in purchasing insurance.
On the whole HDFC standard life insurance is a good place to work at. Every
new recruit is provided with extensive training on unit linked funds, financial
instruments and the products of HDFC. This training enables an advisor/sales
manager to market the policies better. HDFC was ranked 13 in the Best
Places to Work survey. The company should try to create awareness about
itself in India. In the global market it is already very popular. With an
improvement in the sales techniques used, a fair bit of advertising and
modifications to the existing product portfolio, HDFC would be all set to
capture the insurance market in India as it has around the globe.

CONTENTS

PAGE NO.

Executive summary

Acknowledgment

Introduction to insurance

Research design

11

Company profile of HDFCSLIC

17

Company profile of TATA AIG LIC

35

Other competitors

39

POPS & PODS

45

Competitive analysis

50

Marketing problems

55

Analysis & interpretation

58

Future line of research

75

Conclusion

77

References

79

Appendix

80

ACKNOWLEDGMENT
I would like to thank my project guide Mr. B. K. Panda, Sales Development
Manager HDFC Standard Life Insurance, New Delhi for guiding me through my
summer internship and research project. His encouragement, time and effort
are greatly appreciated.
I would like to thank Ms. . for supporting me during this project
and providing me an opportunity to learn outside the class room. It was a
truly wonderful learning experience.
I would like to dedicate this project to my parents. Without their help and
constant support this project would not have been possible.
Lastly I would like to thank Mr director of my colleage.

CHAPTER I
INDIAN INSURANCE
INDUSTRY
AN OVERVIE

THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the largest number of life insurance policies in force in the world,
Insurance happens to be a mega opportunity in India. Its a business growing
at the rate of 15-20 per cent annually and presently is of the order of Rs
1560.41 billion (for the financial year 2006 2007). Together with banking
services, it adds about 7% to the countrys Gross Domestic Product (GDP).
The gross premium collection is nearly 2% of GDP and funds available with
LIC for investments are 8% of the GDP.
Even so nearly 65% of the Indian population is without life insurance cover
while health insurance and non-life insurance continues to be below
international standards. A large part of our population is also subject to weak
social security and pension systems with hardly any old age income security.
This in itself is an indicator that growth potential for the insurance sector in
India is immense.
A well-developed and evolved insurance sector is needed for economic
development as it provides long term funds for infrastructure development
and strengthens the risk taking ability of individuals. It is estimated that over
the next ten years India would require investments of the order of one trillion
US dollars. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain the economic growth of the country.
(Source: www.indiacore.com)

HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was
conceived as a means to provide for English Widows. Interestingly in those
days a higher premium was charged for Indian lives than the non - Indian
lives, as Indian lives were considered more risky to cover. The Bombay Mutual
Life Insurance Society started its business in 1870. It was the first company
to charge the same premium for both Indian and non-Indian lives.
The Oriental Assurance Company was established in 1880. The General
insurance business in India, on the other hand, can trace its roots to Triton
Insurance Company Limited, the first general insurance company established
in the year 1850 in Calcutta by the British. Till the end of the nineteenth
century insurance business was almost entirely in the hands of overseas
companies.
Insurance regulation formally began in India with the passing of the Life
Insurance Companies Act of 1912 and the Provident Fund Act of 1912.
Several frauds during the 1920's and 1930's sullied insurance business in
India. By 1938 there were 176 insurance companies.
The first comprehensive legislation was introduced with the Insurance Act of
1938 that provided strict State Control over the insurance business. The
insurance business grew at a faster pace after independence. Indian
companies strengthened their hold on this business but despite the growth
that was witnessed, insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life
insurers and provident societies under one nationalized monopoly corporation
and Life Insurance Corporation (LIC) was born. Nationalization was justified on
the grounds that it would create the much needed funds for rapid
industrialization. This was in conformity with the Government's chosen path
of State led planning and development.

The non-life insurance business continued to thrive with the private sector till
1972. Their operations were restricted to organized trade and industry in
large cities. The general insurance industry was nationalized in 1972. With
this, nearly 107 insurers were amalgamated and grouped into four
companies- National Insurance Company, New India Assurance Company,
Oriental Insurance Company and United India Insurance Company. These
were subsidiaries of the General Insurance Company (GIC).

KEY MILESTONES
1912: The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.
1928:

The

Indian

Insurance

Companies Act enacted

to enable the

government to collect statistical information about both life and non-life

insurance businesses.
1938: Earlier legislation consolidated and amended by the Insurance Act with
the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers along with provident societies were
taken over by the central government and nationalized. LIC was formed by an
Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from
the Government of India.

INDUSTRY REFORMS
Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a
statutory body in April 2000 has fastidiously stuck to its schedule of framing
regulations and registering the private sector insurance companies. Since
being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations.
The other decision taken simultaneously to provide the supporting systems to
the insurance sector and in particular the life insurance companies was the
launch of the IRDA online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured
that the insurance companies would have a trained workforce of insurance
agents in place to sell their products.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive 47.38%, with
premium income at Rs. 1560.41 billion during the fiscal year 2006-2007.
Though the total volume of LIC's business increased in the last fiscal year
(2006-2007) compared to the previous one, its market share came down from
85.75% to 81.91%.
The 17 private insurers increased their market share from about 15% to
about 19% in a year's time. The figures for the first two months of the fiscal
year 2007-08 also speak of the growing share of the private insurers. The

share of LIC for this period has further come down to 75 percent, while the
private players have grabbed over 24 percent.
With the opening up of the insurance industry in India many foreign players
have entered the market. The restriction on these companies is that they are
not allowed to have more than a 26% stake in a companys ownership.
Since the opening up of the insurance sector in 1999, foreign investments of
Rs. 8.7 billion have poured into the Indian market and 19 private life
insurance companies have been granted licenses.
Innovative products, smart marketing, and aggressive distribution have
enabled fledgling private insurance companies to sign up Indian customers
faster than anyone expected. Indians, who had always seen life insurance as
a tax saving device, are now suddenly turning to the private sector and
snapping up the new innovative products on offer. Some of these products
include investment plans with insurance and good returns (unit linked plans),
multi purpose insurance plans, pension plans, child plans and money back
plans. (www.wikipedia.com)

CHAPTER II
RESEARCH DESIGN

RESEARCH DESIGN
INTRODUCTION
A Research Design is the framework or plan for a study which is used as a
guide in collecting and analyzing the data collected. It is the blue print that is
followed in completing the study. The basic objective of research cannot be
attained without a proper research design. It specifies the methods and
procedures for acquiring the information needed to conduct the research
effectively. It is the overall operational pattern of the project that stipulates
what information needs to be collected, from which sources and by what
methods.

TITLE OF THE STUDY

To Compare the products of HDFC Standard Life Insurance Company
Limited and Tata AIG Life Insurance Company Limited for HDFC
Standard Life Insurance Company Ltd.

STATEMENT OF THE PROBLEM

This study was undertaken to identify which type of insurance plans HDFC
SLIC should market to beat Tata AIG LIC in India. A survey was undertaken to
understand the preferences of Indian consumers with respect to insurance.
While marketing policies the sole duty of an advisor/ agent is to provide
insurance plans as per customer requirements.

In effect plans (insurance products) should be flexible to suit individual

requirements. This research tries to analyze some key factors which influence
the purchase of insurance like the term of the policy, the type of company,
the amount of annual premium payable (capacity and willingness to spend),
risk

taking

ability

and

the

influence

of

advertising.

Solutions

and

recommendations are made based on qualitative and quantitative analysis of

the data.

OBJECTIVES OF THE STUDY

To analysis the product details of HDFC Standard life Insurance
Company limited and Tata AIG life Insurance Company Limited.
To find Points of Parity and Points of Difference of HDFC Standard
Life Insurance Company Limited and Tata AIG Life Insurance
Company Limited.
To find out factors that influence customers to purchase insurance
policies and give suggestions for further improvement.

RESEARCH METHODOLOGY

TYPE OF DATA COLLECTED

There are two types of data used. They are primary and secondary data.
Primary data is defined as data that is collected from original sources for a
specific purpose. Secondary data is data collected from indirect sources.
(Source: Research Methodology, By C. R. Kothari)
PRIMARY SOURCES
These include the survey or questionnaire method, telephonic interview as
well as the personal interview methods of data collection.

SECONDARY SOURCES
These include books, the internet, company brochures, product brochures,
the company website, competitors websites etc, newspaper articles etc.

