birla-sun-life-insurance.doc
TRANSCRIPT
1
INSURANCE
The meaning of insurance: Insurance is a policy from a large financial institution that offers a
person, company, or other entity reimbursement or financial protection against possible future
losses or damages.
A simple example will make the meaning of insurance easy to understand. A biker is always
subjected to the risk of head injury. But it is not certain that the accident causing him the head
injury would definitely occur. Still, people riding bikes cover their heads with helmets. This
helmet in such cases acts as insurance by protecting him/her from any possible danger. The
price paid was the possible inconvenience or act of wearing the helmet; this i.e. equivalent to the
insurance premiums paid.
Major types of insurances are as mentioned below:
Life insurance: Descendant’s family receives financial benefits. Life insurances also
offer paid proceeds to the beneficiary.
Automobile insurance: Usually automobile insurances cover damages and legal
financial expenditures of the automobile driver.
Health insurance: Health insurance covers the expenditures associated to treatment and
medical expenditures.
Credit insurance: Borrowers often fail to repay debts, loans and mortgages due to
certain unavoidable circumstances, credit insurances can be of great help during such
crisis.
Property insurance: Property protection insurance provides protection from risks
associated to theft, fire, floods etc.
Life insurance
Life insurance or life assurance is a contract between the policy owner and the insurer, where
the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or
2
individuals' death or other event, such as terminal illness or critical illness. In return, the policy
owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums.
How life insurance works
There are three parties in a life insurance transaction; the insurer, the insured, and the owner of
the policy (policyholder), although the owner and the insured are often the same person. For
example, if Mr. Rajan buys a policy on his own life, he is both the owner and the insured. But if
Mrs. Anita, his wife, buys a policy on Rajan’s life, she is the owner and he is the insured. The
owner of the policy is called the grantee (he or she will be the person who will pay for the
policy). Another important person involved is the beneficiary. The beneficiary is the person or
persons who will receive the policy proceeds upon the death of the insured. The beneficiary is
not a party to the policy, but is designated by the owner, who may change the beneficiary unless
the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that
beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value.
The policy, like all insurance policies, is a legal contract specifying the terms and conditions of
the risk assumed. Special provisions apply, including a suicide clause wherein the policy
becomes null if the insured commits suicide within a specified time for the policy date (usually
two years). Any misrepresentation by the owner or insured on the application is also grounds for
nullification. Most contracts have a contestability period, also usually a two-year period; if the
insured dies within this period, the insurer has a legal right to contest the claim and request
additional information before deciding to pay or deny the claim.
The face amount of the policy is normally the amount paid when the policy matures, although
policies can provide for greater or lesser amounts. The policy matures when the insured dies or
reaches a specified age. The most common reason to buy a life insurance policy is to protect the
financial interests of the owner of the policy in the event of the insured's demise. The insurance
proceeds would pay for funeral and other death costs or be invested to provide income replacing
the deceased's wages. Other reasons include estate planning and retirement. The owner (if not the
insured) must have an insurable interest in the insured, i.e. a legitimate reason for insuring
another person’s life. The insurer (the life insurance company) calculates the policy prices with
an intent to recover claims to be paid and administrative costs, and to make a profit.
3
MAJOR PLAYERS OF INDIA IN INSURANCE
Reliance Life Insurance is a part of the Reliance group. It is one of the partners of Reliance
Capital Ltd which is a Anil Dhirubhai Ambani Group. Reliance Capital is one India's most
dominant private sector financial services companies. They offer insurance products which help
you with savings as well as give you protection.
Canara HSBC Life is a joint venture of Canara Bank, HSBC Insurance (Asia pacific) &
Oriental bank of Commerce. The Company got its approval from IRDA in June 2008 and from
that commencing its business. They have more than 4100 branches all over India.
DLF pramerica Life Insurance Company Ltd. is a joint venture between DLF Limited &
Prudential International Insurance Holdings Limited. DLF Pramerica believes in delivering a
secure & enrich life to there customers.
MetLife One of the fastest growing insurance company in India is MetLife. The company started
its operations in between 2000-2001. They have a range of various products to offer.
ICICI Prudential ICICI Bank with Prudential plc, both well known & strong financial
institutions came together in December 2000 to form an insurance company - ICICI Prudential
Life Insurance.
Max New York Life Max India’s leading multi business corporation & New York Life joined
there hands in 2000.The company started there operations in 2001. The company is involved in
Life & health products.
Bajaj Allianz Bajaj who are into iron & steel, finance, insurance & etc and Allianz who
provides financial services when came together they formed Bajaj Allianz Life Insurance
Company.
Bharti AXA Bharti AXA Life Insurance is a joint venture between Bharti & AXA. The
company started its functionality in December 2006 and they always believe to be a strong
financial institute.
4
HDFC Standard Life HDFC Standard Life Insurance is a joint venture between Housing
Development Finance Corporation Limited & a Group of Standard Life Plc.The Company
started commencing its business in December 2000.
AEGON Religare AEGON Religare Life Insurance Company Ltd is a joint venture with
AEGON, Religare and Bennett, Coleman & Company a part of Times Group. AEGON Religare
Life Insurance company was launched in July 2008.
Kotak Mahindra A joint venture of Kotak Mahindra group & Old Mutual plc is known as
Kotak Mahindra Old Mutual Funds. The Company started commencing its business in 2001. The
company aim is to help customers in making there financial decisions.
Future Generali Life Future Generali is a joint venture between Future Group of India & Italy
based Generali Group.Future Generali in India is into both Life & Non Life businesses in India.
The company wants to provide a financial security to all.
SBI Life SBI Life Insurance Company Limited is a joint venture between State Bank of India
and BNP Paribas Assurance. It is present in more than 41 countries across the world. SBI Life
offers a variety of plans in life insurance and pension.
