A study on investment modes with reference to HDFC LIFE

A project report Submitted to Jawaharlal Nehru Technological

University, Kakinada In partial fulfillment of the Requirements for the awarding the degree in

MASTER OF BUSINESS ADMINISTRATION Submitted by

S.Chandrasekhar Reddy (REGD. NO. 10ME1E0009)

Under the esteemed guidance of (Mr. B.Vamsi Krishna, B.Com, MBA, (PhD) (Assistant. professor)

Department Of Management Studies RAMACHANDRA COLLEGE OFENGINEERING

(Affiliated to JNTU, Kakinada, Approved by AICTE, New Delhi) NH-5 Bypass Road, Vatluru (Village), Eluru, W.G.Dt- A.P 2010-12

DECLARATION
I, hereby declare that, this project report titled - A STUDY ON INVESTMENT MODES in

HDFC LIFE, is a bonafide work done and submitted to the

JNTU, Kakinada & Department of Management Studies, Ramachandra College of Engineering is an original work carried out by me and is not submitted to any other purpose or published any time before. The information & findings of this report are based upon the information collected by me during the study period.

Place: ELURU Date:

S.Chandrasekhar Reddy

Roll no: 10ME1E0009

CERTIFICATE
This is to certify that, the Project entitled A STUDY ON INVESTMENT MODES IN HDFC LIFE submitted by S.Chandrasekhar Reddy, as partial fulfillment of the requirements for awarding a degree in MASTER OF BUSINESS ADMINISTRATION, from Jawaharlal Nehru Technological University, Kakinada, under the guidance and supervision of

Sri.B.Vamsikrishna, Asst. Professor, DEPARTMENT OF MANAGEMENT STUDIES, RAMACHANDRA COLLEGE OF ENGINEERING, VATLURU, ELURU, for the year 2010-2012.

Project guide

HOD

Principal

___________________________________________________________
Ph: 08812-215 150, 152, Fax: 08812-234 128 email: rcee_elr@yahoo website: rcee.ac.in

COMPLEATIONCERTIFICATE
ACKNOWLEDGEMENTS
I take this opportunity to express my regards to Dr. P.Bala Krishna Prasad, B.Tech (CSE), M.Tech (CSE), Ph.D (CSE), Principal of Ramachandra College of Engineering, Vatluru, Eluru, for his encouragement during the period of my MBA programme and permission to do this project work. I also express my happiness for being a student of the Management Studies Department in RCE and co-ordinate under the guidance of Prof. M. Murthy Bharat, Head of the Department of Management Studies, for his valuable suggestions and encouragement, guiding me at every stage for successful completion of this project. I really appreciate all the support and help extended by my project guide Mr. B.Vamsi Krishna, Assistant Professor in Ramachandra College of Engineering. I have enjoyed the course for the project. I thank Mr. , MD (FINANCE), in HDFC LIFE, for permitting me to do the

project work over there and the support offered to me throughout the project work.

S.Chandrasekhar Reddy

CONTENTS OF FINAL PROJECT REPORT

Unit - I INTRODUCTION Brief discussion about the project Objectives Need Scope Limitations

Unit II RESEARCH METHODOLOGY Methodology of study Research Research Methodolog y Research Process Unit III INDUSTRY PROFILE Origin and Evolution Unit IV COMPANY PROFILE History Organizational Structure Vision & Mission Objectives & Motto Symbol Slogan Role of Board Directors Role of CEO Share Holders Products Head quarters, Branches, Manufacturing units & Subsidiaries Financial Performance review Recruitment procedure & Staffing Commercializati on World context Indian context SWOT Analysis Recent trends Importance Types of data Primary Data Secondary Data Data Collection Methods Sampling Process Sample Sampling Types of sampling

How employees are motivated & their Nos

Social Responsibility Achievements

Competitor

Unit V THEORETICAL FRAME WORK Meaning of title of study Description Definition

Unit VI ANALYSIS & INTERPRETATIONS Description about the most important points of coverage during research Analysis (Question wise) Question Tabular Form Inference Chart

Unit VII FINDINGS & SUGGESTIONS Unit VIII CONCLUSION & BIBLIOGRAPHY Details of Books, Authors, Publishers & Editions Details of Journals, Magazines, Articles Details of Websites, Authors, Articles & Dates

ANNEXURE Questionnaire Annual Reports Brochures

It is to inform all the Final MBA Students to note down the contents of the project report to
be maintained for the submission at the end of the MBA program. Students are instructed to collect & keep the above mentioned things in line as early as possible for the easy proceedings of the final project. Students who got submitted of the mini project reports need to get it signed by the HOD and can collect project permission letters from the department.

CONTENTS
Title Page Declaration College Certificate Company Certificate Acknowledgement CHAPTER-1 Introduction CHAPTER-2 Research Methodology CHAPTER-3 Industry Profile CHAPTER-4 Company Profile CHAPTER-5 Theoretical Framework CHAPTER-6 Analysis and interpretation CHAPTER-7 Findings and Suggestions APPENDIX Bibliography Financial Statements

UNIT-1 INTRODUCTION

INTRODUCTION Brief discussion about the project

There are many different definitions of what investment and investing actually means. One of the simplest ways of describing it is using your money to try and make more money. This can happen in many different ways. All investors are different. The common factor is that you would like to invest money to aim to make it grow or to receive a regular income from it. We would like to show you that choosing the most suitable investment for you does not need to be difficult. All you need is the right help along the way. The act committing money or capital to an endeavor with the expectation of obtaining an additional income or profit is known as investment. Investing means putting your money to work for you. Savings form an important part of the economy of any nation. With the savings invested in various options available to the people, the money act as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable for an ordinary man to invest his savings. The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future, this is called investment. One needs to invest and earn return on your idle resources and generate sum of money for a specific goal in life and make a provision for an uncertain future. One of the important reasons why people need to invest wisely is to meet the cost of inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live. Inflation causes money to lose value because it will not buy the same amount of good or service in the future as it does now or did in the past. The sooner one starts investing the better .by investing early you allow your investments more time to grow, where by the concept of compounding increases your income ,by accumulating the

principal and the interest or dividend earned on it, year after year. The golden rules for investors are: Invest early Invest regularly Invest for long term and not for short term Funding Future Goals through Insurance A wide range of vehicles are available to fund future financial goals. These could be low risk-low return instruments like bank deposits and small savings, or higher risk products such as equity, which can offer potentially higher returns. Insurance scores over other investment vehicles in the following aspects: Certainty Once a goal has been identified and a value for it has been crystallized, an insurance policy is an excellent vehicle to fund the goal. This is because one can rest assured that even in the unfortunate event of death or even critical illness, the sum assured will fund a future goal of the policyholder. Tax efficient Maturity benefits of most insurance policies are tax free under Section 10 (10D) and the premium paid is eligible for deduction under Section 80C of the Income Tax Act, 1961. Flexibility Insurance products, especially Unit Linked Plans, provide flexibility in terms of asset allocation to suit specific risk appetites, policy durations, premium payment terms and fund switching options. Wider options Depending on the time horizon of the goal, the return required and the investor's risk appetite, a broad spectrum of asset allocations between equity and debt is possible in a Unit Linked Plan. An investor may tailor his policy to suit his requirement.

Liquidity Most Insurance products offer good liquidity after the lock-in period to take care of any emergency requirement of funds. But they do have inherent deterrents in the form of charges to discourage unnecessary encashment. Earmarking Very often an insurance policy is taken for a specific goal. This therefore can become a deterrent against utilizing these funds for any other purpose and also encourages continued contributions.

OBJECTIVES OF THE STUDY

To analysis the Investment &tax planning modes of hdfc life. To Finding direction and meaning in one's financial decisions To know each individual how much paying income tax average per year. To know each individual how decisions taking to get tax benefit. To Understanding how each financial decision affects other areas of finance

NEED OF THE STUDY

The need of the study is to knowing all the relevant information about the company insurance product and policies and its competitors insurance products. It is use full to know the perception of the people about insurance, what they desire from it, and if they will work as financial consultant than what they want from the organization.

SCOPE OF STUDY
This project will help to understand the current market scenario and marketing in stiff competition. To find out the competitive edge of the company over the competitors

The study enables to have a better knowledge of investing options available in hdfc life. The study highlights some of the most important investing options available with hdfc life. It gives an overview of pros and cons of investing in different avenues and also helps in choosing best from them.

LIMITATIONS
People were not interested in listening to issues like life insurance even if they were not insured. Most of the people are of the thought that private life insurance company will not Assure tax benefit. After carrying out fieldwork, it was identified that many people do not give their Correct contact numbers or reference for feedback. Professionals like Doctors, Engineers, and Chartered Accountants do not see it as Prestigious profession and perceive it as a marketing job. Lack of proper database affected the search work. Due to short time period I cannot reach to each segment of Taxpayer.

Unit-2 RESEARCH METHODOLOGY

RESEARCH DESIGN AND PROCESS In the most elementary sense, the design1 is the logical sequence that connect the empirical data in the studys initial research questions and ultimately, to its conclusions. The research design is much more a than a work plan. There are three types of research designs, namely: a) Exploratory (b) Descriptive, Exploratory Research: Exploratory research is conducted when the researcher does not know how and why a certain phenomenon occurs, for example, how does the Taxpayer evaluate the quality of a bank, hotel or an airline? While in the case of a manufactured Tax scheme, quality is assessed on the basis of tangible features, replacement policy, warranty, and so forth in the case of Tax schemes, there are no tangibles. To understand this phenomenon, several researchers have conducted focus group discussions to identify these quality parameters. For example, Zeithaml, Parsuraman and Berry identified variables which they clubbed under five groups. In doing so, they used focus groups. Since the prime goal of an exploratory research is to know the unknown, this research is unstructured. Focus groups, interviewing key Taxpayer groups, experts and even search for printed or published information are some common techniques. Descriptive Research: Descriptive research is carried out to describe a phenomenon or market characteristic. For example, a study to understand buyer behavior and describe characteristics of the target market is a descriptive research. Continuing the above example of Tax beneficial schemes quality, a research done on how Taxpayers evaluate the quality of competing Tax beneficial schemes institutions can be considered as an example of descriptive research. Likewise, research done on media habits and TV viewing habits is an illustration of descriptive research. Generally, descriptive research is carried out only when the researcher understands the phenomena or behavioral characteristics.

TYPES OF DATA Primary data The primary data was collected by asking the consumers who come to the authorized hdfc life insurance branches for the Investment modes and also the new Taxpayers of the hdfc life insurance to fill up the questionnaires by me. It is a very important part of the project as it is only through the properly filled up questionnaires that I can reach to any conclusion from the data which I got from the questionnaires. Secondary dataSecondary data are the information which is attained indirectly. They are the data collected by someone else and which has already passed through statistical process. There exist two sources of secondary data. they are Internal sources External sources This research combines both secondary and primary data to achieve research objectives. Research tools used Personal interview Direct Invitation to the Office Questionnaires method

DATA COLLECTING METHODS Primary data Questionnaire, Interview. Secondary data Directory, Data base from college. SAMPLING PROCESS Sample Sampling Issues Sampling may be defined as the selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made It is the method of obtaining information about a complete population by examining

only a part of it. In this research work, the approach has been made to draw inferences based on samples taken from the Indian population. Since India is the second largest populated country in the world so it is next to impossible to take the data from even a part of its population. Hence it is best to adopt the Sampling method. That is why the sample data will enable us to estimate the population parameters. Here care has been taken to select the sample so that it should be truly representative of population characteristics without any bias as a result that it may outcome in valid and reliable conclusions Sampling Selecting a Sampling Procedure According a researcher should first choose between using a Bayesian procedure and a traditional sampling procedure. Types of sampling Non-probability samplingConvenience SamplingNon-probability samplingAccording to in probability sampling, the theory of probability allows the researcher to calculate the nature and extent of any biases in the estimate and to determine what variation in the estimate is due to the sampling procedure. Convenience Sampling- To obtain information quickly and inexpensively, a convenience sample may be employed.

Unit -3 INDUSTRY PROFILE

ORIGIN AND EVOLUTION

HISTORY OF LIFE INSURANCE The business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefit may be an income or in some other form. It is a benefit because it meets some of his needs. The benefit may be an income or in some other form. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benefits. Every asset is expected to last for a certain period of time during which it will period of time during which it will provide the benefits. After that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last forever. The owner is aware of this and he can so manage his affairs that by the end of that period or life- time, a substitute is made available. Thus, he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it incapable of giving the benefits. We can classify insurance in these terms:Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The risk can sometimes be avoided, through better safety and damage control measures. It only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. They are the ones who benefit from the asset and therefore, would lose, when the asset is damaged. Insurance compensates for the losses- and that too, not fully. In conclusion we can say that the scope of insurance is very broad and specific because it reduces the losses and risk of owner of the assets due to perils. It also gives supports to the person in the period of adverse situation. It insured economic consequences. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in past, plus interest. Insurance has no

substitute and one more thing about the insurance is that this is not similar to a hire purchase scheme. In the event of death, the balance installments are not excused. They have to be paid by the surviving family. There is a tax benefits, both in income tax and in capital gains. Marketability and liquidity are better. Life insurance is not only the best possible way for family protection there is no other way. The term of life is hard but the terms of insurance are easy.