SAMPLING
Sampling refers to the method of selecting a sample from a given universe
with a view to draw conclusions about that universe. A sample is a
representative of the universe selected for study.
SAMPLE SIZE
The sample size for the survey conducted was 270 respondents. This
sample size was taken on 95% confidence level and 6 significant level. Data
universe for this sample is 10,00,000 which is approx population of Jodhpur
excluding people below age of 18 years.

SAMPLING TECHNIQUE
Random sampling technique was used in the survey conducted.

PLAN OF ANALYSIS
Tables were used for the analysis of the collected data. The data is also neatly
presented with the help of statistical tools such as graphs and pie charts.
Percentages and averages have also been used to represent data clearly and
effectively.

STUDY AREA

The samples referred to were residing in Jodhpur City. The areas covered were
Shastri Nagar, Sardarpura, Masuriya, Subhash Nagar, City Area and Kamla
Nehru Nagar.

OVERVIEW OF CHAPTER SCHEME

CHAPTER 1:
Introduction to insurance - An overview of the industry in India,
history, key milestones, reforms in the industry, present scenario in India.

CHAPTER 2:
Research Design - Introduction, title of the study, statement of the
problem, objectives of the study, research methodology, sampling, plan of
analysis and study area.

CHAPTER 3:
Company profile of HDFC SLIC Introduction of HDFC SLIC, products
and services, vision and core values, human resource, organizational
structure, introduction to unit linked funds, national & international
presence of the organization.

CHAPTER 4:
Company profile of Tata AIG Introduction of Tata AIG, products and
services, vision and core values. The advantages of investing in HDFC SLIC
compared to other financial instruments.
CHAPTER 5:

COMPETITORS Introduction about other competitors in the market.

CHAPTER 6:
Points of Parity and Points of Difference between HDFC SLIC and
Tata AIG LIC Comparison between different plans, charges, fees,
deductions and riders available with HDFC SLIC and Tata AIG LIC
CHAPTER 7:
Competitive analysis Information about the plans offered by LIC and
other private insurers in India. Comparisons between the plans to find the
most popular and beneficial plans which HDFC SLIC can incorporate into
their product portfolio.

CHAPTER 8:
Marketing problems - The techniques used to market insurance and
their

advantages

and

disadvantages

along

with

suggestions

for

improvement.
CHAPTER 9:
Analysis and Interpretation A survey on factors that influence people
to purchase Life Insurance Policy.
CHAPTER 10:
Problems requiring more research Future line of work
CHAPTER 11:
Conclusion
References
Appendices

CHAPTER III

COMPANY PROFILE
OF

HDFC STANDARD
LIFE INSURANCE
COMPANY LTD.

HDFC STANDARD LIFE INSURANCE COMPANY

LIMITED
INTRODUCTION
HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has
since emerged as the largest residential mortgage finance institution in the
country. The corporation has had a series of share issues raising its capital to
Rs. 119 Crores. The gross premium income for the year ending March 31,
2007 stood at Rs. 2,856 Crores and new business premium income at Rs.
1,624 Crores. The company has covered over 8,77,000 lives year ending
March 31, 2007.

HDFC operates through almost 450 locations throughout the country with its
corporate head quarters in Mumbai, India. HDFC also has an International
Office in Dubai, UAE with service associates in Kuwait, Oman and Qatar. HDFC
is the largest housing company in India for the last 27 years.

SNAPSHOT-I

Incorporated in 1977 as the first specialized Mortgage Company in

India.

Almost 90% of initial shareholding in the hands of domestic institutes

and retail investors. Current 77% of shares held by foreign institutional
investors.

Besides the core business of mortgage HDFC has evolved into a

financial conglomerate with holdings In:
HDFC Standard Life insurance Company- HDFC holds 78.07 %.
HDFC Asset Management Company HDFC holds 50.1%
HDFC Bank- HDFC holds 22.25%.
Intelenet Global (Business Process Outsourcing) HDFC holds 50%.

 HDFC Chubb General Insurance Company HDFC holds 74%.

SNAPSHOT-II

Loan Approvals

Rs. 805 billion.

(up to Dec 2007)

(US $ 18.30 bn.)

Loan Disbursements

Rs.669 billion

(up to Dec. 2007)

(US $ 15.20 bn)

Housing Units Financed

Distribution

2.5 million.

Offices

181

Outreach Programs

90

KEY PLAYERS
Mr. Deepak S Parekh is the Chairman of the Company. He is also the
Executive Chairman of Housing Development Finance Corporation Limited
(HDFC Limited). He joined HDFC Limited in a senior management position in
1978. He was inducted as a whole-time director of HDFC Limited in 1985 and
was appointed as its Executive Chairman in 1993. He is the Chief Executive
Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered
Accountants (England & Wales).

Mr. Deepak M Satwalekar is the Managing Director and CEO of the

Company since November, 2000. Prior to this, he was the Managing Director
of HDFC Limited since 1993. Mr. Satwalekar obtained a Bachelors Degree in
Technology from the Indian Institute of Technology, Bombay and a Masters
Degree in Business Administration from The American University, Washington
DC.

GROUP COMPANIES
HDFC Bank: World Class Indian Bank- among the top private banks in India.
HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.
Intelenet Global: BPO services for international customers.
CIBIL: Credit Information Bureau India Limited.
HDFC Chubb: Upcoming Private companies in the field of General Insurance.
HDFC Mutual Fund
HDFC reality.com: Helps to search properties in all major cities in India
HDFC securities

STANDARD LIFE
Standard Life is Europes largest mutual life assurance company. Standard
Life, which has been in the life insurance business for the past 175 years is a
modern company surviving quite a few changes since selling its first policy in
1825. The company expanded in the 19 th century from kits original Edinburgh
premises, opening offices in other towns and acquitting other similar
businesses.

Standard Life Currently has assets exceeding over 70 billion under its
management and has the distinction of being accorded AAA rating
consequently for the six years by Standard and Poor.

SNAPSHOT

Founded in 1875, company supporting generation for last 179 years.

Currently over 5 million Policy holders benefiting from the services

offered.

Europes largest mutual life insurer.

JOINT VENTURE
HDFC Standard Life Insurance Company Limited was one of the first
companies to be granted license by the IRDA to operate in life insurance
sector. Reach of the JV player is highly rated and been conferred with many
awards. HDFC is rated AAA by both CRISIL and ICRA. Similarly, Standard Life
is rated AAA both by Moodys and Standard and Poors. These reflect the
efficiency with which HDFC and Standard Life manage their asset base of Rs.
15,000 Cr and Rs. 600,000 Cr. respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14 th August

2000. HDFC is the majority stakeholder in the insurance JV with 81.4% staple
and Standard of as a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO
of the venture.
HDFC Standard Life Insurance Company Ltd. Is one of Indias leading Private
Life Insurance Companies, which offers a range of individual and group
insurance solutions. It is a joint venture between Housing Development
Finance Corporation Limited (HDFC Ltd.) Indias leading housing finance
institution and the Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Both the promoters are will

known for their ethical dealings and financial strength and are thus
committed to being a long-term player in the life insurance industry- all
important factors to consider when choosing your insurer.

BUSINESS GROWTH
Track Record so far
The gross premium income of HDFC, for the year ending March 31, 2007
stood at Rs. 2,856 crores and new business premium income at Rs. 1,624
crores.
The company has covered over 8,77,000 lives year ending March 31, 2007.
Company also declared our 5th consecutive bonus in as many years for our
with profit policyholders.

KEY STRENGTH
Financial Expertise
As a joint venture of leading financial services groups. HDFC standard Life has
the financial expertise required to manage long-term investments safely and
efficiently.

Range of Solutions
HDFC SLIC has a range of individual and group solutions, which can be easily
customized to specific needs. These group solutions have been designed to
offer complete flexibility combined with a low charging structure.

Strong Ethical Values:

HDFC SLIC is an ethical and Cultural Organization. False selling or false
commitment with the customers is not allowed.

Most respected Private Insurance Company

HDFC SLIC was awarded No-1 Private Insurance Company in 2004 by the
World Class Magazine Business World for Integrity, Innovation and Customer
Care.

CORPORATE OBJECTIVE
Vision
'The most successful and admired life insurance company, which means that
we are the most trusted company, the easiest to deal with, offer the best
value for money, and set the standards in the industry'.

'The most obvious choice for all'.