Shriram Life Shriram Life Insurance Company is a joint venture between Shriram Group and
Sanlam Group.Shriram Group is one of India’s most esteemed financial services & Sanlam
Group is one of the largest life insurance providers of South Africa.
TATA AIG The TATA Group and American International Group Inc together formed Tata AIG
Life Insurance Co. Ltd.Tata Group holds 74% stake in the insurance venture with AIG holding
the balance 26%. They started their operations in April 2001
Aviva Aviva, one of UK's largest insurance company and world's 5th largest insurance group. It
was one of the first international insurance company to set up its office in India in the year 1995.
They introduced the concept of banc assurance in India.
5
IDBI Fortis IDBI Fortis Life Insurance Co. Ltd is a joint venture between three financial
institutes; they are IDBI Bank, Federal Bank and Fortis. They introduced there plans in March
2008. IDBI owns 48% equity while Federal Bank and Fortis own 26% equity each.
Sahara The Sahara Pariwar stepped into the insurance business by launching Sahara India Life
Insurance Co. Ltd. They received the IRDA license in February 2004 and started their operations
in October 2004. They are the first solely owned private sector insurance company in India.
ING VYSYA ING Life was established in 2001 as a joint venture between ING Insurance
International B.V. (INGI), ING Vysya Bank Limited and GMR Industries Limited. At present,
INGI, Exide Industries Limited, Ambuja Cement Ltd, Enam Group are the joint venture partners.
Star Union Star Union Dai-ichi Life Insurance Co.Ltd. is formed by three various financial
institutions. Bank of India, Union Bank of India and Dai-ichi Mutual Life Insurance Company
This firm was incorporated in the year 2007 and got their IRDA license on the 26th Dec 2008.
Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
6
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.
7
Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla
Group, one of the largest business houses in India and Sun Life Financial Inc., a leading
international financial services organisation. The local knowledge of the Aditya Birla Group
combined with the expertise of Sun Life Financial Inc., offers a formidable protection for your
future.
The Aditya Birla Group has a turnover of close to Rs. 119000 crores, with a market
capitalisation of Rs. 133875 crores (as on 31st March 2008). It has over 100,000 employees
across all its units worldwide. It is led by its Chairman - Mr. Kumar Mangalam Birla. Some of its
key companies are Hindalco, Grasim and Aditya Birla Nuvo.
Sun Life Financial
Sun life financial –based in Canada-started in 1865.
It operates in all the important markets of the world like Canada, the United States, the United
Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.
8
Sun Life Financial Inc. has assets under management of over US$404.7 billion (as on 31st
March, 2008). It is a leading performer in the life insurance market in Canada.
Brands Of Aditya Birla Group
9
Birla Sun Life Insurance (BSLI) has been operating for 9 years. It has contributed significantly to
the growth and development of the life insurance industry in India. It pioneered the launch of
Unit Linked Life Insurance plans amongst the private players in India. It was the first player in
the industry to sell its policies through the Bancassurance route and through the Internet. It was
the first private sector player to introduce a Pure Term plan in the Indian market. BSLI has
covered more than 2 million lives since it commenced operations. And its customer base is is
spread across more than 1500 towns and cities in India. The company has a capital base of Rs.
1274.5 crores as on 31st March 2008.
With an experience of over 9 years, BSLI has contributed significantly to the growth and
development of the life insurance industry in India and currently ranks amongst the top 5 private
life insurance companies in the country.
Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit.
It was the first Indian Insurance Company to introduce “Free Look Period” and the same was
made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered
the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish
credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice
10
to disclose portfolio on monthly basis. These category development initiatives have helped BSLI
be closer to its policy holders’ expectations, which gets further accentuated by the complete
bouquet of insurance products (viz. pure term plan, life stage products, health plan and
retirement plan) that the company offers.
Add to this, the extensive reach through its network of 600 branches and 1,75, 000 empanelled
advisors. This impressive combination of domain expertise, product range, reach and ears on
ground, helped BSLI cover more than 2 million lives since it commenced operations and
establish a customer base spread across more than 1500 towns and cities in India. To ensure that
our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding
claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the best Turn around Time
according to LOMA on all claims Parameters. Such services are well supported by sound
financials that the Company has. The AUM of BSLI stood at Rs. 8165 crs as on February 28,
2009, while as on March 31, 2009, the company has a robust capital base of Rs. 2000 crs.
Achievements of BSLI
1st to introduce ULIP fund options.
1st to launch illustrations so that customers understand the products better before they
buy.
1st to issue NAVs of funds for better transparency.
1st to disclose portfolio on a monthly basis.
1st to introduce “Free Look Period” and the same was made mandatory by IRDA for all
other Life Insurance Companies.
11
12
13
SWOT ANALYSIS OF BSLI
STRENGTH:
Multi-channel distribution and one of the largest distribution networks in India.
1 Million Policies sold within 3 and half years.
Training process of the company is very strong.
According to the change in surrounding environment like changes in customer
requirement.
WEAKNESS:
Company does not penetrate on the rural market at a time.
There is no plan for the low income group.
Fees for the advisor is high than the other companies.
OPPORTUNITY:
Insurance market is very big, where company can expand its business easily.
It has many ULIP plans so it can grow in near future.
THREATS:
‘OLD HABITS DIE HARD’: Its still difficult task to win the confidence of public
towards private company.
The company is facing major threats from LIC etc. -which is an government company.
Plans for all income groups are not available which can create adverse effect later on the
market share of the company.
14
MAJOR COMPETITOR AT A GLANCE LIC (LIFE INSURACE
CORPORATION)
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand
the operations and place a branch office at each district headquarter. re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the Corporate office. LIC’s Wide Area Network covers 100 divisional
offices and connects all the branches through a Metro Area Network. LIC has tied up with some
Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s
ECS and ATM premium payment facility is an addition to customer convenience. Apart from
on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad,
Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision
of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing and many other conveniences in
the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued
over one crore policies during the current year. It has crossed milestone of issuing
15
1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business.