INDIA -THE NEXT INSURANCE GAINT Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion And 3rd largest in terms of purchasing power parity. With factors like a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is on the fulcrum of an ever increasing growth curve. Insurance is one major sector which has been on a continuous growth curve since the revival of Indian economy. Taking into account the huge population and growing per capita income besides several other driving factors, a huge opportunity is in store for the insurance companies in India. According to the latest research findings, nearly 80% of Indian population is without life insurance covering while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subjected to weak social security and pension systems with hardly any old age income security. As per our findings, insurance in India is primarily used as a means to improve personal finances and for income tax planning; Indians have a tendency to invest in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small--4-5%. This in itself is an indicator that growth potential for the insurance sector is immense. Its a business growing at the rate of 15-20% per annum and presently is of the order of $47.9 billion. India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players

backed by foreign expertise, Indian insurance market has become more vibrant. Competition in this market is increasing with companys continuous effort to lure the customers with new product offerings. However, the market share of private insurance companies remains very low -- in the 10-15% range. Even to this day, Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government still dominates the market, with price controls, limits on ownership, and other restraints. Major Driving Factors => Growing demand from semi-urban population => Entry of private players following the deregulation => rising demand for retirement provision in the ageing population => The opening of the pension sector and the establishment of the new Pension regulator => Rising per capita incomes among the strong middle class, and spreading affluence => Growing consumer class and increase in spending & saving capacity => Public private partnerships infrastructure development => Dearth of innovative & buyer-friendly insurance products => Success of Auto insurance sector Emerging Areas => Healthcare Insurance & Pension Plans => Mutual fund linked insurance products => Multiple Distribution Networks .i.e. Banc assurance The upward growth trend started from 2000 was mainly due to economic policies adopted by the then Indian government. This year saw initiation of an era of economic liberalization and globalization in the Indian economy followed by several reforms and long-term policies that created a perfect roadmap for the success of Indian financial markets. On the basis of several macroeconomic factors like increase in literacy rate & per capita income, decrease in death rate and unemployment, better tax rebates, growing GDP etc., we estimate that the Indian insurance sector will grow by

$28.65 billion and reach $76.54 billion by 2011 with a CAGR of 12.44% and a growth of 59.82%. The Indian life insurance market generated total revenues of $41.36 billion in 2007, thus representing a compound annual growth rate (CAGR) of 11.84% for the period spanning 2000-2007. Life insurance market had a growth of $22.46 billion within a period of 7 years with a growth rate of 118.24%. Estimated life premiums rose from INR 1, 470,800 million ($36.77 billion) in 2006 to INR 1, 301,540 million ($32.54billion) in 2005. We envisage that life premiums in 2011 will be $65.96 billion, a growth larger than they were in 2007. The performance of the market is forecast to accelerate, with an anticipated CAGR of 9.78% for the four-year period 2007-2011 expected to drive the market to a value of $65.96 billion by the end of 2011. There would be a growth of $24.6 billion i.e. 59.48% in the next 4 years. Non-life premiums in India were $6.53 billion in 2007. Gross written premium (GWP) in the Indian non-life insurance market reached a value of $5.75 billion in 2006, this representing an annual growth of 13.55% for the period spanning 20062007. Estimated non-life premiums rose from INR230 billion ($5.75 billion) in 2006 to INR261 billion ($6.53 billion) in 2007. We anticipate that non-life premiums will grow by a CAGR of 9.40% between 2007-2011. We are looking for non-life premiums to rise by $405 million over the five years to the end of 2011 with a growth rate of 62.02%. Insurance companies in India Insurance is a colossal sector in India that is growing at a speedy rate of 15-20%. The insurance sector is approximately 450 billion yet 70 percent of the population in India is not insured. This gives you a peek into the huge growth opportunity that exists for this segment. The insurance business in India mainly consists of two main players, the Life Insurance Corporation (LIC) and Life Insurance Corporation (GIC). Almost 100 divisional offices and 2000 branch offices are functional for LIC. As LIC caters to life insurance, health insurance, property and accident. Insurance it needs an increasing number of employees. Thus insurance companies in India are growing vertically and horizontally bringing growth and employment opportunities. The other player GIC undertakes motor, marine, personal accident and fire insurance. Moreover it has four subsidiaries a) HDFC Life Insurance, b) United India Insurance, c) New India

Assurance, and d) National Insurance. Insurance companies in India have a deeprooted history. It all began in 1818 when HDFC Life Insurance Company in Calcutta was established. From then on insurance was scattered across the country. It was an unorganized sector. Then in 1950, the entire insurance segment was nationalized. After achieving freedom, the insurance sector gained momentum. In 1956 the government of India consolidated 240 private life insurers and provident societies and this was how LIC came to life. The justification to the nationalization of the life insurers was that the government would reap the necessary funds that were required for industrialization. The Life insurance industry still remained in the hands of the private sector till 1972 and was then nationalized. LIC adds about 7 percent to the country's GDP. With IRDA's regulation not less than 15 percent of funds from the insurance companies are said to fill the coffers of infrastructure and social sectors. Thus they are Providing vital funds to the country's growth. Infrastructure of the country bears risks that are of a long-term character. They include political instability, geological hindrances, gestation period and illiteracy. The long term funds provided by Life Insurance of India not only cover these risks but also help securing a brighter future for the country. Besides infrastructure the insurance companies in India are vital for one's saving purpose. In the beginning insurance was looked at as a 'tax-benefit' investment. Slowly, however the mindset of the common man is changing. Life insurance is now looked on as investment vehicle. With the introduction of private players in the sector there has been more transparency and flexibility in the sector. Private players have procured almost 9 percent of the insurance segment even though the coveted policies like endowment and money back still lay with the government. Better Investment modes, individual attention and pure transparency have given the private sector an upper hand. But with a huge unorganized market in India yet to tap the insurance companies in India have a voluminous market to explore. BENEFITS FROM LIFE INSURANCE:

I. It is superior to traditional saving vehicles:

As well as providing a secure vehicle to build up saving s etc, its provides peace of mind to the policyholder. In the event of untimely death, of say the main earner in the family, the policy will pay out of the guaranteed sum assured, which is likely to be significant more than the total premiums paid. With more traditional savings vehicles, such as fixed deposits, the only return would be the amount invested plus any interest accrued.

ii. It encourages saving and forces thrift:

Once an insurance contract has been entered into, the insured has an obligation to continue paying premiums, until the end of the term of the policy, otherwise the policy will lapse. In other words, it becomes compulsory for the insured to save regularly and spend wisely. In contrast savings held in a deposit account can be accessed or stopped easily.

iii. It provides easy settlement and protection against creditors:

Once a person is appointed for receiving the benefits (nomination) or a transfer of rights is made (assignment), a claim under the life insurance contract can be settled easily. In addition, creditors have no rights to any monies paid out by the insurer, where the policy is written under trust. Under the Married Womens Property Act(M.W.Act), the money available from the policy forms a kind of trust, which creditors cannot claim on.

iv. It helps to achieve the purpose of the Life Assured:

If someone receives a large sum of money, it is possible that they may spend the money unwisely or in a speculative way. To overcome this, the person taking the policy can instruct the insurer that the claim amount is given in installments. For example, if the total amount to be received by the dependents is Rs. 2, 00,000 sayRs.50, 000 can be taken out as a lump sum and the balance paid out in smaller installments, say Rs. 5,000 per month.

v. It can be enchased and facilitates borrowing:

Some contracts may allow the policy can be surrendered for a cash amount, if a policyholder is not in a position to pay the premium. A loan, against certain policies, can be taken for a temporary period to tide over the difficulty; some lending institutions will accept a life insurance policy as collateral for a personal or commercial loan

vi. Tax Relief: The policyholders obtain Income Tax rebates by paying the insurance premium. The specified forms of saving which enjoy a tax rebate, under section 88 of the Income Tax Act, include Life Insurance Premiums and contributions to a recognized Provident Fund etc.

ROLE OF LIFE INSURANCE: Risks and uncertainties are part of life's great adventure -- accident, illness, theft, natural disaster - they're all built into the working of the Universe, waiting to happen. Rule 1: Life insurance as "Investment": Insurance is an attractive option for investment. While most people recognize the risk hedging and tax saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options, and this is besides the added incentives(read bonuses) offered by insurers. You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks, something that is missing in non-insurance products. In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before comparing with other schemes, you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings. In life insurance, unlike non-life products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term, the

amount invested as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured. Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF, your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50 per cent of the initial deposit only after 4 years. The same amount of Rs 10,000 can give you an insurance cover of up to approximately Rs 5-12 laky (depending upon the plan, age and medical condition of the life insured, etc) and this amount can become immediately available to the nominee of the policyholder on death. Thus insurance is a unique investment avenue that delivers sound returns in addition to protection Rule 2: Life insurance as "Risk cover: First and foremost, insurance is about risk cover and protection - financial protection, to be more precise - to help outlast life's unpredictable losses. Designed to safeguard against losses suffered on account of any unforeseen event, insurance provides you with that unique sense of security that no other form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial. Rule 3: Life insurance as "Tax planning": Insurance serves as an excellent tax saving mechanism too. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life of his/her children or adult children. The rebate I deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000.By paying Rs 60,000 a year, you can buy anything upwards of Rs 10 lakh in sum assured. (Depending upon the age of the insured and term of the policy) This means that you get an Rs 12,000 tax benefit. The rebate is deductible from the tax payable by an individual or a Hindu Undivided Family. Economic liberalizations in brief refers to the efforts taken by state toward faster economic development by adopting changes in existing economic policy, rules and

Regulations and bringing flexibility in administrative control and procedures economic liberalization encourage the use of new technology and improve knowledge in the production process by global participation and marketing. NEED FOR GLOBAL INTEGRATION: Recent economic liberalization started few years ago have started bringing in new investments from global giants and the government was hard pressed to facilitate global integration by lowering trade barriers for the free flow of technology, intellectual and financial capital. Additionally, reforms are essential if the Indian economy is to achieve and sustain a growth rate of 7 to 8 per cent per annum .Reaching a faster growth path also implies attracting foreign direct investment inflows of $ 10 Billion every year, up from the current level of $ 3 to $ 3.5 Billion. Thus liberalization of insurance creates an environment for the generation of longterm contractual funds for infrastructural investment.

Report on Infrastructure says that 85% of funds for infrastructure development have to come from the domestic industry. It further says that India would need $ 100 Billion over the next five years to meet its infrastructure needs. Given the rate of savings in India, there are much more room to grow and one can expect additional revenue of about $ 10 Billion a year entering the market to enhance infrastructure. Insurance is definitely going to be one area that will assist in mobilization of these funds. MULTINATIONALS' INTEREST: Multinational insurers are indeed keenly interested in emerging insurance because their home markets are saturated while emerging countries have low insurance penetrations and high growth rates. International insurers often derive significant part of their business from multinational operations. As early as 1994 Many of the UKs largest life and general insurers derived 40 per cent to 60 per cent their total premium from outside their home markets. The figure at Commercial Union was 76 per cent in that year. While the impact of global operations on their business may be large, typically foreign insurers take only a small share of an

individual countrys market. In Taiwan for example, foreign companies took only a 3 per cent share even seven years after opening up. In Korea, their share was 1 per cent after 20 years. In China, a large and complex market like India, private insurers have not made muchheadway.Yet, new entrants find insurance attractive because even a small share of a large and growing market can be profitable. The Korean insurance market for example, was only the 30th largest market in the world by premium volume in 1971.It moved up to 6th largest in 1996. In any case, in India multinational insurers will be restricted to a minority shareholding in new companies. The new entrants will therefore be private Indian companies. The other reason why these large MNCs are interested in India is the economies of the insurance market. Insurance companies survive on the principle of spreading of risk. No matter what the size of each player, an insurer cannot afford to operate in a niche market. Operating in a particular region would expose them to the economic downtrends in the region and derail their profits. Insurance companies, being long-term players, also have to avoid sudden dips in earnings to inspire confidence among investors to invest long-term funds. This can be achieved by spreading their operations over a wide geographical area. Moreover, for them, big is not just beautiful, but essential for survival. Which brings us to the avenues for growth? According to the Sigma report on global insurance brought out by the worlds second largest reinsurer Swiss Re - the international market is completely saturated. In the developed world, the growth in life insurance premium has been a meager 1.5%. As compared to this, LIC despite all its handicaps has been growing at healthy clip of around 20%

PRIVATIZATION: START UP STRATEGY: Potential private entrants therefore expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. Critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did until recently .This might seem a logical strategy from the point of view of new players. Start-up costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, in the long run 'middlemarket' offers the greatest potential as in terms of it is the second largest market in the world. This may still be an urban market but goes beyond the affluent segment.

Insurance, even more than banking, is a volume game. A very exclusive approach is unlikely to provide meaningful numbers. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped. REPOSITIONING BY NATIONALIZED SECTOR: Floodgates of competition opened up by the privatization of insurance industry did throw a challenge to the well-protected nationalized sector and it seems they have picked up the gauntlet. LIC and GIC, both are trying to reposition themselves behaving re-engineering done on the structure and operations of their respective organizations. Life Insurance Corporation is at present going through presentations from top management consultants. These consultants have been asked to narrate their experiences in countries where the insurance sector has been opened up for private competition so that the public sector player can draw lessons. Based on these, Lowell appoint a consultant which can provide them broad terms of reference on what changes are required to tackle the impending competition Life insurance not plays an important role in national economy but also in international economy. Marine cargo insurance provides risk coverage for shippers and the banks, which finance international trades. This role becomes all the more important in the context of an active government policy to encourage exports. Indian life insurer operates in more than 30 countries through agencies, branches, associates companies. These operations earn foreign exchange. The insurance business is concerned with North America, Western Europe, Japan and Oceania. Together these regions accounts for about 91 % of the world annul premium. By regions North America and western Europe are growing moderately while oceanic, Latin America, eastern Europe and Africa display growth above lone term trends to a global context globalization of life insurance helps companies practices underwriting discipline in one regions globalization of the insurance industry received big boost.