Values
.Integrity
.Innovation
.Customer centric
.People Care One for all
.Teamwork
.Joy and Simplicity

PRODUCTS & SERVICES

The right investment strategies won't just help plan for a more comfortable
tomorrow -- they will help you get Sar Utha ke Jiyo. At HDFC SLIC, life
insurance plans are created keeping in mind the changing needs of family. Its
life insurance plans are designed to provide you with flexible options that
meet both protection and savings needs. It offers a full range of transparent,
flexible and value for money products. HDFC SLIC products are modern and
contemporary unitized products that offer unique customer benefits like

flexibility to choose cover levels, indexation and partial withdrawals. (Source:

www.hdfcslic.com)

PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE

INSURANCE

Individual Products
Protection Plans
A person can protect his family against the loss of his income or the
burden of a loan in the event of his unfortunate demise, disability or
sickness. These plans offer valuable peace of mind at a small price.
Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan.
Investment Plans
HDFC SLICs Single Premium Whole of Life plan is well suited to meet
long term investment needs. This provides attractive long term returns
through regular bonuses.
Pension Plans
Pension Plans help to secure financial independence even after retirement.
Pension range includes Personal Pension Plan, Unit Linked Pension,
Unit Linked Pension Plus.
Savings Plans
Savings Plans offer a flexible option to build savings for future needs such
as buying a dream home or fulfilling your childrens immediate and future
needs.
Savings range includes Endowment Assurance Plan, Unit Linked
Endowment, Unit Linked Endowment Plus, Unit Linked Endowment

Plus II, Money Back,

Unit Linked Enhanced Life Protection II, Children's Plan, Unit
Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young
Star Plus II.

Group Products
One-stop shop for employee-benefit solutions
HDFC Standard Life has the most comprehensive list of products for
progressive employers who wish to provide the best and most innovative
employee benefit solutions to their employees. It offers different products for
different needs of employers ranging from term insurance plans for pure
protection to voluntary plans such as superannuation and leave encashment.
HDFC SLIC offers the following group products to esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage
corpuses with Gratuity, Defined Benefit or Defined Contribution
Superannuation or Leave Encashment schemes of your company
Also suitable for other employee benefit schemes such as salary saving
schemes and wealth management schemes

Social Product
Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to

members of a Development Agency for a term of one year. On the death of any
member of the group insured during the year of cover, a lump sum is paid to those
member beneficiaries to help meet some of the immediate financial needs
following their loss.
Eligibility
Members of the development agency and their spouses with:
- Minimum age at the start of the policy 18 years last birthday
- Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The
group to be covered is only eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in the group and will be the
same for all members of the group.
The premium can only be paid by the Development Agency as a single lump sum
that includes all premiums for the group to be covered. Cover will not start until
the premium and all the member information in our specified format has been
received.

Benefits
On the death of each member covered by the policy during the year of cover a
lump sum equal to the sum assured will be paid to their beneficiaries or legal
heirs. Where the death is as a result of an accident, an additional lump sum will
be paid equal to half the sum assured. There are no benefits paid at the end of
the year of cover and there is no surrender value available at any time.
The role of the Development Agency
Due to the nature of the groups covered, HDFC Standard Life will be passing
certain administrative tasks onto the Development Agency. By passing on these
tasks the premium charged can be lower. These tasks would include:

Submission of member data in a specified computer format

Collection of premiums from group members
Recording changes in the details of group members
Disbursement of claim payments and the mortality rebate (if any) to group
members
These tasks would be in addition to the usual duties of a policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance on how to complete the
tasks appropriately. Since these additional tasks will impose a burden on the
Development

Agency,

the

Development

Agency

may

charge

Rs.

10

administration fee to their members.

Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or indirectly, as an
inducement to any person to take out or renew or continue an insurance in
respect of any kind of risk relating to lives or property in India, any rebate of the
whole or part of the commission payable or any rebate of the premium shown
on the policy, nor shall any person taking out or renewing or continuing a policy
accept any rebate, except such rebate as may be allowed in accordance with
the published prospectus or tables of the insurer
If any person fails to comply with sub regulation (previous point) above, he shall
be liable to payment of a fine which may extend to rupees five hundred

INTROUCTION TO UNIT LINKED FUNDS

Unit linked plans are based on the component of the premium or the
contribution of the customer towards the plan. This contribution can be in
different modes like yearly, half yearly, quarterly and monthly. Unit linked plans
have

multiple

benefits

like

life

protection,

rider

protection,

savings,

transparency, investment choices, liquidity and planning for taxes. These plans
work like mutual funds.

The premium is collected from the policy holder. He is allotted a certain number
of units based of his contribution. The Net Asset Value is the value of each unit
of the fund. It is found by subtracting the charges and current liabilities from the
current assets and investments and dividing this number by the total number of
outstanding units.
Let us take an example. There are 100 investors and each invests Rs. 10 in a
fund. The total value of the fund is Rs. 1000 and each person is allotted 1 unit of
Rs 10. Now the money (Rs. 1000) is invested in the debt or equity market.
Suppose the fund value increased by 20%. As a result the Rs. 1000 invested
became Rs. 1200. Hence the value of every investor is now Rs. 12 and not Rs.
10.

UNIT LINKED VERSUS OTHER FINANCIAL INSTRUMENTS

Parameters

RBI Bonds

Fixed

Mutual Funds

Unit linked

Safety

High

Deposits
High

Medium

High

Liquidity

None

High

High

High

Returns

Low

Low

High

High

Life Cover

1 time

1 time

1 time

10 times

Tax benefits

amount
Tax free

amount
Taxed

amount
Taxed

Tax free

We find that life insurance unit linked plans is a good area to invest money in as
it provides liquidity, safety, high returns, life cover and tax benefits in a single
plan. HDFC SLIC offers the option of indexation to beat inflation. Risk is reduced
to a large extent as the company invests in a diversified portfolio of stocks.

Tax Benefits
INCOME

TAX GROSS ANNUAL HOW

SECTION

SALARY

TAX

MUCH HDFC
CAN

STANDARD

YOU LIFE PLANS

SAVE?
Sec. 80C

Across All income Upto Rs. 33,990 All the life insurance
Slabs

saved

on plans.

investment

of

Rs. 1,00,000.
Sec. 80 CCC

Across all income Upto Rs. 33,990 All the pension plans.
slabs.

saved

on

Investment

of

Rs.1,00,000.
Sec. 80 D

Across all income Upto

slabs

Rs.

saved
Investment
Rs. 10,000.

TOTAL

SAVINGS

POSSIBLE

Sec. 10 (10)D

3,399 All

the

health

on insurance
of

available

riders
with

the

conventional plans.
Rs37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399
under Sec. 80 D, calculated for a male with gross annual
income
exceeding Rs. 10,00,000.

Under Sec. 10(10D), the benefits you receive are completely

tax-free, subject to the conditions laid down therein.

AWARDS AND ACCOLADE OF HDFCSL

AWARDS
APRAIL 200
ADFEST 2007 3 Awards
Our advertising has helped create high awareness for our brand and has
bagged 2 silver and 1 bronze awards at the ADFEST 2007 National Awards
organized by Advertising Agencies Association of India (AAAI, the premier
advertising body in India).
The 3 awards that our ads won are notable for a number of reasons:
The ADFEST 2007 is the biggest national awards festival in the marketing
and advertising field.
The 3 awards are the highest won by any single brand in the Financial
Services business (including Banking, MF, Insurance other Financial
Services).
The 2 silvers were won in a category where the gold was not awarded to any
brand. Thus the silver was the best that any brand could have got.
Our brand topped radio as a medium across all brands - across all industries.
b. March 2007
4Ps Power Brand 2007
HDFC Standard Life was selected as '4Ps Power Brand 2007', for being one
of Indias 25 Best Startup Companies in an exclusive survey conducted by
ICMR (Indian Council of Market Research) and 4Ps - Business and
Marketing (a Business and Marketing magazine published by Plan man
Media). The list of companies was prepared based on innovative and new
concepts brought about to serve the Indian consumers. The research on the
25 best startups was based upon the number of years since the company has
been established vis-a-vis the growth of the company.
c. August 2006
4Ps Power Brand 2006