Birla Sun Life Insurance Co. Ltd
Following are the Life Insurance plans that Birla Sun life Insurance Company Ltd.
1.)Birla Sun Life Insurance Term Plan - This plan can take care of your financial
commitments of yours towards your family by providing large cover at low cost. Minimum
age of entry for this plan is 18-55 and maximum maturity age is 70 years.
2. Birla Sun Life Insurance Premium Back Term Plan - This is a low cost life cover
promises you to refund the entire premium on maturity or death. Two options are also there
to choose 100% premium back or 125% premium back. Maximum term period for this plan
is 20 years.
3. Birla Sun Life Insurance Guaranteed Bachat Plan - It’s an non participating
endowment plan offers you guaranteed returns and chance to earn survival benefit from the
3rd year onwards. You can withdraw this benefit each tear or can use it as to pay the
premium dues.
4. Birla Sun Life Insurance Money Back Plus Plan - This is also a non-participating
endowment plan, which gives you maturity and survival both benefits. One remarkable point
is that on every policy anniversary it increases your cover by an equal amount of your base
premium.
5. Birla Sun Life Insurance Gold-Plus II - It’s an investment plan offering nine-funding
option to choose and 100% equity fund option also. Free unlimited switches are given to you
to manage your investments. This plan offers good liquidity to you.
16
6. Birla Sun life insurance Platinum Plus - It is a unit linked, non participating insurance
plan. In this plan, the investment risk is borne by the policyholder but not if this policy is
detained till maturity.
7. Birla Sun Life Insurance Saral Jeevan Plan - In today’s fast life it’s really easy to buy
an insurance plan, which you immediately can purchase just by providing three health
statements to the company. Bsli Saral Jeevan is the best option to go for.
8. Birla Sun Life Insurance Supreme-Life - It’s a unit linked non-participating plan
providing 8-fund options to choose. It gives a choice of two death benefits.
9. Birla Sun Life Insurance Dream Plan - It’s a unit-linked policy, which provides you
guaranteed returns, 0% allocation charges, and option to double or triple the guaranteed
maturity.
10. Birla Sun Life Insurance ClassicLife Premier - It will give you guaranteed additions in
the form of guaranteed units and a good choice of 8 investment funds are also there. You are
free to choose the term period of 10,20,30 or whole life.
11. Birla Sun Life Insurance SimplyLife - It ensures a lifetime of tax-free investments to
fulfill the needs of your dear ones. It’s a market related plan provides you a good death
benefit amount.
12. Birla Sun Life Insurance PrimeLife Premier - It’s a single time investment with top up
options. It keeps you hassle free and provides you guaranteed returns at regular intervals.
13. Birla Sun Life Insurance PrimeLife - It is a single premium policy gives you the
benefit of life insurance and investments as well. It’s a non-participating ULIP policy.
14. Birla Sun Life Insurance Flexi Cash Flow - For this policy you can pay lump sum
17
premium payment at regular intervals. It will give you 3% guaranteed returns on net policy
charges.
15. Birla Sun Life Insurance Flexi Save Plus - This plan will give you the choices of 3
fund options, maturity ages & guaranteed returns of 3%.
16. Birla Sun Life Insurance Flexi Life Line - This would provide you a life long cover till
100 years of age and will give you the option of tax-free partial withdrawals.
17. Birla Sun Life Insurance Single Premium Bond - This plan gives you the opportunity
to make one time investment with no medical tests and will also gives you the facility of high
entry age. It’s a short term investment plan provides you the option of 5 years or 10 years
term period.
18. Birla Sun Life Insurance Freedom 58 - It’s a non- participating ulip plan. It helps you
accumulate your premiums and the investment return there of into a corpus of your
retirement.
19. Birla Sun Life Insurance Flexi Secure Life Retirement Plan II - This will provide you
the option to take a life cover or not. You can choose your retirement age yourself whether
you want to prepone/postpone it.
20. Birla Sun Life Insurance Children's Dream Plan - It’s a unit-linked policy, which
provides you guaranteed returns, 0% allocation charges, and option to double or triple the
guaranteed maturity.
18
Various Plans offered by LIC are as follows :
Endowment Assurance Plans
1. Jeevan Amrit : This plan is designed for a higher cover at a lower cost. In this plan premium
payment is limited to 3 or 4 or 5 years and the premium payable during the first year is higher
than the premiums payable in subsequent years.
2. New Janaraksha Plan : Is an Endowment Assurance plan that provides financial protection
against death throughout the term of plan. It pays the maturity amount on survival to the end of
the term.
3. Jeevan Mitra(Double Cover Endowment Plan) : Is an endowment plan which takes care of
the financial needs even if death of the policyholder for the whole term of the plan.
4. Jeevan Mitra (Triple Cover Endowment Plan) : Is an endowment plan where thrice the
Sum Assured plus all bonuses on the basic sum assured to date is payable in a lump sum upon
the death of the life assured.
5. The Endowment Assurance Policy : This policy has a provisions for the family of the Life
Assured in event of his early death and also assures a lump sum at a desired age.
6. The Endowment Assurance Policy-Limited Payment : In this policy the payment of
premium can be limited either to a single payment or to a term shorter than the policy.
Children Plans
1. Jeevan Anurag : Is plan designed for the children educational requirements . This plan can be
taken on the parent’s life. The basic sum assured is given immediately on the death of the life
assured during the term of the policy.
2. Jeevan Kishore : Is a plan which can be availed by the parent or grand parents of the
children. It is an endowment assurance plan for children of less than 12 years of age.