SWOT analysis
Strengths

2nd Largest in insurance sector in India Initial paid up capital: 150 Cores Present paid up capital: 8114 Core No of polices: 1 Million Premium: 1584 Cores Weaknesses

Non-government organization -people are having more faith on L.I.C. Not reachable to the village area still. Most of the people are of the thought that private life insurance company will not last for long and hence, they prefer to invest in Government undertaking Slightly less brand awareness for brand of HDFC Standard life. Opportunities

Biggest financial organization in India Over 76% people in India not insuranced Good infrastructure. Now days more peoples are conscious about the insurance. Threats

Now a days competition in this sector is more around 15 private players are in insurance sector. Each company is doing heavy marketing. People are taking more time to take the decision about the insurance

RECENT TRENDS IN INSURANCE SECTOR The life insurance business has come a long way since independence, and Indian consumers till recently had been dealing with one life insurance player, i.e., the LIC in the public sector. After the liberalization of the insurance sector, a dozen companies have entered the insurance business. The insurance sector had the reforms with the passing of IRDA bill in December, 1999. The rivatization process commenced by forming the Insurance Reforms Committee. The 12 private life insurers have already grabbed 9% of the market in terms of premium income. The insurance premiums of these 12 players have crossed Rs 1000 crore over the last year. Innovative Tax schemes, smart marketing and aggressive distribution, that is, the triple whammy combination has enabled fledgling private insurers to sign up Indian consumers. While the state owned companies still dominate segments like endowment and money back policies, the private companies have a virtual monopoly in the unit linked insurance schemes. Detariffing Recently, the IRDA has requested the Life insurance companies to initiate steps to ensure transition from tariff regime to detariff regime from January, 2007; accordingly, there is full detariffing of the Life insurance business from April 1, 2008. Tariff means rigidity. It means that not only rates are fixed, but also the terms and conditions of policies are to be laid down in tariff. Detariffing makes insurers free to decide the premium rates based on their own guidelines of pricing. Bancassurance The concept bancassurance is French origin. It is an emerging concept in India .Life assurance companies need immense distribution strength. This distribution will undergo a vast change when the insurance policies are available from local bank branch through bancassurance .In India, the sign of initial success is already there and the success of the scheme depends on banks ensuring excellent Taxpayer relationship.

Micro Insurance LIC launched its first micro insurance Tax scheme, captioned Jeevan Madhur in September, 2006. It launched its second micro insurance Tax scheme, under the caption Jeevan Mangal in September, 2009. The policy is targeted at factory workers, self help group members, domestic servants, rickshaw pullers and other low income people. The salient feature is a low minimum premium of Rs15 per week and the risk cover ranged from Rs 15, 000 to a Maximum of Rs 50, 000.

Unit -4 COMPANY PROFILE

HISTORY
HDFC Life, one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc, the leading provider of financial Investment modes in the United Kingdom. HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. HDFC Life's Tax scheme portfolio comprises solutions, which meet various Taxpayer needs such as Tax planning, Pension, Savings, Investment and Health. Taxpayers have the added advantage of customizing the Investment modes, by adding optional benefits called riders, at a nominal price. The company currently has 29 retail and 5 group Tax beneficial schemes in its portfolio, along with five optional rider benefits catering to the savings, investment, Tax planning and retirement needs of Taxpayers. HDFC Life continues to have one of the widest reaches among new insurance companies with more than 500branches servicing Taxpayer needs in over 700 cities and towns. The company has a strong base of Financial Consultants. HDFC Standard Life is a strong, financially secure business supported by two strong and secure promoters - HDFC Ltd and Standard Life. HDFC Ltd's excellent brand strength emerges from its unrelenting focus on corporate governance, high standards of ethics and clarity of vision. Standard Life is a strong, financially secure business and a market leader in the UK Life & Pensions sector. Our brand has managed to set a new standard in the Indian life insurance communication space. We were the first private life insurer to break the ice using the idea of self-respect instead of 'death' to convey our brand proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that Taxpayers recognize, like and prefer to do business. Moreover, our brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.

We follow a conservative investment management philosophy to ensure that our Taxpayer's money is looked after well. The investment policies and actions are regularly monitored by a formal Investment Committee comprising non-executive directors and the Principal Officer & Executive Director.

VISION & MISSION

OUR 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'. OUR VALUES Values that we observe while we work:

Integrity Innovation Taxpayer centric People Care "One for all and all for one" Team work Joy and Simplicity

OBJECTIVES & MOTTO -HDFC

Standard Life is a strong, financially secure

business supported by two strong and secure promoters - HDFC Ltd and Standard Life. HDFC Ltd's excellent brand strength emerges from its unrelenting focus on corporate governance, high standards of ethics and clarity of vision. Standard Life is a strong, financially secure business and a market leader in the UK Life & Pensions sector.

SYMBOL

SLOGAN Sar Utha Ke Jiyo!

ORGANISATION STRUCTURE

MD ZONAL

REGINOL

RETAIL TERITORY BRANCH MANAGOR ASST.B.M BUSSENISS DEV.MGR

ALTERNATIVE TERITORY BRANCHMANAGER CHANNEL

OPERATION TEAM MANAGER OPERATION

HUMAN HR EXECUTIVE

SALES .DEV. MGR

ROLE OF BOARD OF DIRECTORS

Brief profile of the Board of Directors 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. Keki M Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Managing Director of HDFC Limited. He joined HDFC Limited in 1981 and became an Executive Director in 1993. He was appointed as its Managing Director in November, 2000. Mr. Mistry is a Fellow of the Institute of Chartered Accountants of India and a member of the Michigan Association of Certified Public Accountants. Mr. Alexander M Crombie joined the Board of Directors of the Company in April, 2002. He has been with the Standard Life Group for 34 years holding various senior management positions. He was appointed as the Group Chief Executive of the Standard Life Group in March 2004. Mr. Crombie is a fellow of the Faculty of Actuaries in Scotland. Ms. Marcia D Campbell is currently the Group Operations Director in the Standard Life group and is responsible for Group Operations, Asia Pacific Development, Strategy & Planning, Corporate Responsibility and Shared Services Centre. Ms. Campbell joined the Board of Directors in November 2005. Mr. Keith N Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co. holding the positions of UK Economist, Chief Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director International Equities. He was also responsible for Economic and Investment Strategy

research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005. Mr. Gautam R Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International, an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investments to and from India. Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002 was a Partner & VicePresident at Bain & Company, Inc., Boston, where he led the worldwide Utility Practice. He was also Director, Corporate Business Development at General Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences. Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. Mr. Ravi Narain was a member of the core team to set-up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI). 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. Ms. Renu S. Karnad is the Executive director of HDFC Limited, is a graduate in law and holds a Master's degree in economics from Delhi University. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000. She is responsible for overseeing all aspects of lending operations of HDFC Limited.

SHARE HOLDERS

As at Dec 2011 Number of Shares Promoters Indian Foreign Others Total 1,443,733,842 518,668,824 32,477,430 1,994,880,096 72.37% 26.00% 1.63% 100.00%

as at dec 2010 % of Holding

as at Mar 2011 % of Holding

Number of Shares % of Holding Number of Shares

1,437,877,600 515,191,733 29,564,000 1,982,633,333

72.52% 25.99% 1.49% 100.00%

1,443,733,842 518,668,824 32,477,430 1,994,880,096

72.37% 26.00% 1.63% 100.00%

MARKET SHARE HDFC LIMITED. HDFC is Indias leading housing finance institution and has helped build more than 23,00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr. As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors. Rated AAA by CRISIL and ICRA for the 10th consecutive year Stable and experienced management High service standards Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.

 Presented the Dream Home award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards.

Standard Life Group (Standard Life plc and its subsidiaries) The Standard Life group has been looking after the financial needs of customers for over 180 years It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs Its investment manager currently administers 125 billion in assets It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running . The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006

PRODUCTS Products of HDFC standard life insurance Individual Group Social

Individual Products

We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have a varied range of Products that you can choose from to suit all your needs. These will help secure your future as well as the future of your family. Protection Plans You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan. Investment Plans Our Single Premium Whole of Life plan is well suited to meet your long term investment needs. We provide you with attractive long term returns through regular bonuses. Pension Plans Our Pension Plans help you secure your financial independence even after retirement. Our Pension range includes our Personal Pension Plan, Unit Linked Pension, and Unit Linked Pension Plus Savings Plans Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children immediate and future needs. Our 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. We offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment. We now offer the following group products to our 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 The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member. 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 a 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

HEAD QUARTERS
HDFC LIFE INSURANCE COMPANY LIMITTED. Regd Office: Trade star, 2nd floor, a wing, adhere (east) Mumbai-400059, Helpline-022 67516666

BRANCHES &SUBSIDIARIES
Associate Companies Areas of operation

Helping Indians experience the joy of home ownership. The road to success is a tough and challenging journey in the dark where only obstacles light the path. However, success on a terrain like this is not without a solution. As we found out nearly three decades ago, in 1977, the solution for success is customer satisfaction. All you need is the courage to innovate, the skill to understand your clientele and the desire to give them your best. Today, nearly three million satisfied customers whose dream we helped realize, stand testimony to our success. Our objective, from the beginning, has been to enhance residential housing stock and promote home ownership. Now, our offerings range from hassle-free home loans and deposit products, to property related services and a training facility. We also offer specialized financial services to our customer base through partnerships with some of the best financial institutions worldwide.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.

HDFC Mutual Fund has been one of the best performing mutual funds in the last few years. HDFC Asset Management Company Limited (AMC) functions as an Asset Management company for the HDFC mutual fund.

AMC is a joint venture between housing finance giant HDFC and British investment firm Standard Life Investments Limited. It conducts the operations of the Mutual Fund and manages assets of the schemes, including the schemes launched from time to time. As of Aug 2006, the fund has assets of Rs.25, 892 crores under management. IN 2003, following a decision by the Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, to divest its asset management business in India, AMC had entered into an agreement with ZIC to acquire the asset management business. Consequently, all the schemes of Zurich Mutual Fund in India had been transferred to HDFC mutual fund and renamed as HDFC schemes.

Here is a list of mutual funds of HDFC which includes Equity Funds, Balanced Funds and Debt Funds.

HDFC Securities, a trusted financial service provider promoted by HDFC Bank and JP Morgan Partners and their associates, is a leading stock broking company in the country, serving a diverse customer base of institutional and retail investors. HDFCsec.com provides investors a robust platform to trade in Equities in NSE and BSE, and derivatives in NSE. Our website will support you with the highest standards of service, convenience and hassle-free trading tools.

Our research team tracks the economy, industries and companies to provide you the latest information and analysis. Our content offers financial information, analysis, investment guidance, news & views, and is designed to meet the requirements of everyone from a beginner to a savvy and well-informed trader.

HDFC Realty is a wholly owned subsidiary of HDFC. We have assisted individuals in acquiring homes valued at 5000 million rupees. HDFC is a pioneer housing finance institution in India and with over 30 years in operations has provided finance to over a million families in India. We are a team of real estate professionals facilitating Buying, Selling or Leasing of Residential / Commercial property. At HDFC Realty, we provide personalized attention to the individuals and corporate in their process of identifying properties. From understanding the requirement to organizing the site visits to completion of transaction, we make every effort to make the process of acquiring a property, hassle free and convenient. Other Companies

HDFC Trustee Company Ltd. GRUH Finance Ltd. HDFC Developers Ltd. HDFC Property Ventures Ltd. HDFC Ventures Trustee Company Ltd. HDFC Investments Ltd. HDFC Holdings Ltd. Credit Information Bureau (India) Ltd HDFC Securities HDB Financial Investment modes

FINANCIAL PERFORMANCE REVIEW

HDFC Standard Life, one of Indias leading private life insurance companies, declared its annual results for the financial year ending March 31, 2011. The company generated Total Premium Income of Rs. 5564.69 crores in FY2011registering a yearon-year growth of 15%. The growth was primarily driven by the companys structured Investment modes processes based on Taxpayer needs and their assessments, wide range of Tax scheme portfolio and diverse distribution network. Mr. Paresh Parasnis, Principal Officer and Executive Director, said, The financial year 2010-11 was a defining year with the unfolding of several unexpected events sharp correction in financial markets and a spread of recessionary trends. These events also had an impact on the Indian life insurance industry. We are happy that our new policies issued grew by 16% over the last year. However, given the uncertainty in the overall scenario, Taxpayers have reduced their annual premium commitment on new policies. At the same time, existing policies continued to be in force reflected in our renewal premium, which posted a healthy growth of 34%. In line with overall market conditions, growth in Effective Premium Income (EPI) in respect of retail business increased by 5%, growing from Rs. 2,425 crores in 2007-08 to Rs. 2,552 crores in 2010-11. HDFC Standard Life tracks its New Business Premium on the basis of Effective Premium Income (EPI). EPI is calculated by giving only a 10% value to a Single Premium policy and is an internationally accepted indicator of an insurance companys performance. HDFC Standard Life maintained its healthy pipeline of Tax beneficial schemes last year by launching 11 Tax beneficial schemes apart from slashing the premium rates of its Term Assurance Plan premium rates by about 25% across different age bands. Our entry into the health insurance market last year with the launch of two Tax beneficial schemes SurgiCare and Critical Care was a significant move in line with our business objective. The low penetration of health insurance in India gives us a tremendous opportunity to provide quality health insurance. Our health Tax beneficial schemes along our complete range of life insurance and pensions portfolio meet almost every aspect of an individuals requirements, Mr. Paresis added.