HDFC Standard Life has been as '4Ps Power Brand 2006', for being one of
India's Top 25 5'Most Innovative Companies' in an exclusive survey
conducted by ICMR (Indian Council of Market Research) and 4Ps Business and Marketing (a Business and Marketing magazine published by
Plan man Media). The survey highlighted 25 companies that have made
India think differently and radically through their Business and Marketing
practices. HDFC Standard Life was the only company selected from the
insurance domain. Besides us, the list included giants like (in no particular
order) HLL, Microsoft, Nokia, LG, Samsung, IBM, HP, ITC Group, Hero
Honda, Bajaj Auto, Ranbaxy, ICICI Bank, SBI Bank, Bennett, Coleman &
Co. Ltd., Tata Group, Kingfisher Airlines, Bharti Televentures, Pantaloon,
General Electric, HPCL, Maruti, Anil Dhirubhai Group, Reliance Industries
and CNBC TV 18.
ACCOLADE
a. March, 2008
Unit Linked Savings Plan Advertisement Tops Mint Best TV Ads
Survey
Mint 24/03/2008
The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of
the leading private insurance companies in India, has topped Mints Top
Television Advertisement survey conducted, for February 2008. HDFC
Standard Lifes Unit Linked Savings Plan advertisement was ranked 4th in
terms of a combined score of ad awareness and brand recall and 3rd in terms
of ad diagnostic scores (likeability, enjoyment, believability, and claim). The
respondents were between 18 and 40 years. Mints exclusive report, New
voices in a makeover outlines the survey in detail.
b. January2008
4Ps Business and Marketing's recent issue covers '60 Glorious Advertising
& Marketing Moments' over the last 60 years in India.
Issue dated 21/12/2007 to 03/01/2008
The 50's have been named as the era of setting up new institutions with Air
India Maharaja titled as the first Indian brand mascot, Surf being India's first
detergent powder. The 60's saw the maturing of brand punch lines and the

beginning of jingles, with 'MRF Muscleman', 'Utterly Butterly Delicious

Amul'; the 70's heralded the age of professionalism with the Liril girl at the
waterfall; the 80's saw many iconic Indian brands being launched with
Bombay Dyeing, Maggi Noodles, Lalitaji endorsing Surf and others; since
1991 where the massive inflow of brands into India, initiated a veritable
deluge of marketing and positioning strategies, with the famous Ericsson
commercial, Cadbury's 'Kya Swad Hai Zindagi Mein' and many others.
In the new millennium, ideas that created an impact include the 'Incredible
India' campaign, Hutch campaign with the little pup 'Chika', Indianised
version of coke commercials featuring Aamir Khan, among many others. In
this feature they have made a special mention on Insurance advertising
becoming 'happier' as one of those glorious moments. Earlier, insurance
advertisements showed signs of negativity and focused on just protection. It
mentions HDFC Standard Life to be "....one of the first private insurers to
break the ice using the idea of self respect (Sar Utha Ke Jiyo) instead of
'death' to convey its brand proposition, which was then, followed by others
including ICCI Prudential, thus giving us the credit of bringing up one such
glorious advertising and marketing moment in last 60 years!
c. December 2007
A survey of the best ads on television in November in which HDFC
Standard Life pension plans, topped the ad diagnostics and came in eighth
on ad reach - Mint 24/12/2007
Our pension advertising was ranked first in terms of ad diagnostic scores
(including likeability, credibility, enjoyment).
Especially important as respondents were between 18 and 40 yrs and
therefore our target prospects.
And was ranked 8th in terms of a combined score of ad awareness and brand
recall.
Our advertising started in the last week of November and therefore has
managed to reach audiences quickly, especially since the study was done in
November. Given our media spends, our industry and other brands in the
ranking, this score is very encouraging.d.
December 2007

Column 'AGK SPEAK" in Business Standard by A.G. Krishnamurthy

(AGK), an advertising industry veteran, where he has spoken highly about
our pension commercial.
Business Standard 21/12/2007
d. AGKSPEAKWHAT IVE LIKED - Straight to the heart!
I have often said that nothing makes an ad work like empathy. Find a
connect and you have done it! That is exactly what the HDFC Pension
Plans television commercial, airing on most channels, currently achieves.
Even though the target audience might not have been me and my wife but
rather, a younger couple who should be investing their earnings wisely, we
both felt an instant bonding with the couple on screen!
The casting has been done so superbly that I am sure that the reaction must
be common across the country. Although the couple expresses sentiments
that might seem alien to the children of today, they are very much a part of
our syntax. Admittedly, todays girls are far more independent and wouldnt
dream of total dependence on any one, it was not quite so just a generation
ago. It was the norm rather, for a husband to be totally responsible for his
wifes comfort and yes, statements like Did you ask for my hand to put me
through all this strike a chord. So even if my daughters generation is
reminded of their parents when this ad airs, I am sure it still does its job by
getting them to plan for a light-heated retirement depicted by the ever-so
identifiable on screen pair.
e. September 2007
JusConsults Ad Box Office Monthly Monitor (featured in Economic
Times)- HDFC Standard Life was ranked 6th amongst The 10 most
effective ads in September 2007. It moved up from 56th in August 2007.
JuxtConsults Ad Box Office is Indias biggest monthly monitor of most
effective television ads amongst urban consumers. The ranking was based
on the total effectiveness of the ad in connecting the brand with the
consumers.
JuxtConsults Ad Box Office Monthly Monitor (featured in Economic
Times)- HDFC Standard Lifes ad slogan Sar Utha Ke Jiyo was ranked
10th in the Top 10 Top-of-mind ad slogans in September, 2007 (The ranking

was based on how much our ad slogan recalled top of mind in the daily ad
clutter.)
f. december2006-January 2007
HDFC Standard Life was ranked 29th in the most trusted Indian Brands
amongst the Top 50 Service Brands of 2006. This study was conducted by
Brand Equity (Economic Times supplement). HDFC SL moved up 16 places
to be positioned at number 29 (was earlier at 45). The highest jump amongst
all service brands.

CHAPTER IV
COMPANY PROFILE
OF
TATA AIG LIFE
INSURANCE
COMPANY LTD.

TATA AIG LIFE INSURANCE COMPANY LIMITED

Introduction
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture
company, formed by the Tata Group and American International Group, Inc.
(AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership
position in India and AIGs global presence as the worlds leading
international insurance and financial services organization. The Tata Group
holds 74 per cent stake in the insurance venture with AIG holding the balance
26 percent. Tata AIG Life provides insurance solutions to individuals and
corporate. Tata AIG Life Insurance Company was licensed to operate in India
on February 12, 2001 and started operations on April 1, 2001.

THE TATA GROUP

The Tata Group is one of India's largest and most respected business
conglomerates, with revenues in 2004-05 of $17.8 billion (Rs. 799,118
million), the equivalent of about 2.8 per cent of the country's GDP. Tata
companies together employ some 215,000 people. The Group's 32 publicly
listed enterprises - among them standout names such as Tata Steel, Tata
Consultancy Services, Tata Motors and Tata Tea - have a combined market
capitalization that is the highest among Indian business houses in the private
sector, and a shareholder base of over 2 million. The Tata Group has
operations in more than 40 countries across six continents, and its companies
export products and services to 140 nations.

AIG
American International Group, Inc. (AIG), world leaders in insurance and
financial services, is the leading international insurance organization with
operations in more than 130 countries and jurisdictions. AIG companies serve
commercial,

institutional

and

individual

customers

through

the

most

extensive worldwide property-casualty and life insurance networks of any

insurer. In addition, AIG companies are leading providers of retirement
services, financial services and asset management around the world. AIG's

common stock is listed on the New York Stock Exchange as well as the stock
exchanges in London, Paris, Switzerland and Tokyo.
Tata AIG has strong brand name and recall factor which most of its
competitors lack in. Other than the public behemoth Life Insurance
Corporation (LIC) of India which has a major hold in the market share (of
approximately 79%), the private players too are having more and more
opportunities to tighten their hold of the market. Of the private players, ICICI
Prudential comes first with an almost 4.50% of the market share followed by
Tata AIG with about 2.10% of the pie. The private players have everything to
work for, especially with LIC not meeting the needs of its clientele with
respect to the services they need. This provides a prospect for the private
sector players to increase their share of the market. Companies with a
familiarity such as Tata AIG can especially achieve their targets due to the
brand image that the Tata group has.
(Source: www.tata-aig-life.com)
A recent survey conducted by the Voluntary Organization in Interest of
Consumer Education (VOICE) revealed Tata AIG Life Insurance Company (Tata
AIG Life) as the clear winner in terms of customer satisfaction in the
life insurance category. This is India's first-ever customer satisfaction
study for the insurance sector.
The survey also revealed that Tata AIG Life had a high recall as a reputed
brand name. The ability to provide innovative and customer-focused service
such as allowing the maximum grace period for premium payment has not
only further distinguished Tata AIG Life from other life insurance companies
but also appealed to consumers.