3. Jeevan Chhaya : It is a plan where financial protection is given against death during the term
of the plan. It is an Endowment Assurance plan. Besides this benefit one-fourth of Sum Assured
19
is payable at the end of each of last four years of policy term irrespective if the life assured dies
or survives the duration of the policy.
4. Komal Jeevan : Is a Money Back Plan which can be bought by the parent or grand parent for
their child from the age of 0-10years. This plan gives financial protection against death during
the duration of the plan with periodic payments on survival at specified durations.
5. Child Future Plan : A policy where the future needs like education, marriage and other
requirements are taken care of. This plan provides a benefit which not only takes care of the risk
cover of the child during the policy but also after 7 years of the policy being expired.
6. Child Career Plan : A plan to meet the educational and other needs of the child. It provides
the risk cover on the life of child during the policy term as well as 7 years after the policy has
expired. There are also Survival benefits given to the life assured at the end of a specific
duration.
7. Child Fortune Plan : Is a unit linked plan which offers long term capital appreciation.
8. Marriage Endowment Or Educational Annuity Plan : This is an Endowment Assurance
plan that provides for benefits on or from the selected maturity date to meet the
Marriage/Educational expenses of the named child.
Money Back Plan
1. Bima Bachat : Is a money-back policy which offers financial security and assurance to the
policy holder and his family. The policy holder has to pay only one premium.
2. Money Back-20 years : Is an endowment plan where periodic payments of partial survival
benefits are paid during the term of the policy till the policy holder is alive.As the policy name
goes this plan 20% of the sum assured is payable after 5,10,15 years and the balance 40%
accrued bonus is payable at the 20th year.
3. Money Back 25 years : Is the same as the above plan only in this plan the 40% accrued bonus
is payable at the 25th year.
20
Pension plans
1. New Jeevan Dhara - I : is a Deferred Annuity plans that allows the policyholder to make
provision for regular income after the selected term.
2. New Jeevan Suraksha - I : Is a deferred annuity plan.
3. Jeevan Nidhi : Is a deferred annuity plan with profits.
4. Jeevan Akshay - VI : By paying a lump sum amount this immediate annuity plan can be
bought.
Unit Plans
1. Child Fortune Plus : Is a plan for children and to meet their educational needs. Its a unit
linked plan with long term capital appreciation.
2. Fortune Plus : It is a unit linked assurance plan where premium payment term (PPT) is 5
years and the premium payable in the first year will be 50% of total premium payable under the
policy.
3. Market Plus : Is a unit linked pension plan where after a specific period the pension is paid.
4. Money Plus - I : Is a unit linked Endowment plan which has investment plus insurance during
the term and you can pay regular premiums.
5. Profit Plus : It is a unit linked Endowment plan where the premium payment term (PPT) is
limited to single lump sum, or uniformly over 3, 4 or 5 years.
Whole Life Plans
1. Jeevan Anand : Is a combination of two plans- Endowment Assurance and Whole Life plan.
2. Jeevan Tarang : This is a with-profits whole of life plan which provides for annual survival
benefit at a rate of 5½ % of the Sum Assured after the chosen Accumulation Period.
21
3. The Whole Life Policy : Is a plan mainly to provide for payment of sum assured plus bonuses
on the death of the policyholder.
Golden Jubliee Plan
New Bima Gold : Where the premiums are paid back during the policy term in installments ,
besides that life insurance cover is given during the also at the extended term of the plan.
Some main Plans of BSLI:
(1) Birla Sun life insurance Platinum Plus - It is a unit linked, non participating insurance plan.
In this plan, the investment risk is borne by the policyholder but not if this policy is detained till
maturity.
Policy parameters
Entry age 18-70
Minimum annual premium Rs. 50000
Minimum sum assured 5*annual premium
Policy term 10 years
Premium paying term 3 years
Premium and sum assured
You can pay your policy premium annually, half-yearly, quarterly or monthly, subject to a
minimum installment premium of:
Rs. 50,000 per annum
Rs. 25,000 half-yearly
Rs. 15,000 quarterly; or
Rs. 10,000 per month (3 monthly installments required at issue)
You choose your Sum Assured (minimum 5 x annual premium).
22
Risk profile
0-40% in money market & cash
0-100% in debt instruments & derivatives
0-100% in equities & equity related securities.
Maturity Benefit
On maturity, your Fund Value will be paid to you.
In addition, we will pay an amount equal to:
the number of units under your policy at that time; times
the excess, if any, of the Guaranteed Maturity Unit Price over the then prevailing unit
price
Death Benefit
In the unfortunate event of the death of the life insured prior to the maturity date of the
policy, we will pay to the nominee the greater of (a) the Fund Value or (b) the Sum Assured
reduced for partial withdrawals as follows:
Before the life insured attains the age of 60, the Sum Assured payable on death is
reduced by partial withdrawals made in the preceding two years.
Once the life insured attains the age of 60, the Sum Assured payable on death is
reduced by all partial withdrawals made from age 58 onwards.
Partial withdraw
Partial withdraw after 3 complete policy years.
Minimum partial withdraw rs.5000
Policy surrender After 3 policy years and you will get 100% fund value at that time.
23
(2) Birla Sun Life Insurance children’s Dream Plan –
Policy parameters
Entry AgesLife Insured (parent): 18 years – 60 years
Nominee (child) : 30 days – 13 years
Term 18 years less the age of child at entry
Premium paying
frequency
Regular policy premiums can be paid yearly, half-yearly,
quarterly or monthly (for ECS only)
Addition of riders Accidental Death & Dismemberment Benefit (ADD)
The annual policy premium is based on:
The guaranteed maturity benefit and option you choose.
The enhanced sum assured you desire.
The plan term and your gender and age at entry.