Highlights of Financial Year 2010-11 -- Total Premium Income is up by 15% at Rs. 5564.69 crores as against Rs. 4858.56 crores in FY2007-08. -- Renewal premium collected increased to Rs. 2913.58 crores from Rs. 2173.19 crores in the previous year, registering a growth of 34%. -- Effective Premium Income (EPI) in respect of retail business increased by 5%, growing from Rs 2,425 crores in 2007-08 to 2,552 crores in 2010-11. -- Alternate Channels, including bancassurance, contributed about 45% to the Effective Premium Income (EPI). -- A well balanced Tax scheme portfolio with pension comprising over 40% children Investment modes around 25% and the remaining constituting Tax planning and savings Investment modes, -- Total assets under management increased to Rs. 10,595 cores, registering a growth of 24% over FY2007-08. -- Assets under management for the Group business have increased to Rs. 1075 crores, registering a growth of 12% over FY2007-08. -- Company Tax beneficial schemes and Investment modes are now available through a network of 595 offices serving over 700 cities and towns across the country. This is further complemented by corporate agency relationships with public, private and cooperative banks. -- Strength of Financial Consultants reported year-on-year growth of 43% to over 2, 07,000 in FY2010-11 compared to 1, 45,000 last financial years. -- The sum assured in-force for 2010-11 was Rs. 57,158 crores as compared to Rs. 45,743 crores for the previous year. Towards improving the quality of training imparted, the company started an in-house training facility to cater to the mandatory training required to be given as well as for other Investment modes training requirements. The company has received accreditation from the Insurance Regulatory and Development Authority (IRDA) for

149 training centers housed in its branches. During the year, HDFC Standard Life also launched a three-month insurance and management programme in collaboration with Manipal Education to select, train, and groom talent from across the country and ensures a ready pool of insurance-trained Investment modes professionals for the company. HDFC Standard Life has revamped its corporate website (www.hdfcinsurance.com) in line with its communication philosophy. The new improved, interactive, and userfriendly website is in sync with its need-based communication strategy of helping individuals through their decision of selecting the right life insurance Investment modes that fit their needs. To meet the demands arising from the companys rapid growth, the promoters contributed an additional Rs. 525 crores of equity to take the paid-up share capital as on March 2009 to Rs. 1796 crores.

SOCIAL RESPONSIBILITY
We have all noticed in the last years the huge number of changes that took place in the social, political, economical and technological fields, phenomena that led to substantial changes including in the management practices of many small, medium and large companies. In this new trend can also be included the social responsibility phenomenon of different companies (including the insurance ones). This paper

explains that social responsibility implies the idea that insurance companies, along with their commercial activities, must be also involved in voluntary actions that do not generate an immediate benefit in terms of profits or other pecuniary earnings. At present, there is a real argue between the specialists regarding what really means to be a social responsible insurance company, if an insurer should be interested only in obtaining profits or its concerns should also take in consideration activities that generate global benefits for the entire society. Of course, there are many specialists that promote the social responsibility attitude and others that are against such behavior. From a brief analyze of the behaviors of different insurers, the conclusion that can be drawn is that each insurance companys attitude toward social responsibility can be one of the following: the reaction attitude, the defensive attitude, the adaptation attitude and the pro-active attitude. The present paper also presents, in

the final part, a short study-case regarding the way an insurance company engages in social responsibility actions. In fact, are presented the most important points from the social responsibility strategy of AIG (American International Group, Inc.), the worlds leader in the insurance sector. Social responsibility / attitudes / AIG / American International Group, Inc. . . . Definition of the Social Responsibility: Concept Social responsibility represents a relatively recent concept within the business communities, which promotes the idea of the companies voluntary involvement in activities that are not immediately intended to make a profit

ACHIEVEMENTS
Awards & Accolades Best Companies to Work for in India in 2010

HDFC Standard Life has been adjudged one of the Best Companies to Work for in India in 2010. The company participated in the Great Places to Work study for the first time and ranked first in the insurance category. It ranked 34th on the Top 50 Best Companies to Work for, in India 2010 list. The company was also awarded for its unique employee initiative - Mission in-Genius national quiz. The study has shown that HDFC Standard Life conscientiously develops employee talent programmers to keep engaging and motivating its employees. The company provides some unique platforms such as 'Mission in Genius' national quiz. The management is accessible to all at all times and sincerely seeks feedback from its employees through programmes such as 'Sparsh', the study said. The Best Companies to Work in India is a study conducted by the Great Place to Work Institute, India in partnership with The Economic Times. The 2010 edition

is the seventh study in India, which received overwhelming response from more than 400 companies, making it the largest such study in India. And only 50 companies made it to the Best Companies to Work list! 'YoungStar Super' Voted 'Tax scheme of the Year 2010'

HDFC Standard Lifes YoungStar Super has been voted Tax scheme of the Year 2010 in the 'Insurance' category by more than 100,000 consumers nationwide across 36 markets. YoungStar Super is a unit linked Children Plan with unique benefits such as bumper additions, double and triple benefits, attractive allocations rates, and seven different funds. The consumer study on Tax scheme innovation in India was conducted by A C Nielsen, the leading global research firm. Entries were accepted from Tax beneficial schemes that demonstrate innovation in their Tax scheme function, design, packaging or process or any other specified form. Entries were then filtered by a jury of distinguished industry professionals to ensure that the Tax beneficial schemes meet the innovation criteria before they were passed on to the consumer votes/survey round. Tax scheme of the Year is an Internationally Recognised Standard that celebrates and rewards the best innovations in consumer Tax beneficial schemes and Investment modes. The Tax scheme of the Year is selected through an independent consumer survey across the country in 26 countries for the past 20 years. Received CIO 'the Ingenious 100 2009' Award

HDFC Standard Life has received the CIO 'The Ingenious 100 - 2009 Award,' for ATLAS (Agency Training Licensing and Servicing System). Additionally, the company has received the CIO 100 'Security Award 2009' for pioneering LANDesk Management and Security Suite security implementation and taking its security to a higher level of technological excellence. HDFC Standard has received the CIO 100 Award for the third consecutive year. It had received the 2008 CIO Bold Award for Consultant Corner and CIO Security Award for our initiatives for a secure computing environment, including Sesame Identity and Access Management. In 2007, the company received CIO 100 award for Wonders and a Special Award in Storage category. CIO magazine has a long tradition of honoring leading companies for business and technology leadership and innovations through its flagship award program - CIO 100. It's a celebration of 100 organizations (and the people within them) that are using IT in innovative ways to deliver business value, whether by creating competitive advantage, optimizing business processes, enabling growth or improving relationships with Taxpayers. Received Diamond EDGE Award 2009

HDFC Standard Life has received the Diamond EDGE Award 2009 for its mobile workforce portal - Consultant Corner. EDGE - Enterprises Driving Growth and Excellence (using IT) is an initiative by the ,Network Computing magazine to identify, recognize, and honor end-user companies in India that have demonstrated the best use of technology to solve a business problem, improve business competitiveness, and deliver quantifiable ROI to stakeholders. Network Computing magazine is part of CMP Technology, which brings more than 100 IT media brands to more than 18 million technology and business decision makers worldwide. Hdfc k here to view the report Sept, 2008 Received 2008 CIO Bold 100 and CIO Security Awards

HDFC Standard Life has received the 2008 CIO Bold 100 Award. This annual award recognizes organizations that exemplify the highest level of operational and strategic excellence in information technology. This year's award theme, 'The Bold 100,' recognized those executives and organizations that embraced great risk for the sake of great reward. HDFC Standard Life has also been one of the five recipients of the Special 2008 CIO Security Award aimed at CIOs, whose pioneering implementations have taken their enterprise security to the next level. This award category identifies innovative and groundbreaking deployment of technologies aimed at creating a secure business infrastructure.

The company received the 2008 CIO Bold Award for its mobile workforce portal and the CIO Security Award for its initiatives for a secure computing environment, including identity management. May, 2008 Received PCQuest Best IT Implementation Award 2008 HDFC Standard Life received the PCQuest Best IT Implementation Award 2008 for Consultant Corner, the applications for its financial consultants, providing centralized control over a vast geographical spread for key business units such as inventory, training, licensing, etc. Read more about the 'Consultant Corner' tool in the ' HDFCSL's in News' Section. HDFC Standard Life has won the PCQuest Best IT Implementation Award for two years consequently. Last year, the company received the award for Wonders, its pathbreaking implementation of an enterprise-wide workflow system. March, 2008 Silver Abby at Goafest 2008 HDFC Standard Life's radio spot for Pension Investment modes won a Silver Abby in the radio writing craft category at the Goafest 2008 organised by the Advertising Agencies Association of India (AAAI). The radio commercial 'Pata nahin chala' touched several changes in life in the blink of an eye through an old mans perspective. The objective was drive awareness and ask people to invest in a pension plan to live life to the fullest even after retirement, without compromising on one's self-respect March, 2008 Unit Linked Savings Plan Tops Mint Best TV Ads Survey

The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the leading private insurance companies in India, has topped Mint's Top Television Advertisement survey conducted, for February 2008. HDFC Standard Life's 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. Hdfc k here to view the report February, 2008 Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007 Mr. Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life, received the QIMPRO Gold Standard Award 2007 in the business category at the 18th annual Qimpro Awards function. The award celebrates excellence in individual performance and highlights the quality achievements of extraordinary individuals in an era of global competition and expectations. January, 2008 Sar Utha Ke Jiyo Among India's 60 Glorious Advertising Moments HDFC Standard Life's advertising slogan honoured as one of '60 Glorious Advertising & Marketing Moments' over the last 60 years in India,' by 4Ps Business and Marketing magazine. The magazine said that HDFC Standard Life is 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. This was then, followed by others including ICCI Prudential, thus giving HDFC Standard Life the credit of bringing up one such glorious advertising and marketing moment in the last 60 years.

MAJOR COMPETITORS OF HDFC LIFE

Life Insurance Corporation of India (LIC) Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India (GIC) The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii)

Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been delinked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies. LIFE INSURANCE COMPANIES Max New York Life Insurance Co. Ltd. Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.

ICICI Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.

Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd. GENERAL INSURANCE 1. Royal Sundaram Alliance Insurance Company Limited The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 2. Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany. 3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001. 4. Cholamandalam General Insurance Company Ltd. Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag. 5. TATA AIG General Insurance Company Ltd. Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines. 6. Reliance General Insurance Company Limited. 7. IFFCO Tokyo General Insurance Co. Ltd 8. Export Credit Guarantee Corporation Ltd

UNIT -5 THEORETICAL FRAME WORK

MEANING OF TITLE OF STUDY

There are many different definitions of what investment and investing actually means. One of the simplest ways of describing it is using your money to try and make more money. This can happen in many different ways. All investors are different. The common factor is that you would like to invest money to aim to make it grow or to receive a regular income from it. We would like to show you that choosing the most suitable investment for you does not need to be difficult. All you need is the right help along the way. In a competitive marketplace where businesses compete for Taxpayers, Taxpayer Investment modes is seen as a key differentiator and increasingly has become a key element of business strategy. There is a substantial body of empirical literature that establishes the benefits of Taxpayer Investment modes for firms. Hdfclife -its tax schemes&investment modes Is a measure of how Tax benifitial schemesand Investment modes supplied by a company meet or surpass Taxpayer expectation. It is seen as a key performance indicator business and is part of the four perspectives of a Balanced Scorecard.

Wealth Pyramid
Financial independence brings with itself the responsibility of planning for your future. The best way to start - is to start from the beginning. If life was a pyramid, we all start at the bottom of it and move upwards, as our needs and responsibilities rise along with age.

The key to building a sound financial plan is to start with a solid and secure base. Insurance can help you ensure a sound and secure foundation by protecting your family, protecting your assets, protecting your health and most importantly protecting your dreams.

With evolution, insurance also offers you solutions to accumulate substantial savings and invest them for your future needs as wells as for your retirement.

TYPES OF INVESTMENT OPTIONS

A brief preview of different investment options is given below:

Equities: Investment in shares of companies is investing in equities.

Stocks can be brought/sold from the exchanges (secondary market) or via IPOs Initial Public Offerings (primary market). Stocks are the best long-term investment options wherein the market volatility and the resultant risk of losses, if given enough time, are mitigated by the general upward momentum of the economy. There are two streams of revenue generation from this from of investment. 1.Dividend: Periodic payments made out of the companys profits are termed as dividends.

2.Growth: The price of the stock appreciates commensurate to the growth posted by the company resulting in capital appreciation. On an average an investment in equities in India has a return of 25%. Good portfolio management, precise timing may ensure a return of 40% or more. Picking the right stock at the right time would guarantee that your capital gains i.e. growth in market value of stock possessions, will rise.

Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with fixed rate of interest on a specified date, called as the maturity date. Other fixed income instruments include bank deposits, debentures, preference shares etc. The average rate of return on bond and securities in India has been around 10-13% p.a.

Mutual Fund: These are open and close-ended funds operated by an investment company, which raises money from the public and invests in a group of assets, in accordance with a stated set of objectives. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the funs net asset value, which is determined at the end of each trading session. The average rate of return as a

combination of all mutual funds put together is not fixed but is generally more than what earn is fixed deposits. However, each mutual fund will have its own average rate of return based on several schemes that they have floated. In the recent past, Mutual Funs have given a return of 18 35%.

Real Estate: For the bulk of investors the most important asset in their portfolio is a residential house. In addition to a residential house, the more affluent investors are

likely to be interested in either agricultural land or may be in semi-urban land and the commercial property.

Precious Projects: Precious objects are items that are generally small in size but highly valuable in monetary terms. Some important precious objects are like the gold, silver, precious stones and also the unique art objects.

Life insurance: In broad sense, life insurance may be reviewed as an investment. Insurance premiums represent the sacrifice and the assured the sum the benefits. The important types of insurance policies in India are:

Endowment assurance policy. Money back policy. Whole life policy. Term assurance policy. Unit-linked insurance plan.

ABOUT EQUITY INVESTMENT

Stocks are investments that represent ownership --- or equity --- in a corporation. When you buy stocks, you have an ownership share --- however small --- in that corporation and are entitled to part of that corporations earnings and assets. Stock investors --- called shareholders or stockholders --- make money when the stock increases in value or when the company the issued the stock pays dividends, or a portion of its profits, to its shareholders. Some companies are privately held, which means the shares are available to a limited number of people, such as the companys founders, its employees, and investors who fund its development. Other companies are publicly traded, which means their shares are available to any investor who wants to buy them.

Growth & Income Some stocks are considered growth investments, while others are considered value investments. From an investing perspective, the best evidence of growth is an increasing price over time. Stocks of companies that reinvest their earnings rather than paying them out as dividends are often considered potential growth investments. So are stocks of young, quickly expanding companies. Value stocks, in contrast, are the stocks of companies that problems, have been under performing their potential, or are out of favor with investors. As result, their prices tend to be lower than seems justified, though they may still be paying dividends. Investors who seek out value stocks expect them to stage a comeback. Market Capitalization One of the main ways to categorize stocks is by their market capitalization, sometimes known as market value. Market capitalization (market cap) is calculated by multiplying a companys current stock price by the number of its existing shares. For example, a stock with a current market value of $30 a share and a hundred million shares of existing stock would have a market cap of $3 billion. P/E ratio A popular indicator of a stocks growth potential is its price-to-earnings ratio, or P/E or multiple can help you gauge the price of a stock in relation to its earnings. For instance, a stock with a P/E of 20 is trading at a price 20 times higher than its earnings. A low P/E may be a sign that a company is a poor investment risk and that its earnings are down. But it may also indicate that the market undervalues a company because its stock price doesnt reflect its earnings potential. Similarly, a stock with a high P/E may live up to investor expectations of continuing growth, or it may be overvalued.

Investor demand People buy a stock when they believe its a good investment, driving the stock price up. But if people think a companys outlook is poor and either dont invest or sell shares they already own, the stock price will fall. In effect, investor expectations determine the price of a stock. For example, if lots of investors buy stock A, its price will be driven up. The stock becomes more valuable because there is demand for it. But the reverse is also true. If a lot of investors sell stock Z, its price will plummet. The further the stock price falls, the more investors sell it off, driving the price down even more.

The Dividends The rising stock price and regular dividends that reward investors and give them confidence are tied directly to the financial health of the company. Dividends, like earnings, often have a direct influence on stock prices. When dividends are increased, the message is that the company is prospering. This in turn stimulates greater enthusiasm for the stock, encouraging more investors to buy, and riving the stocks price upward. When dividends are cut, investors receive the opposite message and conclude that the companys future prospects have dimmed. One typical consequence is an immediate drop in the stocks price. Volatility One of the risks youll need to plan for as a stock investor is volatility. Volatility is the speed with which an investment gains or loses value. The more volatile an investment is the more you can potentially make or lose in the short term. Managing Risk One thing for certain: Your stock investment will drop in value at some point. Thats what risk is all about. Knowing how to tolerate risk and avoid selling your stocks off in a panic is all part of a smart investment strategy. Setting realistic goals allocating and diversifying your assets appropriately and taking a long-term view can help offset many of the risks of investing in stocks. Even the most speculative stock investment with its potential for large gains may play an important role in a well-diversified portfolio.

ABOUT BONDS INVESTMENT Have you ever-borrowed money? Of course you have whether we hit our parents up for a few bucks to buy candy as children or asked the bank for a mortgage most of us have borrowed money at some point in our lives.

Just as people need money so do companies and governments. A company needs funds to expand into new markets, while governments need money for everything from infrastructure to social programs. The problem large organizations run into is that they typically need far more money than the average bank can provide. The solution is to raise money by issuing bonds (or other debt instruments) to a public market. Thousands of investors then each lend a portion of the capital needed. Really a bond is nothing more than a loan for which you are the lender. The organization that sells a bond is known as the issuer. Your can think of a bond as an IOU given by a borrower (the issuer) to a lender (the investor).

Of course, nobody would loan his or her hard-earned money for nothing. The issuer of a bond must pay the investor something extra for the privilege of using his or her money. This extra comes in the form of interest payments, which are made at a predetermined rate and schedule. The interest rate is often referred to as the coupon. The date on which the issuer has to repay the amount borrowed (known as face value) is called the maturity date. Bonds are known as fixed-income securities because you know the exact amount of cash youll get back if you hold the security until maturity. For example, say you buy a bond with a face value of $1000 a coupon of 8% and a maturity of 10 years. This means youll receive a total of $80 ($1000*8%) of interest per year for the next 10 years. Actually because most bonds pay interest semiannually youll receive two payments of $40 a year for 10 years. When the bond matures after a decade, youll get your $1000 back.

Face Value / Par Value The face value (also known as the par value or principal) is the amount of money a holder will get back once a bond matures. Newly issued bond usually sells at the par

value. Corporate bonds normally have a par value of $1000 but this amount can be much greater for government bonds. What confuses many people is that the par value is not the price of the bond. A bonds price fluctuates throughout its life in response to a number of variables (more on this later). When a bond trades at a price above the face value, it is said to be selling a premium. When a bond sells below face value it is said to be selling at a discount.

Coupon (The Interest Rate) The coupon is the amount the bondholder will receive as interest payments. Its called a coupon because sometimes there are physical coupons on the bond that you tear off and redeem for interest. However this was more common in the past. Nowadays records are more likely to kept electronically. As previously mentioned most bonds pay interest every six months but its possible for them to pay monthly, quarterly or annually. The coupon is expressed as a

percentage of the par value. If a bond pays a coupon of 10% and its par value is $1000 then itll pay %100 of interest a year. A rate that stays as a fixed percentage of the par value like this is a fixed-rate bond. Another possibility is an adjustable interest payment known as a floating-rate bond. In this case the interest rate is tied to market rates through an index such as the rate on Treasury bills. You might think investors will pay more for a high coupon than for a low coupon. All things being equal a lower coupon means that the price of the bond will fluctuate more.

Maturity The maturity date is the date in the future on which the investors principal will be repaid. Maturities can range from as little as one day to as long as 20 years (though terms of 100 years have been issued). A bond that matures in one year is much more predictable and thus less risky than a bond that matures in 20 years. Therefore in general the longer the time to maturity the

higher the interest rate. Also all things being equal a longer-term bond will fluctuate more than a shorter-term bond. Issuer The issuer of a bond is a crucial factor to consider, as the issuers stability is your main assurance of getting paid back. For example, the U.S government is far more secure than any corporation. Its default risk (the chance of the debt not being paid back) is extremely small so small that U.S government securities are known as risk-free assets. The reason behind this is that a government will always be bale to bring in future revenue through taxation. A company on the other hand must continue to make profits, which is far from guaranteed. This added risk means corporate bond must offer a higher yield in order to entire investors this is the risk / return tradeoff in action. The bond rating system helps investors determine a companys credit risk. Think of a bond rating as the report card for a companys credit rating. Blue-chip firms, which are safer investments, have a high rating, while risky companies have to low rating. The chart below illustrates the different bond rating scales from the major rating agencies in the U.S. Moodys Standard and Poors and Fitch Ratings.

Bond Rating Moodys S&P / Fitch AAA Aaa Aa A Baa Ba, B Caa/Ca/C C AA A BBB BB, B CCC/CC/C D

Grade

Risk

Investment Investment Investment Investment Junk Junk Junk

Highest Quality High Quality Strong Medium Grade Speculative Highly Speculative In Default

Notice that if the company falls below a certain credit rating, its grade changes from investment quality to junk status. Junk bonds are aptly named: they are the debt of companies in some sort of financial difficulty. Because they are so risky, they have to offer much higher yields than any other debt. This brings up an important point: not all bonds are inherently safer than stocks. Certain types of bonds can be just risky, if not riskier, than stocks. Different Types of Bonds Government Bonds In general, fixed-income securities are classified according to the length of time before maturity. These are the three main categories: Bill debt securities maturing in less than one year, Notes debt securities maturing in one to 10 years. Bonds - debt securities maturing in more than 10 years. Municipal Bonds Municipal bonds, known as munis, are the next progression in terms of risk. Cities dont go bankrupt that often, but it can happen. The major advantage to munis is that the returns are free from federal tax. Furthermore, local governments will sometimes make their debt non-taxable for residents, thus making some municipal bonds completely tax-free. Because of these tax savings, the yield on a muni a usually lower than that of a taxable bond. Depending on your personal situation, a muni can be great investment on an investment on an after-tax basis. Corporate Bonds A company can issued bonds just as it can issue stock. Large corporations have a lot of flexibility as to how much debt they can issue: the limit is whatever the market will bear. Generally, a short-term corporate bond is less than five years; intermediate is five to 12 years, and long term is over 12 years. Corporate bonds are characterized by higher yi8eld because there is a higher risk of a company defaulting than a government. The upside is that they can also be the most rewarding fixed-income investments because of the risk the investor must take on.

The companys credit quality is very important: the higher the quality, the lower the interest rate the investor receives. Other variations on corporate bonds include convertible bonds, which the holder can convert into stock, and callable bonds, which allow the company to redeem an issue prior to maturity. Risks As with any investment, there are risks inherent in buying even the most highly related bonds. For example, your bond investment may be called, or redeemed by the issuer, before the maturity date. Economic downturns and poor management on the part of the bond issuer can also negatively affect your bond investment. These risks can be difficult to anticipate, but learning how to better recognize the warning signs and knowing how to respond will help you succeed as a bond investor. ABOUT GOLD INVESTMENT Gold is the oldest precious metal known to man. Therefore, it is a timely subject for several reasons. It is the opinion of the more objective market experts that the traditional investment vehicles of stocks and bonds are in the areas of their all-time highs and may due for a severe correction. Why gold is good as old is an intriguing question. However, we think that the more pragmatic ancient Egyptians were perhaps more accurate in observing that golds value was a function of its pleasing physical characteristics its scarcity.

WORLD GODL INDUSTRY Gold is primarily monetary asset and partly a commodity. The Gold market is highly liquid and gold held by central banks, other major institutions and retail Jeweler keep coming back to the market. Economic forces that determine the price of gold are different from, and in many cases opposed to the forces that influence most financial assets. Indian is the worlds largest gold consumer with an annual demand of 800 tons.

World Gold Markets Physical - London, Zurich, Istanbul, Dubai, Singapore, Hong Kong, Mumbai. Futures NYMEX in New York, TOCOM in Tokyo. Indian Gold Market Gold is valued in India as a savings and investment vehicle and is the second preferred investment after bank deposits. India is the worlds largest consumer of gold in jeweler as investment. In July 1997 the RBI authorized the commercial banks to import gold for sale or loan to jewelers and exporter. At present, 13 banks are active in the import of gold. This reduced the disparity between international and domestic prices of gold from 57 percent during 1986 to 1991 to 8.5 percent in 2001. The gold hoarding tendency is well ingrained in Indian society. Domestic consumption is dictated by monsoon, harvest and marriage season. Indian jewellery off takes is sensitive to price increase and even more so to volatility. In the cities gold is facing competition from the stock market and a wide range of consumer goods. Facilities for refining, assaying, making them into standard bars in India, as compared to the rest of the world, are insignificant, both qualitatively.

How gold stacks up as investment option Gold and silver have been popular in India because historically these acted as a good hedge against inflation. In that sense these metals have been more attractive than bank deposits or gilt-edged securities. Despite recent hiccups, gold is an important and popular investment for many reasons:

In many countries gold remains an integral part of social and religious customs, besides being the basic form of saving. Shakespeare called it the saint-seducing gold.