PRODUCTS & SERVICES:

Corporate life insurance products:

Employee Benefits

Credit Life

Group Pensions

Workplace Solutions

Individual life insurance products:

Health First

Health Protector

Mahalife

InvestAssure II, InvestAssure Gold

Shubh life, Nirbhay life

With respect to individual life insurance products, Tata AIG has an array of
policies to suit the needs and requirements of all age groups viz, children,
students, adults, retirees etc.
The SUPPORT arm of Tata AIG Life is constituted of Operations, Human
Resources, Marketing, Corporate Training, Finance and Compliance.
Tata AIG Life possesses the philosophy and drive to customize retirement
obligations (for the company) which occur in the form of cash outflows, for
the maximum benefit of both the employer and the departing employee.

CHAPTER V
COMPETITORS

OTHER COMPETITORS
LIFE INSURANCE CORPORATION OF INDIA (LIC)
LIC has an excellent money back policy which provides for
periodic payments of partial survival benefits as long as
the policy holder is alive. 20% of the sum assured is
payable after 5, 10, 15 and 20 years and the balance 40%
is payable at the 20th year along with accrued bonus.
(www.lic.com)
For a 25 years term , 15% of the sum assured becomes
payable after 5,10,15 and 20 years and the balance 40%
plus the accrued bonus becomes payable at the 25 th year.
An important feature of these types of policies is that in
the event of the death of the policy holder at any time
within the policy term the death claim comprises of full
sum assured without deducting any of the survival benefit
amounts which have already been paid. The bonus is also
calculated on the full sum assured.

HDFC SLIC does not have a money back policy. It could

offer a money back plan and capture some portion of this
market. While marketing insurance products I found that
many customers wanted to purchase these plans.
LIC offers 66 different plans; plans are formulated for
specific occasions whole life plans, term assurance plans,
money back plan for women, child plans, plans for the
handicapped individuals, endowment assurance plans,
plans for high worth individuals, pension plans, unit linked
plans, special plans, social security schemes diversified
portfolio of products. HDFC SLIC could diversify its product
portfolio. It could add more plans for high worth individuals
and women.
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for HDFC SLIC. The
company is a merger between ICICI Bank which is the
biggest private bank in India and Prudential Plc which is a
global life insurance company.
The company has an investment plan which is market
related Invest Shield Life. In this plan even if the market
falls, the premium will be returned to investors. It is a
guaranteed plan which ensures the company carefully

invests your money. The stock market performance of ICICI

Prudential is much better than HDFC SLIC. The returns on
the growth fund were 46.28% compared to the 42.70%
offered by HDFC SLIC. Customers are attracted by higher
returns and this is a plus point for Prudential.
The company is very well advertised. The advertisements
are

showcased

in

movies,

television,

newspapers,

magazines, bill boards, radio etc. The company has an

excellent brand ambassador Mr. Amitabh Bacchan. His
promotion of the company builds trust and faith in the
minds of our people.
However the charges are very high in the plans offered by
ICICI Prudential. It is 35% during the first year, 15% in the
next year and 3% from the third year onwards. Also a
higher minimum premium of Rs. 8000 is charged. Hence
the policies are not accessible to the lower strata of the
society. (Source: www.iciciprulife.com)

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture
between The Aditya Birla Group, one of the largest

business houses in India and Sun Life Financial Inc., a

leading international financial services organization. The
local knowledge of the Aditya Birla Group combined with
the expertise of Sun Life Financial Inc., offers a formidable
protection for your future. (Source: www.birlasunlife.com)
The Aditya Birla Group has a turnover close to Rs. 33000
crores with a market capitalization of Rs. 53400 crores (as
on 31st March 2007). It has over 72000 employees across
all its units worldwide. It is led by its Chairman - Mr. Kumar
Mangalam Birla. Some of the key organizations within the
group are Hindalco and Grasim.
Sun Life Financial Inc. and its partners today have
operations in key markets worldwide, including Canada,
the United States, the United Kingdom, Hong Kong, the
Philippines, Japan, Indonesia, India, China and Bermuda. It
had assets under management of over US$343 billion, as
on 31st March 2007. The company is a leading player in
the life insurance market in Canada.
Being a customer centric company, BSLI has invested
heavily in technology to build world class processing
capabilities. BSLI has covered more than a million lives
since inception and its customer base is spread across

more than 1000 towns and cities in India. All this has
assisted the company in cementing its place amongst the
leaders in the industry in terms of new business premium
income. The company has a capital base of 520 crores as
on 31st July, 2007.
Its Flexi Life Line Plan offers life long insurance cover till
the policy holder is 100 years of age. There are
guaranteed returns of 3% p.a. net of policy charges after
every 5 years from the eleventh policy year onwards.
However the charges are very high. The initial charges for
the first year are 65%. Hence the fund value is greatly
reduced.
BAJAJ ALLIANZ
Bajaj Allianz is a joint venture between Allianz AG with
over 110 years of experience in over 70 countries and
Bajaj Auto, a trusted automobile manufacturer for over 55
years in the Indian market. Together they are committed to
offering you financial solutions that provide all the security
you need for your family and yourself. Bajaj Allianz is the
number one private life insurer for the year 2005 2006. It
is leading by 78 crores. It has experienced a whopping
growth of 216% in the last financial year.

The company has sold 13, 00,000 policies and is backed

by 550 offices across India. It offers travel insurance,
motor insurance, home insurance, health and corporate
insurance. The mortality charges are lower than HDFC
SLIC. The entry age could be zero years which allow even
new

born

babies

to

be

insured.

(Source:

www.bajajallianz.com)

CHAPTER VI

POINTS OF PARITY

AND
POINTS OF
DIFFERENCE

BETWEEN
HDFC SLIC AND TATA
AIG

Points of Parity

Funds available with ULIP Plans

General Description

Nature of Investments

Risk Category

Equity Funds

Primarily invested in company

stocks with the general aim of
capital appreciation

High

Income, Fixed Interest

and Bond Funds

Invested in corporate bonds,

government securities and other
fixed income instruments

Medium

Cash Funds

Sometimes known as Money

Market Funds invested in cash,
bank deposits and money market
instruments

Low

Balanced Funds

Combining equity investment

with fixed interest instruments

Medium

Generally all life insurance companies have three types of fund which are
Equity fund, Debt fund and Balance fund. These fund have different risk
profile. Equity fund has high risk but it gives high return, Debt fund has low
risk so it gives low return and Balanced fund is combination of both Equity
and Debt fund so risk is medium and return is also low.
Both HDFC SLIC and Tata AIG LIC have 7 types of funds based on combination
of DebtEquity fund. These are liquid fund, stable managed fund, secure
managed fund, defensive managed fund, balanced managed fund, equity
managed fund, growth fund.
Indexation
You have the option to increase your regular premiums by an indexation rate
at any policy anniversary to protect the real value of your investment against
inflation. The rate of indexation will be in line with the increase in the Whole
Sale Price Index (or in the event that this Index ceases to be published such
other index as the Company may select for this purpose). The base sum
assured and sum assured of any attached rider would also be increased by
the corresponding indexation increase.

Charges, Fees and Deductions in ULIP

Premium Allocation Charge

This is a premium-based charge. After deducting this charge from premiums,

the remainder is invested to buy units. The Allocation charges are guaranteed
for the entire duration of policy term.

Mortality Charge

The Mortality Charge will apply on the Sum at Risk (SAR = Sum Assured less
the Fund Value pertaining to regular premiums). It will be deducted by
monthly cancellation of units from the accumulation unit account. The
Mortality Charge shall remain guaranteed throughout the policy term.

Fund Management Charge

1% p.a. on With Profits Fund, 1% p.a. on Debt Fund, 1.25% p.a. on Balanced
Fund and 1.50% p.a. on Growth Fund. FMC will be applied on the fund while
calculating NAV on a daily basis. The maximum FMC on any fund is 2% p.a.
subject to prior approval by the IRDA.

Policy Administration Charge

Rs. 60 per month, which will increase by 5% p.a. on the 1st of January each
year. PAC will be deducted monthly by cancellation of units from the
accumulation unit account. If premiums are discontinued, this charge would
reduce to 60% of the charge applicable for the premium paying policies

Surrender Charge

This is the charge that applies when the policy is surrendered. It is equal to
50% of the difference between regular premiums expected and those paid in
the first year of the contract.

Service Tax Deductions

12.36% service tax is applicable on the first premium of life insurance policy.