Guaranteed Fund
Value
Equals all premiums paid, less charges and guaranteed maturity
benefit(s), accumulated at 3% per annum
Partial
WithdrawalsAllowed after 3 complete policy years
Investment Funds Protector, Builder, Enhancer
24
AT Death
Benefit
The sum assured is paid to the nominee upon the death of the life insured (parent)
The new life insured is the child and new owner is appointed as per your wishes.
The policy is continued as usual except:
•All riders and risk charges will cease
•Only the policy administration charge and fund management charge continue,
and
•BSLI will start paying the Maturity Continuation Benefit on a monthly basis
until the policy matures.
In case of death of the new life insured (child) prior to the end of the Term, higher
of 105% of the Fund Value or the Guaranteed Fund Value will be paid and the
policy will be terminated.
Charges of policy
Premium allocation charges
Fund management charges
Mortality charges
Surrender charges etc.
(3) Birla Sun Life Insurance Saral Jeevan Plan – The saral jeevan plan provides the dual
benefit of protection and investment. So it is the ideal policy if you want to secure your life and
build wealth at the same time.
Poicy parameters
Entry age 18-55
Policy term 10, 15, and 20 years
Age at maturity 65 or less
Mode of Premium Payment - Annual, Semi Annual, Quarterly, Monthly.
25
Maturity Benefit
Maturity benefit will be sum assured plus fund value at the end of maturity time.
Death Benefit – Your nominee will receive both sum assured and fund value in the unfortunate
event of death.
Investment Funds
Protector
Builder
Enhancer
Charges of Policy
Premium Allocation Charge- Nil (This means all of your policy premium will be
invested in the investment funds of your choice).
Fund Management Charge
Mortality charges
Surrender charges etc.
(4) Birla Sun Life Universal Health Plan-
The universal health plan is in addition to the benefit amount payable under each health benefit.
This unique benefit helps you and your family with out of pocket health related expenses.
Policy parameters
Entry Ages 18 years – 65 years
Term 3 years
Premium paying frequency
policy premiums can be paid yearly, half-yearly, quarterly or monthly
Premium According to age of the insured person. (e.g. for 25 – Rs. 4756 p.a., for 45- Rs. 6725 p.a., for 55- Rs. 9724 p.a.).
26
Benefits –
1. BSLI pay a fixed benefit amount of Rs. 1000 per day in Hospital plus Rs. 1000 per day in
Intensive Care Unit (ICU).
In case of an admission for surgical management :
2. if the surgery is listed in covered surgeries: BSLI pay a fixed benefit amount based on the
grade of the covered surgery-Rs. 100000, Rs. 50000, Rs. 25000, Rs. 15000 and Rs. 10000
for grade 1(major) to 5(minor) respectively.
3. if the surgery is not listed in the covered surgeries: BSLI pay a fixed benefit amount of
Rs. 2000 per day in hospital plus Rs. 1000 per day in ICU.
Tax benefit
The premium paid by you up to 15000 (Rs.20000 for senior citizens) p.a. to insure yourself
and/or your family, is eligible for tax benefit under section 80D of the income Tax Act, 1961,
which is subject to amendments from to time.
Death/Maturity benefit
This plan has no death benefit or maturity benefit. Furthermore, this plan provides for no
cash surrender value nor any policy loans.
(5) Birla Sun Life Retirement plan
Policy parameters
Entry Ages18 years – 80 years
Term
Premium paying frequencypolicy premiums can be paid yearly, half-yearly, quarterly or monthly
27
Premium Minimum Rs. 9600 p.a.(premium should be multiple of Rs. 1200)
Benefits
In the unfortunate event of death of the policyholder the nominee will receive the higher of:
75% of the base premium and all renewal base premiums paid. OR the surrender value at the
time plus all accumulated survival benefits.
Tax benefits
Under section 80CCC and 10(10A)
Partially withdraw
You can do partially withdraw min. Rs.5000
Some main plans of LIC
(1) Marriage Endowment Or Educational Annuity Plan : This is an Endowment Assurance
plan that provides for benefits on or from the selected maturity date to meet the
Marriage/Educational expenses of the named child.
Entry age 18 (min.) 60(max)
Sum assured 50000 (min) no limit (max)
Term 5 (min) 25 (max)
Mode of payment monthly, qtly, half yrly, yly,
FEATURES
The Marriage Endowment/ Educational annuity plan provides a sum assured to be kept aside for
the expenses of marriage or higher education of the policyholder's children. Premiums payable
28
for selected term or till death of the life Assured. Benefits will be given only after the selected
term.
Maturity benefits
Sum Assured + Bonus
Accident:
Accident benefit equivalent to basic sum assured would be available by paying appropriate
additional premiums in that behalf. An amount equivalent to Sum Assured become payable
immediately.
(2) Jeevan saral plan of LIC
Plan Details: This plan is appropriate for employees seeking life cover through Salary Savings
Schemes.
Eligibility:
Minimum Maximum
Age 12 Yrs (completed) 60 Nearest Birthday
Term 10 35
Age at maturity Maximum 70 years
In case of term rider, minimum and maximum age of entry will be 18 and 50 years respectively.
Further minimum sum assured will be Rs.1 lakh.
Premium:
29
Minimum premium: Rs 250 per month for entry age up to 49 years and Rs.400 per month for
entry age 50 years and above. The premium shall be in multiple of Rs.50 per month.
Premium Mode:
Yearly, Half yearly, Quarterly and Monthly under Salary Saving Scheme.
Survival Benefits:
The sum payable at maturity however differs for different entry ages and terms. On Maturity the
individual will receive maturity sum assured, plus Loyalty additions, if any.