Superstition about the healing powers of gold persists. Ayurvedic medicine in India recommends gold powder and pills for many ailments. Gold is indestructible. It does not tarnish and is also not corroded by acidexcept by a mixture of nitric and hydrochloric acids. Gold is so malleable that one ounce of the metal can be beaten into a sheet covering nearly a hundred square feet. Gold is so ductile that one ounce of it can be drawn into fifty miles of thin gold wire. Gold is an excellent conductor of electricity; a microscopic circuit of liquid gold printed on a ceramic strip saves miles of wiring in a computer. Gold is so highly valued that a single smuggler can carry gold worth Rs.50 lakh underneath his shirt. Gold is so dense that all the 90,000 tones estimated to have been mined through history could be transported by one single modern super tanker. Finally, gold is scam-free. So far, there have been no Mundra-type or Mehtatype scams in gold.

Thus the lure of this yellow metal continues. One the other hand, it is interesting to note that apart from its aesthetic appeal gold has no intrinsic value. You cannot eat it, drink it, or even smell it. This aspect of gold compelled Henry Ford, the founder of Ford Motors, to conclude that gold is the most useless thing in the world.

Why People Buy Gold (A) Industrial applications take advantage of golds high resistance to corrosion, its malleability, high electrical conductivity and its ability to adhere firmly to other metals. There is a wide range of industries from electronic components to porcelain, which use gold. Dentistry is an important user of gold. The jewellery industry is another.

(B) Acquisition of gold because of its long-proven ability to retain value and to appreciate in value. (C) Purchases by the central banks and international monetary organizations like the International Monetary Fund (IMF).

Investment Options There has been a shift in demand from jewellery (ornamentation) to coins and bars (investments). Coins cost less when compared to jewellery (which has additional making charges). Assayed, certified coins and bars are available through authorized banks. Demand for jewellery remains strong in traditional circles though gold-plated jewellery is also becoming popular. Gold futures: Right now, 75% of Indians demand is for jewellery, the rest is for coins and bars. Investors can also dabble in gold futures; with demat delivery on stock exchanges. This is low cost and physical delivery is at 0.995 purity. Gold futures trading clocked a recent turnover of Rs4, 300 crore. Gold ETFs: More sophisticated investment products will come. One possibility is exchange traded funds (ETFs) where gold is the underlying asset. Investors can trade ETF units with real time quotes. Gold ETF is long overdue, says Naveen Kumar, Head of Financial Initiatives, World Gold Council. Gold ETFs could be launched soon; it is a awaiting clearance from the Finance Ministry. Worldwide more than 600 exchange listed structured products based on gold are available. Street track an ETF owned by the World Gold Council is listed on the NYSE. Commodity brokers like Kotak are offering capital protected bonds; these are open for a specific period (usually one year) with gold as the underlying asset. On appreciation profit is shared and if the price falls the capital is safe.

Gold Banking Indian jewelers offer gold accumulation plan. Money can be deposited on a regular basis and jeweler converts into gold at prevailing prices. Interest is earned during the fixed period of tenure of investment. On redemption, the corpus is converted into gold coins. This is like a forced structure saving scheme.

ABOUT MUTUAL FUND INVESTMENT A Mutual Fund is an entity that pools the money of many investorsits Unit-Holders -- to invest in different securities. Investments may be in shares, debt securities, money market securities or a combination of these. Those securities are professionally managed on behalf of the Unit-Holder and each investor hold a pro-rata share of the portfolio i.e. entitled to any profits when the securities are sold but subject to any losses in value as well. Mutual Funds and sell stocks, bonds or other securities. A Fund raises money to make its purchases, known as its underlying investments by selling shares in the fund. Earnings the fund realizes on its investment portfolio, after the trading costs and expenses of managing and administering the fund are subtracted are paid out to the funds shareholders. Mutual Fund Set Up A Mutual Fund is set up in the form of a trust, which has Sponsor, Trustees, Asset Management Company (AMC), and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are invested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund. SEBI Regulations require that at least two thirds of the directors of Trustee Company or board of trustee must be independent. I.e. they should not be associated with the sponsors. Also 50% of the directors of ANC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme. However, Unit Trust of India (UTI) is not registered with SEBI (as on January 15, 2002).

Types of Funds Stock funds also called equity funds- invest primarily in stocks. Bond funds invest primarily in corporate or government bonds

Balanced funds invest in both stocks and bonds. Money market funds make short-term investment and try to keep their share value fixed at $1 a share.

Every fund in each category has a price known as its net asset value (NAV) and each NAV differs based on the value of the funds holdings and the number of shares investors own. The price changes once a day, at a 4 pm EST, when the markets close for the day. All transactions for the day buys and sells are executed at that price. Schemes According to Maturity Period A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period. Open Ended Fund/Scheme An open-ended fund or scheme is one that is available for subscription and repurchase one continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices, which are declared on a daily basis. The key feature of Open-End Schemes is liquidity. Close-Ended Fund / Scheme A Close-Ended Fund or Scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective A Scheme can also be classified a growth scheme, income scheme or balanced scheme considering its investment objective. Such schemes may be open-ended or

close-ended schemes as described earlier. Such schemes may be classified mainly as follows.

Growth / Equity Oriented Scheme The aim of growth funds is to provide capital appreciation over the medium to longterm. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation etc. And the investors may choose an option depending on their preference. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Tax Saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government Offers Tax Incentives for investment in specified avenues. E.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefit. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.

The Appeal of Mutual Funds Mutual Funds simplify what you may find most complicated about investing figuring out what to buy and when to sell to meet your particular goals or objectives. For example, if you are seeking growth by investing in blue chip stocks, there are a wide variety of funds to chose from that pursuing precisely this strategy. To chose the fund that will help you meet a specific goal, you can compare its longterm performance over 5 or 10 years to other funds with similar objectives learn about whom the manager is and how the fund is run and check out its fee structure. You can use the funds prospectus, information on the fund companys Web Sites and professi0onal advice. Mutual funds can help you diversify your portfolio or spread out the money you have to invest to meet different goals. One way to diversify is to chose funds with different objectives aligned with your own, or representing different

segments of the market. For example, you might buy a blue-chip fund, a small company growth fund, an international stock fund and a government fund.

Diversification Most expert agrees that its more effective to invest in a variety of stocks and bonds than to depend on a strong performance of just one or two securities. But diversifying can be a challenge because buying a portfolio of individual stocks and bonds can be expensive. And knowing what to buy and when taken time and concentration. Mutual funds can offer solution. When you put money in to a fund, its pooled with money from other investors to create much greater buying power than you build a diversified portfolio. Since a fund may own hundreds of different securities, its success isnt dependent on how one or two holding do.

Investment objectives To achieve its investment objective whether it is long term growth or capital preservation or anything in between the funds manager invests in securities he or she believes will provide the result the fund seeks. To identify those securities, a funds research staff often uses whats known as a bottom up style, which involves a detailed analysis of the individual companies issuing the securities. When the object is small company growth or the focus is on emerging markets, the process can be more difficult because theres limited information available. You may choose mutual funds with specific investment objectives to round out your portfolio of individual holdings. Or you may choose a number of mutual funds with different objectives creating a diversified portfolio in that way.

Professional management Another reason investors are attracted to mutual funds is that each fund has a professional manager who sets its investment buying style and directs the key buy and sell decisions. A buying style defines the particular investments or types of investments a fund makes from the pool that may be appropriate for meeting its objective. For example, in seeking long-term capital appreciation, some equity fund managers stress value investments, which mean they buy stocks whose prices are lower than might be expected. Others stress growth investments; often younger, dynamic companies the

manager believes will become major players in their industry or in the economy as a whole. Some experts believe that a funds manager has a major role in determining the results a fund achieves. They advise that you confirm that a successful manager is still with the fund before you invest and that you consider selling your shares if that manager leaves.

Reinvestment Being able to reinvest your distributions to buy additional shares is another advantage of investing in mutual funds. You can choose that option when you open a new account, or at any time while you own shares. And of course you also have the option to receive your distributions if you need the income the fund would provide. By investing regularly, you build the investment base on which future earnings will be able to accumulate, a process known as compounding. The more you have invested, the greater youre potential for future growth. And because the fund handles the process, rolling over distributions into new shares as they are paid, you dont have to budget for investing or remember to write the check.

Risk There is always the risk that a mutual fund wont meet its investment objective or provide the return you are seeking. And some funds are by definition, riskier than others. For example a fund that invests in small new companies-whether for growth or value exposes you to the risk that the companies will not perform as well as the fund manager expects. And in market downturns, falling prices for a funds underlying investment may produce a loss rather than a gain for the fund. Short-Term Gains Each time a mutual fund sells an investment for more than the fund paid to buy it, the fund realizes a capital gain. And those gains are passed along to the funds investors in proportion to the number of shares in the fund that investor owns. Most actively managed funds dont wait more than a year before selling investments. That means that any profit on the sale is a short-term capital gain, which is taxed at your regular tax rate. And since a fund typically doesnt withhold taxed on your behalf, as an employer does, you must come up with the amount your owe from

other sources if you dont want to sell shares-at a potential additional gain to raise the money you owe. ABOUT REAL ESTAES INVESTMENT

Before the stock market and mutual funds became popular places for people to put their investment dollars, investing in real estate was extremely popular. We still maintain that investing in real estate is not just for land barons or the rich and famous. As a matter of fact, the home we buy and live in is often our biggest investment.

Flying high on the wings of booming real estate, property in India has become a dream for every potential investor looking forward to dig profits. All are eyeing Indian property market for a wide variety of reasons Its ever growing economy, which is on a continuous rise with 8.1 percent increase witnessed in the last financial year. The boom in economy increases purchasing power of its people and creates demand for real estate sector

Once you have made the decision to become a homeowner, it usually means you will have to borrow the largest amount you have ever borrowed to purchase something. This realization may make you want to bury your head in the sand and sign on the dotted line, but you shouldnt. For most people, this is the largest purchase they will ever make during their lifetime, and this makes it all the more important to gather as much knowledge as possible about what theyre getting into.

We give you the information you need, including making the decision on whether, when and what you should purchase; finding the types of mortgages and financing available; handling the closing; and knowing what youll need when its time to sell your home. We also explain the income tax consequences and asset protection advantages of home ownership.

You can also use real estate, whether land or building strictly as investment vehicles, and depending on your individual situation, you can do it on a grand or smaller scale. Lets look at the world of real estate and the investing options available.

 Home as an Investment: Owing a home is the most common form of real estate investing. Let us show you how your home is not just the place you live, but its also perhaps your largest and safest investment as well. Investment Real Estate: The in and outs of investing in real estate and whether its the right investment vehicle for you. Whether you are thinking in terms of renting out your first home when you move on to a bigger one or investing in a building full of apartments we will explain what you need to know.

Real Estate & Property Usually, the first thing you look at when you purchase a home is the design and the layout. But if you look at the house as an investment, it could prove very lucrative years down the road. For the majority of us, buying a home will be the largest single investment we make in our lifetime. Real estate investing doesnt just mean purchasing a house- it can include vacation homes, commercial prosperities, land (both developed and undeveloped), condominiums and many other possibilities.

When buying property for the purpose of investing, the most important factor to consider is the location. Unlike other investments, real estate is dramatically affected by the condition of the immediate area surrounding the property and other local factors. Several factors need to be considered when assessing the value of real estate. This includes the age and condition of the home, improvements that have been made, recent sales in the neighborhood, changes to zoning regulations etc. You have to look at the potential income a house can produce and how it compares to others houses in the area.

Objectives and Risks Real estate investing allows the investor to target his or her objectives. For example, if your objective is capital appreciation, then buying a promising piece of property in a neighborhood with great potential will help you achieve this. On the other hand if what you seek is income then buying a rental property can help provide regular income. There are significant risks involved in holding real estate. Property taxes maintenance expenses and repair costs are just some of the costs of holding the asset. Furthermore

real estate is considered to be very illiquid it can sometimes be hard to find a buyer if you need to sell the property quickly.

How to Buy or Sell it. Real estate is almost exclusively bought through real estate agents or brokers their compensation usually is a percentage of the purchase price of the property. Real estate can also be purchased directly7 from the owner, without the assistance of a third party. If you find buying property too expensive, then consider investing in real estate investment trusts (REITs) which are discussed in the next section. Lets take a look at the different types of investment real estate you might contemplate owing.

ABOUT LIFE INSURANCE INVESTMENT

Life Insurance is income protection in the event of your death. The person you name, as your beneficiary will receive proceeds from an insurance company to offset the income lost as a result of your death. You can think of life insurance as a morbid from of gambling: if you lived longer than the insurance company expected you to then you would lose the bet. But if you died early, then you would win because the insurance company would have to pay out your beneficiary.

Insurers (or underwriters) look carefully at decades worth of data to try to predict exactly how long you will live. Insurance underwriters classify individuals based on their height, weight, lifestyle (i.e. whether or o not they smoke) and medical history (i.e. if they have had any serious health complications). All these variables will determine what rate class category a person fits into. This doesnt mean that smokers and people who have had serious health problems cant be insured, it just means theyll pay different premiums.

There are two very common kinds of life insurance term life and permanent life. Term life insurance is usually for a relatively short period of time, whereas a permanent life policy is one that you pay into throughout your entire life. These payments are usually fixed from the time you purchase your policy. Basically, the younger you are when you sign-up for this type of insurance, the cheaper your monthly payments will be.

Need for life insurance Risks and uncertainties are part of lifes great adventure accident, illness, theft natural disaster theyre all built into the working of the Universe, waiting to happen. Insurance then is mans answer to the vagaries of life. If you cannot beat man-made and natural calamities, well at least be prepared for them and their aftermath.