Tax Benefits
Tax benefits will be as per Section 80C & Section 10(10D) of the Income Tax
Act, 1961. Insurance is tax free up to Rs. 100000 per annum and the returns
on investment on maturity of the policy are also tax free.

Riders and Bonuses

Free Look Period

Reversionary Bonus
Terminal Bonus
TOP UP

HDFC Standard Life

Insurance
15 days
Based on company's
performance
Based on company's
performance
Minimum Rs. 5000

Tata AIG Life

Insurance
15 days
Based on company's
performance
Based on company's
performance
Minimum Rs. 5000

Gives on diagnosis of
anyone
of 6 critical illness

Gives on diagnosis of
anyone
of 12 critical illness

Provides

Provides

Provides

Provides

Provides
Provides

Does not provide

Does not provide

Does not provide

Provides

Provides

Provides

Riders
Critical Illness (CI)
Benefit
Additional Term
Benefit (ATB)
Accidental Death
Benefit (ADB)
Double Benefit
Triple Benefit
Payer Benefit Rider
(PBR)
Waiver of Premium
(WOP) Benefit

Points of Difference

Grace Period
Policy Administration
Charge

HDFC Standard Life

Insurance
15 days

Tata AIG Life

Insurance
31 days

Rs. 60 per month

Rs. 55 per month

Guaranteed Bonus

Does not give

Loyalty Bonus

0.1% every year

Fund Switching
Charge
Guaranteed Surrender
value
Fund Management
Charge

Total 24 free switches

in a policy
after this Rs. 100 per
Switch
50% of all premium
paid excluding 1st
premium
0.80% per annum
on the fund value

Premium Redirection
Charge

Total 12 free Premium

Redirection
in a policy after this
Rs. 250 per Premium
Redirection

Last Year Return

42.70%

10% on sum-assured
after 10 year
0.25% after every 4th
year
4 free switches per
year after this
Rs. 250 per switch
30% of all premium
paid excluding 1st
premium
1.75% per annum
on the fund value
First 2 Premium
Redirection in a
year is free after this
Rs. 1000
per Premium
Redirection
72%

We see that both the life insurance companies products are almost
same. They have same charges, fees and deductions. There is slightly
difference in charges and maximum limits of all charges are fixed by
IRDA. Before buying any life insurance policy one should check charges
and fees on policy and companys overall performance and return
given to its consumer.

CHAPTER VII
COMPETITIVE
ANALYSIS

COMPETITIVE ANALYSIS
LIFE INSURANCE CORPORATION OF INDIA (LIC)
LIC has an excellent money back policy which provides for periodic payments
of partial survival benefits as long as the policy holder is alive. 20% of the
sum assured is payable after 5, 10, 15 and 20 years and the balance 40% is
payable at the 20th year along with accrued bonus. (www.lic.com)
For a 25 years term , 15% of the sum assured becomes payable after 5,10,15
and 20 years and the balance 40% plus the accrued bonus becomes payable
at the 25th year. An important feature of these types of policies is that in the
event of the death of the policy holder at any time within the policy term the
death claim comprises of full sum assured without deducting any of the
survival benefit amounts which have already been paid. The bonus is also
calculated on the full sum assured.
HDFC SLIC does not have a money back policy. It could offer a money back
plan and capture some portion of this market. While marketing insurance
products I found that many customers wanted to purchase these plans.
LIC offers 66 different plans; plans are formulated for specific occasions
whole life plans, term assurance plans, money back plan for women, child
plans, plans for the handicapped individuals, endowment assurance plans,
plans for high worth individuals, pension plans, unit linked plans, special
plans, social security schemes diversified portfolio of products. HDFC SLIC
could diversify its product portfolio. It could add more plans for high worth
individuals and women.
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger
between ICICI Bank which is the biggest private bank in India and Prudential
Plc which is a global life insurance company.

The company has an investment plan which is market related Invest Shield
Life. In this plan even if the market falls, the premium will be returned to
investors. It is a guaranteed plan which ensures the company carefully
invests your money. The stock market performance of ICICI Prudential is
much better than HDFC SLIC. The returns on the growth fund were 46.28%
compared to the 42.70% offered by HDFC SLIC. Customers are attracted by
higher returns and this is a plus point for Prudential.
The company is very well advertised. The advertisements are showcased in
movies, television, newspapers, magazines, bill boards, radio etc. The
company has an excellent brand ambassador Mr. Amitabh Bacchan. His
promotion of the company builds trust and faith in the minds of our people.
However the charges are very high in the plans offered by ICICI Prudential. It
is 35% during the first year, 15% in the next year and 3% from the third year
onwards. Also a higher minimum premium of Rs. 8000 is charged. Hence the
policies are not accessible to the lower strata of the society. (Source:
www.iciciprulife.com)

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture between The
Aditya Birla Group, one of the largest business houses in India and Sun Life
Financial Inc., a leading international financial services organization. The local
knowledge of the Aditya Birla Group combined with the expertise of Sun Life
Financial Inc., offers a formidable protection for your future. (Source:
www.birlasunlife.com)
The Aditya Birla Group has a turnover close to Rs. 33000 crores with a market
capitalization of Rs. 53400 crores (as on 31st March 2007). It has over 72000
employees across all its units worldwide. It is led by its Chairman - Mr. Kumar
Mangalam Birla. Some of the key organizations within the group are Hindalco
and Grasim.

Sun Life Financial Inc. and its partners today have operations in key markets
worldwide, including Canada, the United States, the United Kingdom, Hong
Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. It had
assets under management of over US$343 billion, as on 31st March 2007.
The company is a leading player in the life insurance market in Canada.
Being a customer centric company, BSLI has invested heavily in technology
to build world class processing capabilities. BSLI has covered more than a
million lives since inception and its customer base is spread across more than
1000 towns and cities in India. All this has assisted the company in
cementing its place amongst the leaders in the industry in terms of new
business premium income. The company has a capital base of 520 crores as
on 31st July, 2007.
Its Flexi Life Line Plan offers life long insurance cover till the policy holder is
100 years of age. There are guaranteed returns of 3% p.a. net of policy
charges after every 5 years from the eleventh policy year onwards. However
the charges are very high. The initial charges for the first year are 65%.
Hence the fund value is greatly reduced.
BAJAJ ALLIANZ
Bajaj Allianz is a joint venture between Allianz AG with over 110 years of
experience in over 70 countries and Bajaj Auto, a trusted automobile
manufacturer for over 55 years in the Indian market. Together they are
committed to offering you financial solutions that provide all the security you
need for your family and yourself. Bajaj Allianz is the number one private life
insurer for the year 2005 2006. It is leading by 78 crores. It has experienced
a whopping growth of 216% in the last financial year.
The company has sold 13, 00,000 policies and is backed by 550 offices across
India. It offers travel insurance, motor insurance, home insurance, health and
corporate insurance. The mortality charges are lower than HDFC SLIC. The

entry age could be zero years which allow even new born babies to be
insured. (Source: www.bajajallianz.com)
TATA AIG
Tata Aig is a joint venture between the Tata group and American International
Group Inc. In one of the plans the company offers hospital cash benefit
wherein it will pay Rs. 2500 per day in case of hospitalization and Rs.12.5
lakhs in case the person suffers from any critical illness. Annual premium is
much less (about Rs. 6712) to avail such a good benefit. Charges are
relatively low compared to HDFC SLIC for some policies.
The company offers high coverage plans at low cost. There is a plan even for
a policy term of 1 year. Your family can continue to enjoy their current
lifestyle even in the case of something happening to you. These plans are
very flexible and HDFC SLIC could adopt this idea of insuring individuals for
short periods of time. For example; there is a family of four. The only earning
member is the father.
He has just taken a loan from a bank of 20 lakhs to purchase a new home. He
is able to repay the loan with his current salary in 15 years. The problem
arises if something were to happen to him within these fifteen years. Not only
will the family face the emotional and financial loss of their father but they
will also have to repay the home loan or risk being homeless. (Source:
www.tataaig.com)

CHAPTER VIII
MARKETING
PROBLEMS

MARKETING PROBLEMS
The old and out dated technique of tele marketing is used to prospect
customers. More modern techniques must be adopted. The company must
sponsor shows and give presentations in corporate houses. The financial
health check must be performed for every prospect to assess his/her true
financial position and needs. Some of the advisors skip this vital step and the
prospect ends up with a plan they do not appreciate and soon surrender or
discontinue.
Some of the main problems in marketing the policies are:
Large amount of competition (18 players in the market)
Other brands are well advertised and have higher recall value
LIC is considered a safer option
Face competition from banks and mutual funds
High premium policies are difficult to market
Incorrect perception about insurance
Interested prospects might have a lack of time and postpone
investments
Customers get defensive if you cold call
Short term plans are available only at large premium
Customers do not have risk appetite to invest in shares
Some prospects have already invested and are not interested in further
investments
Consumers dont want to undertake medical examinations
Large amount of documentation
Customers do not like their money locked up for many years