The specimen Maturity Sums Assured (MSAs) per Rs.100/- monthly premium are given
below for some of the ages and terms:
Age at
EntryPolicy Term
10 yrs 15 yrs 20 yrs 25 yrs
20 11,156 19,628 28,039 36,839
40 10,431 17,839 24,598 30,854
50 8,442 13,444 16,164
Death Benefits:
Under this plan death cover will be same irrespective of age at entry and term. On death the
nominee will receive 250 times the monthly premium, plus return of premiums excluding
extra/rider premium premium.
(3) New Jeevan Suraksha Plan
This pension plan is a vehicle for planning a life long pension and is also tax deferred. Not only
can you plan a pension for life with the help of these annuities but these schemes also help you
reduce your tax liability.
30
POLICY PARAMETERS
Min Max
Entry Age 18 70
vesting age 50 79
deferment period 2 years35 years.
Premium Rs. 250 p.m.
Mode of paymentYearly, half yearly,
quarterly, monthly
Features
AMOUNT (Rs) >=1,00,000 < 2,00,000 >=2,00,000 < 5,00,000 >= 5,00,000
Rebates Available for
Single Premium 3% 4% 5%
Rebates Available for
Annual Premium 6% 7% 8%
31
Death Benefits
If death occurs within 10 years - 3% (interest on all premium given)
Between 11 to 20 years 4%
After 20 years 5%
(4) LIC's Market Plus Plan
It is a unit linked deferred pension plan. The policyholder can choose the plan with or without
risk cover. He can also choose the level of cover within the limits, which will depend on the
mode and amount of premium he/she desires to pay. The allocated premium will be utilized to
buy units as per the selected fund type.
The Policyholder's Unit Account will be subject to deduction of charges. Units will be allotted
and cancelled based on the Net Asset Value (NAV) of the respective fund of the date of
allotment / cancellation. There is no Bid-Offer spread (both the Bid price and Offer price of units
will be equal to the NAV). The NAV will be declared on a daily basis and will be based on the
investment performance, Fund Management Charges (FMC) and whether fund is expanding or
contracting under each fund type.
Policy parameters
Entry age 18-70
Premium (Min) Rs. 5,000 p.a. for Regular premium and Rs. 10,000 for Single premium
(Max) No limit
Vesting age 40-75
Sum Assured (min) NIL- (when no life cover is opted) Rs. 25,000 for Single premium, Rs.
50,000 for Regular premium (When life cover is opted)
(Max) Regular Premium - 20 times of the annualized premium.
32
Minimum Deferment period 5 years
Investment fund types:
Fund Type
Investment in
Govt. / Govt.
Guaranteed
Securities /
Corporate Debt
Short-term investments such as
money market
instruments(Including Govt.
Securities & Corporate Debt)
Investment in
Listed Equity
Shares
Bond Fund Not less than 80% 100% NIL
Secured Fund Not less than 65% Not more than 85%
Not less than
15% and not
more than 35%
Balanced Fund Not less than 50% Not more than 70%
Not less than
30% and not
more than 50%
Growth Fund Not less than 20% Not more than 40%
Not less than
60% and not
more than 80%
33
Comparison between some main products of BSLI and LIC
1) Comparison between BSLI’s Children dream plan and LIC’s Marriage Endowment Or
Educational Annuity Plan:
In BSLI plan policy term is 18 years less the age of child at entry.
But in LIC plan policy term is 5-25 years.
Premium paying frequency is almost same i.e yearly , half yearly, quarterly, monthly.
In case of death benefit: in BSLI plan the sum assured is paid to the nominee upon the
death of the life insured (parent). The new life insured is the child and new owner is
appointed as per your wishes.
In LIC plan if death occurs due to accident then basic sum assured is payable on death
immediately and further premiums are not payable.after expiry of the term again basic sum
assured + bonus is payable.
In BSLI fund value is guaranteed.
o In LIC plan fund value is not guaranteed.
2) Comparison between BSLI’s Saral jeevan plan and LIC’s Jeevan saral plan
In BSLI plan entry age is 18-55 years
In LIC plan entry age is 12-60 years
In BSLI policy term is 10, 15, and 20 years.
In LIC policy term is 10-35 years.
In BSLI plan max. Maturity age is 65 years
In LIC plan max. Maturity age is 70 years.
In BSLI min. premium is 10000 p.a.
In LIC plan min. premium is 5000p.a.
34
3) Comparison between BSLI’s Retirement plan and LIC’s New Jeevan Suraksha plan.
In BSLI plan entry age is 18-80 years
In LIC plan entry age is 18-70 yrs.
In BSLI plan vesting age is 10-40 yrs from entry age (Max. 90yrs.)
In LIC plan vesting age is 50-79 yrs.
In BSLI plan min. premium is 9600 p.a.
In LIC plan min. premium is 3000 p.a.
Premium paying frequency is same i.e yearly, half yearly, quarterly, and monthly
Death Benefits:
In BSLI plan the unfortunate event of death of the policyholder the nominee will receive
the higher of:
75% of the base premium and all renewal base premiums paid. OR the surrender value at
the time plus all accumulated survival benefits.
In LIC plan
If death occurs within 10 years - 3% (interest on all premium given)
Between 11 to 20 years 4%
After 20 years 5%
35
4) Comparison between BSLI Platinum plus plan and LIC Market plus plan
Entry age in BSLI and LIC is same i.e. 18-70 years.
In BSLI min. annual premium is 50000p.a.
In LIC plan premium is 10000p.a.
In BSLI plan maturity benefit is guaranteed
In LIC plan maturity benefit is not
guaranteed
36
OBJECTIVES OF STUDY
To determine and analyze the Market Potential of the Birla Sun Life Insurance Company
in Ludhiana City.
To study and determine the competitor (LIC) position in the market.
To analyze market share of Birla Sun Life Insurance products in Ludhiana city.
To analyze the customer satisfaction regarding LIC and BSLI.