Types of life Insurance Most of the products offered by Indian Life insurers are developed and structured around these basic policies and are usually an extension or a combination of these policies. So, the different types of insurance policies are

Term Insurance Policy A term insurance policy is a pure risk cover for a specified period of time. What this means is that the sum assured is payable only if the policyholder ides within the policy term. For instance, if a person buys Rs.2 lakh policy for 10-years period? Well, then he is not entitled to any payment; the insurance company keeps the entire premium paid during the 10-year period. What if he survives the 10-year period? Well, then he is not entitled to any payment; the insurance company keeps the entire premium paid during the 10year period. So, there is no element of savings or investment in such a policy. It is a 100 percent risk cover. It simply means that a person pays a certain premium to protect his family against his sudden death. He forfeits the amount if he outlives the period of the policy. This explains why the Term Insurance Policy comes at the lowest cost.

Endowment Policy Combining risk cover with financial savings, an endowment policy is the most popular policies in the world of life insurance. In an Endowment Policy, the sum assured is payable even if the insured survives the policy term. If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as any other pure risk cover.

A pure endowment policy is also a form of financial saving whereby if the person covered remains alive beyond the tenure of the policy; he gets back the sum assured with some other investment benefits.

In addition to the basic policy, insurers offer various benefits such as double endowment and marriage / education endowment plans. The cost of such a policy is slightly higher but worth its value.

Whole Life Policy As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following which the money is handed over to his family. This policy, however fails to address the additional needs of the insured during his post-retirement years. It doesnt take into account a persons increasing needs either. While the insured buys the policy at young age, his requirements increase over time. By the time he dies, the value of the sum assured is too low to meet his familys needs. As a result of these drawbacks, insurance firms now offer either a modified Whole Life Policy or combine in with another type policy.

Money Back Policy These policies are structured to provide sums required as anticipated expenses (marriage, education etc) over a stipulated period of time. With inflation becoming a big issue, companies have realized that sometimes the money value of the policy is eroded. That is why with profit policies are also being introduced to offset some of the losses incurred on account of inflation. A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable. In case of death, the full sum assured is payable to the insured. The premium is payable for a particular period of time.

UNIT-linked insurance Bima Plus is a unit-linked endowment plan. The plan is available over a duration of 10 years. Premium can be paid either yearly, half-yearly, or at one shot. The premium is used to purchase units in a fund of one's choice, after the necessary deductions. The value of the units varies with the investment performance of the assets in the fund. Investments can be made in one of three types of funds: Secured fund, which invests predominantly in debt and money market instruments; Risk fund, in which the tilt is towards equities; and a Balanced Fund, a blend of the two. Switching between funds is allowed twice during the policy term, subject to the condition that they are at least two years apart. Charges for switching are 2 per cent of the fund's cash value.

What the beneficiary receives depends on when the death of the policyholder occurs. If death occurs within the first six months of the policy, the payout is 30 per cent of the sum assured plus the cash value of the units. Between months seven and 12 of the policy, the payout is 60 per cent of the sum assured plus cash value of units. After first year, the sum assured and cash value of the units is paid. During the 10th year, 105 per cent of the sum assured and cash value of units is paid out. If death occurs due to an accident, a sum equal to the sum assured, over and above the benefit mentioned above is paid. On survival up to maturity, the policyholder will receive 5 per cent of the sum assured plus the cash value of the units.

As is the case with unit-linked plans, this plan, too, comes with a set of charges. This includes a level annual mortality charge, the quantum of which is a function of the

policyholder's entry age; accident benefit charge at Rs.0.50 per thousand sum assured; annual administrative and commission charges; and a fund management charge. On surrendering the policy, the cash value of the units, subject to certain deductions that depend on the year surrendered, is paid out to the policyholder.

Annuities and Pension

In annuity, the insurer agrees to pay the insured a stipulated sum of money periodically. The purpose of an annuity is to protect against risk as well as provide money in the form of pension at regular intervals. Over the years, insurers have added various features to basic insurance policies in order to address specific needs of a cross section of people.

Objectives and Risks

No matter who you are, one benefit of life insurance is the peace of mind it gives you. If anything happens to you, your beneficiary will receive a check in a matter of days. Life Insurance can also be used to cover any debts or liabilities you leave behind. The bank doesnt just write off your mortgage once you pass away these payments must be made or your house may be liquidated. Life Insurance can also create an inheritance for your heirs or it can be used to leave a legacy if its put toward donations to charitable organizations. Most life insurance policies carry relatively little risk because insurance companies are usually stable and heavily regulated by the government. In cash value policies you are allowed to invest you policy in stock, bond or money market funds. In these types of policies the value of your insurance depends on the performance of those funds.

How to Buy or Sell it There are thousands of insurance brokers and banks across North America. Keep in mind that you will usually have to pay a commission for the salesperson

Strengths
Life insurance provides excellent peace of mind it eases concerns about what will happen to your loved ones if you die suddenly.

A life insurance policy is a relatively low risk investment If you live a long life, your family likely wont get the full value out of your policy. Cash value funds can fluctuate depending on the financial markets.

Weaknesses

Three Main Uses Income Protection Capital Appreciation Tax-Deferred Savings.

PERFORMANCE ANALYSIS OF RETURNS

Equity returns at a glance If we have a look at equity returns of the past 7 years it is like this:

SENSEX

YEAR

INDIEX*

ABSOLUTE CHANGE

PERCENTAGE CHANGE (%) 0 -17.88 3.52 72.88 13.08 42.34 46.70 0.88 31.57

2000 2001 2002 2003 2004 2005 2006 2007 2008

3972 3262 3377 5838 6602 9397 13786 13908 20323

0 -710 115 2461 764 2795 4389 122 6415

25000 20000 15000 10000 5000 0 2000

2001

2002

2003

2004

2005

2006

2007

2008

BSE100

YEAR

INDEX

ABSOLUTE CHANGE

PERCENTAGE CHANGE (%) 0 -23.38 6.88 84.74 16.46 38.32 40.96 0.65 23.06

2000 2001 2002 2003 2004 2005 2006 2007 2008

2032 1559 1664 3076 3580 4953 6982 7026 9132

0 -477 107 1412 506 1373 2029 44 2106

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008

BSE200

YEAR

INDEX*

ABSOLUTE CHANGE

PERCENTAGE CHANGE (%) 0 -21.96 15.54 94.41 15.66 33.86 39.54 0.42 23.05

2000 2001 2002 2003 2004 2005 2006 2007 2008

437 340 394 766 884 1186 1655 1662 2160

0 -95 53 372 118 300 469 7 498

2500 2000 1500 1000 500 0 2000

2001

2002

2003

2004

2005

2006

2007

2008

BSE500 YEAR INDEX* ABSOLUTE CHANGE 2000 2001 2002 2003 2004 2005 2006 2007 2008 1304 1005 1176 2368 2779 3795 5268 5295 6883 0 -299 171 1192 413 1016 1473 25 1588 PERCENTAGE CHANGE (%) 0 -22.93 17.01 101.20 17.46 36.56 38.86 0.47 23.07

7000 6000 5000 4000 3000 2000 1000 0 2000 2002 2004 2006 2008
INDEX

Bonds returns at a glance

If we have a look at the average return, which the central government securities have given over a period of one year, it is 9.11%. Now if we look at the average return, which the state government securities have given over a period of one year, it is 9.28%.

Gold returns at a glance Gold shines when everything else falls apart goes an old adage. True, the glitter is back. During the 50s gold appreciated marginally. The next decade, 1960-1970, it moved from $35 to $40 and between 1970-1980 came the massive rise from $40 to $614, a whopping 1407%. The trend of gold prices in India in the last few years is given in the following table.

YEAR

PRICE ($)*

ABSOLUTE CHANGE

PERCENTAGE CHANGE (%) 2.20 24.46 19.65 5.79 18.03 18.03 23.01 36.08

2000 2001 2002 2003 2004 2005 2006 2007 2008

272 278 346 414 438 517 517 636 995

100 80 60 40 20 0 2000 2002

6 68 68 24 79 79 119 359

INDEX

2004

2006

2008

*Price indicates December end prices of that particular year Mutual Funds return at a glance

EQUITY TAX SAVING

NAV

1 YR

2 YR

3 YR

Magnum Tax Gain

47.7

107.70

93.40

112.30

Principal Tax Savings

74.60

91.20

59.30

73.70

HDFC Tax Saver

138.50

104.60

83.60

91.60

140 120 100 80 60 40 20 0 NAV 1 YR 2 YR 3 YR

MAGNUM TAX GAIN HDFC TAX SAVER PRINCIPAL TAX GAIN

EQUITY BALANCED Magnum Balanced

NAV

1 YR

2 YR

2 YR

32.40

74.60

53.40

63.70

Kotak Balanced HDFC Prudential

23.80 96.30

71.10 61.80

49.10 42.90

52.80 55.90

100 80 60 40 20 0 NAV 1 YR 2 YR 3 YR
MAGNUM BALANCED HDFC PRUDENCE KOTAK BALANCED

Real Estate Returns Real Estate industry in India has come of age and competes with other investment options in the structured markets. Commercial real estate continues to be a desirable investment option in India. On an average the returns from rental income on an investment in commercial property in metros is around 10.5%, which is the highest in the world. In case of other investment opportunities like bank deposits and bonds, the returns are in the range of 5.5% - 6.5%. Rejuvenated demanded since early 2004 has led to the firming up of real estate markets across the three sectors commercial, residential and retail. The supply just about matches demand in almost all metros around the country. There has been an upward pressure on the real estate values. From a technical perspective, robust demand and upward prices are helping revive investment and speculative interest in real estate and this is being further aided by excess money supply, stock market gains and policy changes in favor of the real estate sector.

Investment Yield Increasing demand from the IT/ITES and BPO sector has led to approximately 20% 40% increase in capital values for office space in the last 12-18 months across major metros in India. Grade-A office property net yields have come down from 12% -15% in 2003 and currently average around 10.5% - 11% p.a. The fall in yields has resulted from decreasing interest rates and increasing appetite from investors. This has in turn resulted from abundant liquidity options available coupled with the acceptability of real estate as a conventional class of asset. Lower interest rates, easy availability of housing finance, escalating salaries and job prospects have been lending buoyancy to the residential sector. The net yields (after accounting for all outgoings) on residential property are currently at 4% - 6% p.a. However, these investments have benefited from the improving residential capital values. As such, investor can count on potential capital gains to improve their overall returns. Capital values in the residential sector have risen by about 25% - 40% p.a. in the last 15 18 months. The retail market in India has been growing due to increasing demand from retailers, higher disposable incomes and dearth of quality space as on date. Though the net yields on retail property have registered a fall from 10% - 13% p.a. reported earlier to 9% - 10.5% p.a. currently, the capital appreciation in this sector is close to 20% 40% p.a. However, the risks associated with this sector are higher as retailers are prone to

cyclical changes typical of a business cycle. Changing consumer psychographics combined with increasing disposable incomes will ensure further growth of the retail sector in India.

Life Insurance returns at a glance Life Insurance as Investment Insurance is an attractive option for investment. While most people recognize the risk hedging and tax saving potential of insurance, many are not a aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options and this is besides the added incentives (bonuses) offered by insurers. You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks something that is missing in non-insurance products. In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before comparing with other schemes, you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings. In life insurance except for term insurance, unlike non-life products you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive and survive the term, the amount invested as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy the family of the deceased will receive the sum assured. Now let us compare insurance as an investment options. If you invest INR 10000 in PPF, your money grows to Rs.10950 at 9.5% interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50% of the initial deposit only after 4 years. The same amount of Rs.10000 can give you an insurance cover of up to approximately Rs.5 11 lakh (depending upon the plan, age and medical condition

of the life insured etc) and this amount can become immediately available to the nominee of the policyholder on death. Thus insurance is a unique investment avenue that delivers sou8nd returns in addition to protection.

Life Insurance as Tax Planning Insurance serves as an excellent tax saving mechanism too. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Under section 88 of income tax act 1961, an individual is entitled to a rebate of 20% on the annual premium payable on his/her and life of his/her children or adult children

UNIT -6 ANALYSIS&INTERPRETATIONS

Description about the most important points of coverage during research Analysis (question wise) DATA ANALYSIS AND INTERPRETATION
1. How much your annual income? a)<100000 b)1-2.5 lacks c)2.5-5 lacks d)>5lacks

No. of Respondents
40 35 30 25 20 15 10 5 0 a)<100000 b)1-2.5 lacks c) 2.5-5 lacks d)>5 lacks No. of Respondents

Interpretation- 20% of the respondents having income of <100000,38% are having 1-2.5 lacks,22% are having 2.5-5 lacks and 20% are having more than 5 lacks..

option

No.

of Percentage

Respondents a)<100000 b)1-2.5 lacks c) 2.5-5 lacks d)>5 lacks Total 20 38 22 20 100 20% 38% 22% 20 100%

2. Why are you choosing life insurance to invest your money? a) Risk coverage Option a) ) Risk coverage b) tax benefit c) secured returns d) future needs Total b) tax benefit c) secured returns d) future needs Percentage 40% 27% 18% 15 100%

No. of Respondents 40 27 18 15 100

No. of Respondents
a) ) Risk coverage c) secured returns b) tax benefit d) future needs

15% 40% 18%

27%

Interpretation- 40% of the respondants said

choosing life insurance for risk

coverage, 27% said choosing life insurance for tax benefit, 18% said choosing life insurance for secured returns,15% said it is for future needs..