 Lack of awareness about the unit linked funds in the market

No money back plan present in the product portfolio

SUGGESTIONS FOR IMPROVEMENT

Advertise about the company and its products it motivates
individuals to purchase insurance
Create a positive perception about insurance
Speak about the good features a plan offers like high returns, life
cover, tax benefits, indexation, accident cover while prospecting
customers
Try to sell the product/plan which the consumer requires and not the
plan where the advisors benefit is higher
Improve the efficiency in operations
Bring out policies with small premiums payable for short periods of
time Rs. 5000 Rs. 10000 per annum for 10 years
Attract the youth of India with higher returns on investment as returns
are the motivating factor which influence purchase of insurance
Promote insurance in colleges and corporate houses
Promote HDFC SLIC as an Indian Company to build trust
HDFC SLIC could have a brand ambassador or a mascot to promote its
services
Should have partial withdrawals from the first year onwards
Tap the rural market where there is large potential
Diversify product portfolio
Make products more straight forward reduce complexities

CHAPTER IX
ANALYSIS
&
INTERPRETATION

ANALYSIS & INTERPRETATION

A SURVEY ON THE LIFE INSURANCE INDUSTRY IN INDIA
AGE GROUP OF SURVEYED RESPONDENTS
TABLE 1:
Age group

No. of Respondents

18 - 25 years

127

26 - 35 years

67

36 - 49 years

46

50 - 60 years

24

More than 60 years

CHART 1:

Analysis:

From the chart above we find that 47% of the respondents fall in the age
group of 18 25 years, 25% fall in the age group of 26 35 years and 17%
fall in the age group of 36 49 years.
Therefore most of the respondents are relatively young (below 26 years of
age). These individuals could be induced to purchase insurance plans on the
basis of its tax saving nature and as an investment opportunity with high
returns.
Individuals at this age are trying to buy a house or a car. Insurance could help
them with this and this fact has to be conveyed to the consumer. As of now
many consumers have a false perception that insurance is only meant for
people above the age of 50. Contrary to popular belief the younger you are
the more insurance you need as your loss will mean a great financial loss to
your family, spouse and children (in case the individual is married) who are
financially dependent on you.

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

TABLE 2:

CHART 2:

Particulars

No. of Respondents

Male

193

Female

77

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

TABLE 3:
Customer profile

No. of respondents

Student

62

Housewife

Working Professional

116

Business

49

Self Employed

24

Government service employee

14

CHART 3:

Analysis:
From the chart above it can clearly be seen that 43% of the respondents are
working professionals, 23% are students and 18% are into business.
Therefore the target market would be working individuals in the age group of
18 25 years having surplus income, interested in good returns on their
investment and saving income tax.
NO. OF RESPONDENTS WHO HAVE LIFE INSURANCE POLICY IN THEIR
NAME
TABLE 4:
Person who have life insurance policy
Yes
103
No
167
CHART 4:

ANALYSIS:
This graph shows that out of total 270 respondents only 103 or 38%
respondents have life insurance policy in their name. Rest all dont have a
single policy in their name. So there is a very big scope for life insurance
companies to cover these people. So in future business of life insurace will
gro further.
MARKET SHARE OF LIFE INSURANCE COMPANIES
TABLE 5:
LIFE INSURER
HDFC STANDARD LIFE
BIRLA SUN LIFE
AVIVA LIFE INSURANCE
BAJAJ ALLIANZ
LIC
TATA AIG
ICICI PRUDENTIAL
ING VYSYA
BHARTI AXA
OTHERS

CHART 5:

NUMBER OF POLICIES
4
3
6
7
55
6
12
6
2
2

Analysis:
In India, the largest life insurance company is Life Insurance Corporation of
India. It has been in existence in India since 1956 and is completely owned by
the Government of India. Today the organization has grown to 2048 offices
serving 18 crore policies and has a corpus of over 340000 crore INR.

ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

TABLE 6:

Premium paid (p.a.)

No. of respondents

Rs. 5000 - Rs. 10000

40

Rs. 10001 - Rs. 15000

26

Rs. 15001 - Rs. 24900

18

Rs. 25000 - Rs. 50000

10

Rs. 50001 - Rs. 60000

Rs.60001 - Rs. 80000

Rs. 80001 - Rs. 100000

CHART 6:
ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

Analysis:

From the chart above we find that, 39% of the respondents surveyed pay an
annual premium less than Rs. 10001 towards life insurance. 25% of the
respondents pay an annual premium less than Rs. 15001 and 17% pay an
annual premium less than Rs. 25000. Hence we can safely say that HDFC
SLIC would be able to capture

the

market better if

it introduced

products/plans where the minimum premium starts at Rs. 5000 per annum.
Only 19% of the respondents pay more than Rs. 25000 as premium and most
products sold by HDFC SLIC have Rs.12000 as the minimum annual premium
amount. They should introduce more products like Easy Life Plus and Safe
Guard where the minimum premium is Rs.6000 p.a. and Rs. 12000 p.a.
respectively. This would definitely increase their market share as more
individuals would be able to afford the policies/plans offered.

POPULAR LIFE INSURANCE PLANS

TABLE 7:

Type of Plan

No. of Respondents

Term Insurance Plans

105

Endowment Plans

122

Pension Plans

16

Child Plans

Tax Saving Plans

19

CHART 7:
POPULAR LIFE INSURANCE PLANS

Analysis:
From the chart given above we can clearly see that 45% of the respondents
hold endowment plans and 39% of the respondents hold term insurance
plans. Endowment plans are very popular and serve two purposes life cover
and savings.
If the policy holder dies during the policy term the nominee gets the death
benefit that is, sum assured and accumulated bonus. On survival the policy
holder receives the survival benefit with a bonus.
A term plan is a pure risk cover plan wherein the insured pays a lower
premium for a higher sum assured. Term insurance is the cheapest form of
insurance and helps the policy holder insure himself for a relatively low
premium. For the returns sensitive investor term plans do not find favor as
they do not offer a return in case the individual does not die during the policy
term.

AWARENESS OF UNIT LINKED INSURANCE PLANS

TABLE 8:
Awareness of Unit Linked Plans

No. of Respondents

Yes

154

No

116

CHART 8:
AWARENESS OF UNIT LINKED INSURANCE PLANS

Analysis:
From the chart given above we find that 57% of the respondents are aware of
unit linked life insurance plans and 43% are not aware of such plans. These
plans should be promoted through advertising. The company can advertise
through television, radio, newspapers, bill boards and pamphlets. This would
increase awareness and arouse curiosity in the minds of the consumer which
would enable the company to market its products more effectively.
Unit linked plans 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 a customer would get
would depend on the unit price when they pay the premium.

When the policy matures the individual gets his fund value. The value of his
fund is calculated by multiplying the net asset value and number of units held
by them on that day.

CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

TABLE 9:

Willingness to spend on premium

No. of respondents

Percentage

Less than Rs. 6,000

41

15%

Rs. 6,001 - Rs. 10,000

73

27%

Rs. 10,001 - Rs. 25,000

110

41%

Rs. 25,001 - Rs. 50,000

41

15%

Rs. 50,001 - Rs. 1,00,000

2%

CHART 9:
CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

Analysis:
From the graph above, we can clearly see that 41% of the respondents would
be willing to spend between Rs. 10001 Rs. 25000 for life insurance. 27 %
would be willing to spend between Rs. 6001 Rs. 10000 per annum. Only
15% would be willing to spend more than Rs. 25000 per annum as life
insurance premium.
We could say that the maximum premium payable by most consumers is less
than Rs. 25000 p.a. This is further reduced as most customers have already
invested with LIC, ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.
HDFC SLIC is faced with a large amount of competition. There are 18
insurance companies in India inclusive of LIC. Hence to capture a larger part
of the market the company could introduce more reasonable plans with lesser
premium payable per annum.