37
RESEARCH METHODOLOGY
MEANING OF RESEARCH-
Before understanding Research Methodology, we should understand the meaning of
research. Research in common parlance refers to a search for knowledge. One can also define
Research as a scientific and systematic search for pertinence information on a specific topic. In
fact, research is an art of scientific investigation.
DEFINITION OF RESEARCH-
Research is a systematized effort to gain new knowledge”
Redmann & Mory
MEANING OF RESEARCH METHODOLOGY-
Research Methodology, it is a way to systematically solve the research Problem. It may be
understood as a science of studying how research is done scientifically. In it we study the various
steps that are generally adopted by the researcher in studying his research problem along with the
logic behind them. It is necessary for the researcher to know not only the research.
Data Collection: - The objectives of the project are such that both primary and secondary data is
required to achieve them. So both primary and secondary data was used for the project. The
mode of collecting primary data is questionnaire mode and sources of secondary data are various
magazines, books, newspapers, & websites etc.
Primary data
The primary data are those data which are collected afresh and for the first time, and thus happen
to be original in character.
38
Secondary data
The secondary data on the other hand, are those which have already been collected by someone
else and which have already been passing through the statistical process.
Sample size –
100 people of Ludhiana City were selected
Research ----- Purposive research
39
40
1) Do you think that investment in Insurance sector is good option?
Particulars No. of respondents
Yes 90
No 10
No. of respondents
yes, 90
no, 10
yes
no
Interpretation : 90 people say that investment in insurance sector is good option and 10 are
saying not.
41
2) Which company’s policy do you have?
Particulars No. of respondents
BSLI 40
LIC 60
BSLI
LIC
No. of respondents
40
60
0
10
20
30
40
50
60
Interpretation: 40 people have BSLI policies and 60 have LIC.
42
3) Which type of policy you have?
Particulars No. of respondents
LIC
No. of respondents
BSLI
Whole life plan 20 10
Retirement plan 10 4
Children plan 18 22
Health plan 6 4
Golden jubilee plan 6 0
Total 60 40
20
10
18
6 6
10
4
22
4
00
5
10
15
20
25
No. of respondents LIC
No. of respondents BSLI
Interpretation: 20 people of LIC and 10 of Birla have whole life plan, 18 people of LIC and 22 of birla have
Children plan.
43
4) What percentage of interest you get from it?
Particulars No. of respondents
LIC
No. of respondents
BSLI
Below 5 % 0 0
5-8 % 14 6
8-12 % 42 28
Above12 % 4 6
0 0
14
6
42
28
46
0
5
10
15
20
25
30
35
40
45
Below 5 % 5-8 % 8-12 % Above12 %
No. of respondents LIC
No. of respondents BSLI
Interpretation: 14 people of LIC and 6 of Birla are getting 5-8% R.O.I., 42 people of LIC and
28 of Birla are getting 8-12% interest.
44
5) Why do you invest in this(LIC/BSLI) company?
Particulars No. of respondents
LIC
No. of respondents
BSLI
High interest 8 12
Good image of CO. 12 4
Growth of the CO. 18 12
Annual premium is reasonable 10 4
Maturity benefits 12 8
8
12
18
10
12
12
4
12
4
8
0 5 10 15 20
High interest
Good image of CO.
Growth of the CO.
Annual premium isreasonable
Maturity benefits
45
Interpretation: 12 people of Birla are investing in this company due to its high interest, 18
people of LIC say that they are investing in LIC due to growth of the co.
6) Do you think that investment in BSLI is better than LIC ?
Particulars No. of respondents
Yes 44
No 56
Interpretation: 44 people are saying that investment in BSLI is better than LIC, but 56 are
saying no.
(If NO then go to Q.N. 8 otherwise Q.N. 7)
46
7) If yes, then why?
Particulars No. of respondents
Guaranteed F.V. at maturity 10
Growth rate 16
More ULIP plan 8
Risk covered 4
All above 6
No. of respondents
10
16
8
4
6 Guaranteed F.V. atmaturity
Growth rate
More ULIP plan
Risk covered
All above
Interpretation: 16 people are saying that because BSLI gives guaranteed F.V. at maturity time,
8 are saying it has more ULIP plans.
47
8) If no, then why?
Particulars No. of respondents
LIC have govt. stake 24
Brand loyalty of LIC 14
Low A.P. than BSLI 12
High return 6
LIC have govt. stake, 24
Brand loyalty of LIC, 14
Low A.P. than BSLI, 12
High return, 6
LIC have govt. stake
Brand loyalty of LIC
Low A.P. than BSLI
High return
48
Interpretation: 24 people are saying that investment in LIC is better it has govt. stake, 14 are
saying it has brand loyalty.
9) When company launch new product , then any information is given to you about that
product?
Particulars No. of respondents
LIC
No. of respondents
BSLI
Yes 24 16
No 36 24
No.
of
respondents
LIC
No.
of
respondents
BS
LI
Yes
No
36
2424
16
05
10152025303540
Yes
No
Interpretation: 24 people of LIC are saying yes and 36 are saying no, 16 people of BSLI are
saying yes and 24 are saying no about providing information.
49
10) In near future, do you think BSLI will have high growth rate?
Particulars No. of respondents
Agree 20
Neutral 26
Disagree 14
Can’t say 40
2026
14
40
0
5
10
15
20
25
30
35
40
Agree Neutral Disagree Can’t say
No. of respondents
No. of respondents
Interpretation: 20 people are saying that BSLI will grow in future, 26 are saying it will be
neutral, 40 can’t say, and 14 are disagree.
50
51
FINDINGS
90 people saying that investment in insurance sector is good option and 10 are saying no.
40 people have BSLI policies and 60 have of LIC.
10 people of BSLI have Whole life plan, 4 have retirement plan, 22 have children plan, 4
have health plan.
56 people are saying that investment in LIC is better than BSLI, 44 are saying investment
in BSLI is better.