3. Why are you chosen HDFC life insurance? a) Returns b) security c) tax benefit d) its products

Option a) returns b) security c) tax benefit d)its products Total

No. of Respondents 10 30 40 20 100

Percentage 10% 30% 40% 20 100%

No. of Respondents
No. of Respondents 40 30 20 10

a) returns

b) security

c) tax benefit

d)its products

Interpretation- 10% of the respondants said choose HDFC LIFE for its returns, 30% of respondents are for security, 40% are said for tax benefits,20% are for its products.

4. From how many years you join with HDFC life insurance? a)less than one year than 5 years b)from 1-3years c)from 3-5 years d)greater

Option a) <1 year b) 1-3 years c) 3-5 years d)>5 years Total

No. of Respondents 30 27 23 20 100

Percentage 30% 27% 23% 20% 100%

35 30 30 25 20 15 10 5 0 a) <1 year b) 1-3 years c) 3-5 years d)>5 years No. of Respondents 27 23 20

Interpretation- 30% of the respondents are from join with HDFC LIFE from <1year,27% are from 1-3 years,23% are from 3-5 years,20% are from >5 years.

5. How many times are you paid income tax? a )0times b)less than 5times c)more than 10times

Option a)0 -times

No. of Respondents 30

Percentage 30% 40%

b) less than 5-times 40

c) more than 5-times Total

30 100

30% 100%

No. of Respondents
No. of Respondents 40 30

a)0 -times

b) less than 5-times

Interpretation- 30% of the respondents said 0 times, 40% said less than 5times, 30% said more than 5times paid income tax.

6) Do you have knowledge that below on 200000 net incomes there is no Tax?

Option a) Yes b) dont know Total

No. of Respondents 66 34 100

Percentage 66% 34% 100%

No. of Respondents
a) Yes b) dont know

34%

66%

Interpretation- 66% of the respondents said Yes rest of them said they dont have exact idea.

7. Which type of Life Insurance you are having? a) Protection plan b) childrens plan plan c) investment and savings plan d) health

Option a) Protection plan b) childrens plan

No. of Respondents 33 27

Percentage 23 27 33

c) investment and 23 savings plan d) ) health plan Total 17 100

17 100

No. of Respondents
No. of Respondents 33 27 23 17

a) Protection plan

b) childrens plan

c) investment and savings plan

d) ) health plan

Interpretation- 33% of the respondents are having protection plans, 27 % are having childrens plan, 23% are having investment and savings plan, 17% are having health plans.

8.How will you rate the Tax beneficial schemes of HDFC Life Insurance?

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 10 33 57 0 100

Percentage 10 33 57 0 100

No. of Respondents
No. of Respondents 57

33

10 0 a)Excellent b) Very Good c) Good d) Bad

Interpretation: 10% of respondents feel that the Tax beneficial schemes provided by HDFC Life Insurance are Excellent where as 33% thinks that they are very good, 57% respondents think that it is good.

9.

What are the responses of the agents to get tax planning decisions? Option No. Respondents a)Excellent b) Very Good c) Good d) Bad Total 13 27 60 0 100 13% 27% 60% 0% 100% of Percentage

20 18 16 14 12 No of respondents10 8 6 4 2 0 a)Excellent b) Very Good c) Good d) Bad

No of respondents

options

Interpretation:- 13% of respondents found that the responses are excellent & 27% of the respondents found it very good, 60% of the respondents are good. No one is with the opinion that the Tax beneficial schemes are of bad quality.

10.

What do you think regarding the personal attention by the agents of HDFC

Life Insurance towards the Taxpayers? Option a)Excellent b) Very Good c) Good d) Bad Total No. of Respondents 30 23 47 0 100 Percentage 30% 23% 47% 0% 100%

16 14 12 10 No of respondents 8 6 4 2 0 options a)Excellent b) Very Good c) Good d) Bad

No of respondents

Interpretation: - 30% of respondents found the personal attention by the agents of HDFC Life Insurance towards Taxpayers are excellent & 23% of the respondents found it very good, 47% of the respondents found are good.

11.What do you think about the returns of different Investment modes of HDFC Life Insurance?

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 37 37 26 0 100

Percentage 37% 37% 26% 0% 100%

12 10 8 No. of Respondents 6 4 2 0 a)Excellent c) Good

No. of Respondents

Options

Interpretation:- 37% of respondents found the returns of different Investment modes of HDFC Life Insurance are excellent & 37% of the respondents found it very good, 26% of the respondents found that the returns of different Investment modes of HDFC Life Insurance is good.

12.How will you rate the after investment facilities provided by the HDFC Life Insurance? Option a)Excellent b) Very Good c) Good d) Bad Total No. of Respondents 8 12 10 0 100 Percentage 26% 40% 34% 0% 100%

No. of Respondents

12 10 8 6 4 2 0 a)Excellent b) Very GoodGood d) Bad c) Options

No. of Respondents

Interpretation:- 26% of respondents found the rate after investment facilities provided by the HDFC Life Insurance are excellent & 40% of the respondents found it very good, 34% of the respondents found the is good.

13. Option a)Yes

By taking insurance did you get 100% tax benefit? No. of Respondents 71 29 100 Percentage 71% 29% 100%

b) dont know Total

No of Respondents

30 25 20 15 10 5 0 Yes Options NO

Interpretation :71% of respondents said yes, 29% respondents they dont know this because their accounts looking after by chartered accounts.

14.Are you satisfied with the different Investment modes of HDFC Life Insurance. Option a)Yes b) No Total No. of Respondents 97 3 100 Percentage 97% 3% 100%

30 25 20 No of Respondents 15 10 5 0 Yes Options NO

Interpretation: - 97% respondents are satisfied with the charges of HDFC Life Insurance where as 3% are not satisfied.

15. How will you rate the overall Tax beneficial schemes of HDFC Life Insurance?

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 30 23 47 0 100

Percentage 30% 23% 47% 0% 100%

30 25 20 No of Respondents 15 10 5 0 Yes Options NO

Interpretation:- 30% of respondents found the rate the overall Tax beneficial schemes of HDFC Life Insurance are excellent & 23% of the respondents found it very good, 47% of the respondents found that the returns of different Investment modes of HDFC Life Insurance is good.

16.Are you prefer only insurance as tax beneficial tool or do you used to prefer other investment modes too?

Option a)only insurance b) other modes too Total

No. of Respondents 26 74 100

Percentage 26% 74% 100%

120 100 80 60 40 20 0 No. of Respondents Percentage

a)only insurance b) other modes too Total

Interpretation- 26% respondents said only insurance sector rest of respondents said they prefer other options too.

UNIT -7 FINDINGS&SUGGESTIONS

OBSERVATIONS & FINDINGS Interpretation: 10% of respondents feel that the Tax beneficial schemes provided by HDFC Life Insurance are Excellent where as 33% thinks that they are very good, 57% respondents think that it is good. Interpretation:- 13% of respondents found that the responses are excellent & 27% of the respondents found it very good, 60% of the respondents are good. No one is with the opinion that the Tax beneficial schemes are of bad quality. Interpretation: - 100% of respondents found the personal attention by the agents of HDFC Life Insurance towards Taxpayers are excellent & 23% of the respondents found it very good, 47% of the respondents found are good. Interpretation:- 26% of respondents found the rate after sale facilities provided by the HDFC Life Insurance are excellent & 40% of the respondents found it very good, 34% of the respondents found the is good. Interpretation: - 100% respondents are you satisfied with agency/dealer. Interpretation: - 97% respondents are satisfied with the charges of HDFC Life Insurance where as 3% are not satisfied. Interpretation: - 100% of respondents found the rate the overall Tax beneficial schemes of HDFC Life Insurance are excellent & 23% of the respondents found it very good, 47% of the respondents found that the Tax benefit of different Investment modes of HDFC Life Insurance is good. Interpretation: - 97% respondents think that HDFC Life Insurance is preferred because of its Tax benefit . HDFC Life Insurance

SUGGESTIONS
There are several investments to choose from these include equities, debt, real estate and gold. Each class of assets has its peculiarities. At any instant, some of those assets will offer good returns, while others will be losers. Most investors in search of extraordinary investments try hard to find a single asset. Some look for the next infosys, other buys real estate or gold. Many of them deposit their savings in the Public Provident Fund (PPF) or post office deposits, others plump for debt mutual funds. Very few buy across all asset classes or diversify within an asset class. Therefore it has been widely said that Dont put all your eggs in one basket. The idea is to create a portfolio that includes multiple investments in order to reduce risk.

Things changed in early may 2006 since then the stock market moved up more than 70%, while many stocks have moved more. Real estate prices are also swinging up, although it is difficult to map in this fragmented market. Gold and Silver prices have spurted.

Bonds continue to give reasonable returns but it is no longer leads in the comparative rankings. Right now equity looks the best bet, with real state coming in second. The question is how long will this last? If it is a short-term phenomenon, going through the hassle of switching over from debt may not be worth it. If its a long-term situation, assets should be moved into equity and real estate. This may be long-term situation. The returns from the market will be good as long as profitability increases. Since the economy is just getting into recovery mode, that could hold true for several years. Real estate values, especially in suburban areas or small towns could improve further. The improvement in road networks will push up the value of far-flung development. There is also some attempt to amend tenancy laws and lift urban ceilings, which have stunted the real estate market. My gut feeling is that a large weightage in equity and in real estate will pay off during 2007-2008. But dont exit debt or sell off your gold. Try and buy more in the way of equity and research real estate options in small towns/suburbs.

Regardless of your means of method, keep in mind that there is no generic diversification model that will meet the needs of every investor. Your personal time

horizon, risk tolerance, investment goals, financial means, and level of investment experience will play a large role in dictating your investment experience will play a large role in dictating your investment mix. Start by figuring out the mix of stock, bonds and cash that will be required to meet your needs. From there determine exactly which investments to in completing the mix, substituting traditional assets for alternatives as needed.

UNIT -8 CONCLUSION&BIBLIOGRAPHY

CONCLUSIONS Taxpayer Investment modes is a measure of how Tax beneficial schemes and Tax beneficial schemes supplied by a company meet or surpass Taxpayer expectation In a competitive marketplace where businesses compete for Taxpayers, a Taxpayer Investment mode are seen as a key differentiator and increasingly has become a key element of business strategy. For this we have done project on Taxpayer Investment modes of HDFC Life Insurance. It is found that majority of respondent have use Savings & Investment modes Tax beneficial schemes from HDFC Life Insurance. 97% respondents think that HDFC Life Insurance is preferred because of its Tax benefit. So finally both below the hypothesis are proved:

It has been found that majority of respondent have use Savings & Investment modes Tax beneficial schemes from HDFC Life Insurance. 100% of respondents satisfied with the Tax beneficial schemes provided by HDFC Life Insurance. 10% of respondents feel that the Tax beneficial schemes provided by HDFC Life Insurance are Excellent where as 33% thinks that they are very good, 57% respondents think that it is good. 13% of respondents found that the responses are excellent & 27% of the respondents found it very good, 60% of the respondents are good. No one is with the opinion that the Tax beneficial schemes are of bad quality.

BIBLIOGRAPHY
Text Books

Investment Analysis and Portfolio Management Investments Security Analysis and Portfolio Management

- Prasanna Chandra - Sharpe & Alexander - Fischer & Jordan

Magazines Business Today Websites

www.moneycontrol.com www.investopedia.com www.google.com www.hdfcLife.com www.wikipedia.com

BALANCE SHEETS

Questionnaire
1. How much your annual income? a)<100000 b)1-2.5 lacks c)2.5-5 lacks d)>5lacks

2. 2. Why are you choosing life insurance to invest your money? a) Risk coverage b) tax benefit c) secured returns d) future needs

3. Why are you chosen HDFC life insurance? a) Returns b) security c) tax benefit d) its products

4. From how many years you join with HDFC life insurance? a)less than one year than 5 years 5. How many times are you paid income tax? a )0times b)less than 5times c)more than 10times b)from 1-3years c)from 3-5 years d)greater

6) Do you have knowledge that below on 200000 net incomes there is no Tax? a)yes b)dont know

7. Which type of Life Insurance you are having? a) Protection plan b) childrens plan health plan 8.How will you rate the Tax beneficial schemes of HDFC Life Insurance? a)excellent b)very good c)good d)bad c) investment and savings plan d)

9..What are the responses of the agents to get tax planning decisions? a)excellent b)very c)good d)bad

10. What do you think regarding the personal attention by the agents of HDFC Life Insurance towards the Taxpayers?

a)excellent

b)very good

c)good

d)bad

11.What do you think about the returns of different Investment modes of HDFC Life Insurance? a) Excellent b)very good c)good d)bad

12.How will you rate the after investment facilities provided by the HDFC Life Insurance? a)excellent b)very good c)good d)bad

13.By taking insurance did you get 100% tax benefit? 14.Are you satisfied with the different Investment modes of HDFC Life Insurance. a)Yes b) No

15. How will you rate the overall Tax beneficial schemes of HDFC Life Insurance? a)excellent b)very good c)good d)bad

16.. Are you prefer only insurance as tax beneficial tool or do you used to prefer other investment modes too? a)only insurance b)other modes too