CHART SHOWING IDEAL POLICY TERM

TABLE 10:
Ideal policy term

No. of respondents

3 - 5 years

51

6 - 9 years

41

10 - 15 years

95

16 - 20 years

38

21 - 25 years

24

26 - 30 years

More than 30 years

Whole life Policy

13

CHART 10:

CHART SHOWING IDEAL POLICY TERM

Analysis:
From the chart given above it can be seen that 35% of the respondents prefer
a policy term of 10 15 years, 19% prefer a term of 3 5 years and 15%
prefer a term of 6 9 years. This means that HDFC SLIC could introduce more
plans wherein the premium paying term is less than 15 years.
The outlook of insurance as a product should be changed from something
which you pay for your whole life (whole life policy) and do not receive any
benefit (the nominee only receives the benefit in case of your death) to an
extremely useful investment opportunity with the prospects of good returns
on savings, tax saving opportunities as well as providing for every milestone
in your life like marriage, education, children and retirement.

FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE INSURANCE

TABLE 11:

Parameter
Advertisements
High returns
Advice from friends
Family responsibilities
Others

No. of Respondents
35
84
46
89
16

CHART 11:

Analysis:
From the chart above it can be seen that 33% of the respondents purchase
life insurance to secure their families, 33% take life insurance to get high
returns, 17% purchase insurance on the advice of their friends and 13%
purchase insurance because of the influence of advertisements.
The main purpose of insurance is to cover the financial or economic loss that
occurs to the family in case of the uncertain death of the policy holder. But
now a days this trend is changing. Along with protection (life cover), a
savings element is being added to insurance.
With the introduction of the new unit linked plans in the market, policy
holders get the option to choose where their money will be invested. They

can invest their money in the equity market, debt market, money market or a
combination of these. The debt and money markets usually have low risk
attached whereas the equity market is a high risk investment option.
PREFERRED COMPANY TYPE OF THE RESPONDENTS
TABLE 12:
Type of Company

No. of Respondents

Percentage

Government Owned Company

127

47%

Public Limited Company

62

23%

Private Company

49

18%

Foreign Company

32

12%

CHART 12:
PREFERRED COMPANY TYPE OF THE RESPONDENTS

Analysis:
From the graph above we find that 60% of the respondents preferred to
purchase insurance from a government owned company, 29% of the

respondents preferred to purchase insurance from a public limited company

and only 4% of the respondents preferred a foreign based company. Heavy
advertising through television, newspapers, magazines and radio is required.
MINIMUM EXPECTED RETURN ON INVESTMENT
TABLE 13:
Expected Returns

No. of respondents

Less than 5%

5% - 10%

39

11% - 15%

46

16% - 20%

49

21% - 25%

46

26% - 30%

27

31% - 40%

22

41% - 50%

14

More than 50%

22

CHART 13:

Analysis:
From the chart above it can clearly been seen that 18% of the respondents
would like 16 20% returns, 17% would like returns between 21 25% and

17% would like returns of 11 15% on their investments. Therefore the

average return on investment should be at least 16 20 %.
Most consumers are willing to adapt to some amount of risk but still want
some guaranteed returns. Therefore the bulk of investment should be made
in the balanced fund with 50% debt and 50% equity. The returns on the
Secure Fund are guaranteed as these involve investment is government
securities and the debt market. But the returns on these instruments are low
(8 10%). If the company invests in shares, returns are higher (39%) but
correspondingly risk borne by the policy holder is also higher. Therefore a
good combination of the two instruments is often a wise choice.

CHAPTER X
FUTURE LINE OF
RESEARCH

FUTURE LINE OF RESEARCH

The future topics for research in the organization could be setting up of an
appropriate ad campaign. It is very vital to the companies success that the
people of India know about HDFC SLIC, its products and their special features
and how insurance in general can help them in their future. The
advertisements have to be emotionally appealing. They might also include a
celebrity. The brand name of HDFC could be used to give a push to HDFC SLIC
and its products. The general perception of insurance as inauspicious
should be done away with and individuals and corporations accept insurance
on power with other investment opportunities.

The other area of research could be in the management of funds HDFC SLIC
possesses and how it can maximize returns for its investors. A research
project could be undertaken on how to ensure that the money gets invested
in the right companies and earns a medium high return on investment.
Another area of research could be an analysis of the sales and marketing
techniques used by HDFC SLIC. A large number of changes could be
introduced and this would help in saving operating costs and improving the
efficiency of the firm.

CHAPTER XI
CONCLUSION

CONCLUSION
HDFC standard life insurance is first life insurance company in India. It has
businesses spread out across the globe. It was registered on 23 rd December
2000. It currently ranks number 4 amongst the insurers in India (Source:
annual premium provided by the company)
The company faces a large amount of competition. To sustain itself it must
promote its products through advertising and improve its selling techniques.
Consumers must be aware of the new plans available at HDFC SLIC. The
medium of advertising used could be television since most of its competitors
use this tool to promote their products. The company must be promoted as
an Indian company since consumers seem to have more trust in investing in
Indian firms.
The unit linked concept must be specifically promoted. The general
perception of life insurance has to change in India before progress is made in
this field. People should not be afraid to invest money in insurance and must
use it as an effective tool for tax planning and long term savings.
HDFC SLIC could tap the rural markets with cheaper products and smaller
policy terms. There are individuals who are willing to pay small amounts as
premium but the plans do not accept premiums below a certain amount. It
was usually found that a large number of males were insured compared to
females. Individuals below the age of 30 (mostly male) were interested in
investment plans. This was a general conclusion drawn during prospecting
clients.

REFERENCES
www.hdfcslic.com
www.tata-aig-life.com
www.irdaindia.com
www.lic.com
www.money control.com
www.bajajallianz.com
www.icici.prulife.com
Magazine
Insurance World
The Outlook Money
Secrets of Successful Insurance Sales by Mr. Jack Kinder

A SURVEY ON INSURANCE INDUSTRY

Dear Sir/Madam,
I am a student of Aravali Institute of Management, Jodhpur. As part of the
requirements for my Post Graduation Diploma in Management I am required
to do a research based project. Kindly spend a few minutes of your valuable
time and fill in this questionnaire.
Do you have a life insurance policy/investment
plan in your name?
o

Yes

No

If yes which companys insurance policies do

you hold?
o Aviva
Life
o HDFC Standard
Insurance
Life Insurance
o Bajaj Allianz Life
o Birla Sun Life
Insurance
Insurance
o LIC
o Tata AIG Life
o ING Vysya Life
Insurance
Insurance
o ICICI Prudential
o Bharti Axa Life
Life Insurance
Insurance
o Others (specify name)
What is the approximate premium paid by you
annually (in Rupees)?
o
o
o
o
o

Rs. 5,000 Rs.

o Rs. 50,001 Rs.
10,000
60,000
Rs. 10,001 Rs.
o Rs. 60,001 Rs.
15,000
80,000
Rs. 15,001 Rs.
o Rs. 80,001 Rs.
25,000
1,00,000
Rs. 25,001 Rs.
50,000
More than Rs. 1,00,000 (specify premium)

What kind of insurance policy would suit you

best in your current stage of life?
o
o

Life Insurance
Life
Insurance
and Investment
Plans

o
o

Pension Plans
Child Plans

Tax saving plans

Are you aware of the new

insurance plans in the market?
o

Yes

unit

linked

No

How much would you be willing to spend per

annum
if
you
were
to
go
for
an
investment/insurance plan?
Less than Rs.
o Rs. 25,001 Rs.
6,000
50,000
o Rs. 6,001 Rs.
o Rs. 50,000 Rs.
10,000
1,00,000
o Rs. 10,001 Rs.
o More than Rs.
25,000
1,00,000
Which according to you is an ideal policy
term? (Number of years you would be willing
to pay premium)
o

o
o
o
o

3 to 5 years
6 to 9 years
10 to 15 years
16 to 20 years

o
o
o
o

What
motivates
you
insurance/investment plans?
o
o

Advertisements
High Returns

to
o
o

21 to 25 years
26 to 30 years
More than 30
years
Whole life policy
purchase

Advice
from
friends
Family
responsibilities

Others (specify)

In which kind of company would you prefer to

make a purchase of insurance?
o
o

Government
owned
company
Public Limited
Company

o
o

Private
Company
Foreign based
company

Typically what kind of returns would you look

at from your investments? (Please note:
Higher returns involve greater risk)
o
o
o
o
o

Less than 5%
6% - 10 %
11% - 15 %
16% - 20 %
21% - 25%

o
o
o
o

26% - 30%
31% - 40%
41% - 50%
More than 50%

Personal Details:
Name:
Address:
Age:
Profile of
respondent:
Student
Housewife
Working
Professional
Date:

Contact No. :

Business
Self Employed
Government
Service
Employee