Most of the people of both LIC and BSLI are getting rate of interest 8-12%
Most of the people have children plan of BSLI.
Most of the people invest due to high interest of the policy in BSLI
People have more faith in govt. Companies than the private.
14 people invest in LIC due to its brand loyalty.
26 people saying that BSLI growth will be neutral in near future.
52
53
SUGGESTIONS
1) Information regarding new product should be provided to the customers.
2) The company should find out the no. of people who are not having any of the insurance
plans through an intensive market research and motivate them to get insured.
3) At some level Company should provide information to the customers about the
charges of the policy.
4) Company should target each and every class of the society.
5) Charges should be low of the policies.
6) Annual premium should be reasonable.
7) BSLI Company should work in systematic way.
54
55
LIMITATIONS
Some of the respondents were not cooperative.
There are chances of biased information provided by the respondents.
As the sample size is small compared to the total population, therefore there
can’t be full accuracy.
The time was limited.
Area was limited.
56
57
CONCLUSION
Here in this study we see that people have more policies of LIC in comparison to BSLI. People
have more faith in govt. companies than private. So it is necessary for BSLI Co. that it should
give more attention to that points or that areas where it lacks for further future growth. Insurance
sector is very wide and co. can grow in future.
58
59
BIBLIOGRAPHY
www.birlasunlife.com
www.licindia.com
www.google.com
Newspapers
60
61
ANNEXURE
NOTE: The information that you will provide will be kept confidential and will be used
only for academic Purpose.
Our questionnaire will be to those persons who have plans of BSLI or LIC.
GENERAL
Name __________________________________________________________________
Addres_________________________________________________________________
Gender_________Age ________Contact No. __________________________________
1. Do you think that investment in insurance sector is good option
(a) Yes (b) No
2. Which company’s policy do you have?
(a) Birla Sun Life Insurance (b) LIC
3. Which type of policy you have?
(a)Whole Life Plan (b) Retirement Plan (c) Children Plan (d) Health Plan
(e) Golden jubilee plan (f) any other please specify___________________
4. What percentage of interest you get from it?
(a) Below 5% (b) 5-8% (c) 8-12% (d) Above 12%
5. Why do you invest in this company?
(a) High interest (b) good image (c) Company growth
(d) Annual premium is reasonable (e) due to maturity benefits
(f) Any other please specify ______________________________
62
6. Do you think that investment in BSLI is better than LIC?
(a) Yes (b) No
( If your answer is no then jump to question no. 8)
7. if yes then why?
(a) Because BSLI gives guaranteed fund value at maturity time
(b) Growth rate of company is high (c) BSLI has more ULIP plans than LIC
(d) Risk factor is covered properly (e) all above
(f) Any other (please specify)_____________
8. If no then why?
(a) Because LIC is having government stake. (b) Brand loyalty of LIC
(c) It has low premium plans than BSLI (d) Investment return is higher than BSLI
(e) Any other (please specify)__________________________
9. Whenever company launch new product, then any information is given to you about that
product?
(a) Yes (b) No
10. In near future BSLI is having high growth rate.
(a) Agree (b) neutral (c) disagree (d) can’t say
Any suggestions __________________________________________________
63
SUMMER TRAINING REPORT
ON
“PERFORMANCE EVALUATION OF BIRLA SUN LIFE
INSURANCE PRODUCTS IN COMPARISON WITH LIFE
INSURANCE CORPORATION (LIC)”
A report submitted to Panjab University, ChandigarhIn partial fulfillment of the requirement
For the degree of
MASTER OF COMMERCE(Session: 2013-14)
SUPERVISED BY: SUBMITTED BY:Prof. (Mrs.) Harpreet Kaur Jaskiranjeet Kaur
H.O.D. (Commerce) M.Com. (2nd Sem)
Roll No.6158
SWAMI GANGA GIRI JANTA GIRLS COLLEGE
64
RAIKOT (LUDHIANA)
PREFACE
To achieve partial and concrete results, it is necessary that theoretical
knowledge must be supplemented with practical environment.
Keeping this view in mind, I have completed my research work regarding
“Performance evaluation of Birla Sun Life Insurance products in
comparison with Life Insurance Corporation (LIC)” By doing this
research work I have learnt a lot of things which would be really helpful for
me in future. This experience in decision making and practical application of
knowledge has contributed greatly to my growth.
JASKIRANJEET KAUR
65
DECLARATION
I Jaskiranjeet Kaur, hereby declare that the project entitled ““Performance
evaluation of Birla Sun Life Insurance products in comparison with Life
Insurance Corporation (LIC)” submitted for partial fulfillment for the award of
degree of MASTER OF COMMERCE (M.COM) is entirely original and has not
been submitted earlier by any one for any Degree or Diploma.
Date:
Place: Signature
66
ACKNOWLEDGEMENT
I deem it a great privilege to thank all those people who helped me to complete
this project work. I express my sincere thanks to the management of the
SWAMI GANGA GIRI JANTA GIRLS COLLEGE RAIKOT and our
respected Head of the Department Prof. Harpreet Kaur for giving me this
opportunity to undertake the project work.
I express my profound thanks to Mr. Munish Sharma, Birla Sun Life for
giving me valuable advice and guidance and sparing valuable time in
clarifying various points raised by me.
JASKIRANJEET KAUR
67
INDEX
Serial No. Particulars Page No.
1 Introduction to Insurance 1-6
2. Company profile 7-11
3. SWOT Analysis 12-13
4. Major competitor LIC 14-17
5. Various life insurance plans 18-35
6. Objectives 36
7. Research Methodology 37-38
8. Data Analysis 39-49
9. Findings 50-51
10. Suggestions 52-53
11. Limitations 54-55
12. Conclusion 56-57
13. Bibliography 58-59
Annexure 60-62
68