A

SUMMER TRAINING PROJECT REPORT

ON

“Emerging Investment Dynamics in Life Insurance Industry”

UNDER

Submitted To

Rajasthan Technical University, Kota

For Full Time Degree Course

Of

Master of Business Administration

2009-11

Prepared By

RAKESH KATARIA

M.J.R. Collage Of Engg. & Technology, Jaipur.P.

ACKNOWLEDGMENT

Achieving a milestone for any person is extremely difficult without any

kind of support. Therefore, the persons who make my task easier, it
becomes my humble and foremost duty to acknowledge all of them.

I am heartiest thankful to MR. Satya Prakash Singh (Channel &

Development Manager), and my friends for giving me valuable
information, support and guidance during my project work. Without them
it would have not possible for me to work on this project.

I would like to express my gratitude to various Customers of HDFC BANK

to whom I met during the project and also to HDFC BANK JAIPUR and
other members for giving help and support.

I am also thanking to all of persons who helped me directly or indirectly

for completing this report successfully.

Rakesh kataria
PREFACE

The project work done on “Emerging Investment Dynamics In Life Insurance Industry”,

at HDFC Standard Life, Jaipur, focuses primarily on assessing the future of the Insurance

sector in India as seen through the eyes of HDFC. Evaluating the performance of this sector

has been very difficult because of the immense competition in this sector.

Future of a particular service depends on the performance of that service sector and

evaluation of performance of Insurance sector is very difficult task because performance is a

multidimensional contract. It is important to recognize what good performance means. From

strictly financial perspective, the management can achieve high yield performance primarily

through providing quality service to customers.

This project report is divided into two parts:

In the first part, a detailed introduction about the company profile and

product and services are given.

In the second part, research methodology, observation, and suggestion that had been given to

the company based on the research study has been given.

CONTENTS

 Acknowledgement

 Company Certificate

 H.O.D. Certificate

 Preface

PART : 1

Introduction

Indian Insurance Industry

 IRDA Act, 1999

History of HDFC Standard Life Insurance

The partners

Company Profile

 The partnership

 Incorporation of HDFC SLIC

 Our mission

 Our values

 product information

 Our vision

 Accolades and Recognition

PART : 2

 Objective of Study

 Importance of Study

 Scope of Study

 Research Methodology

 Findings & Analysis

1. Research

2. Swot Analysis

3. Conclusion

 Private Market Share – Retail : March – June, 2008

 Recommendation

 Bibliography

 Questionnaire

 Glossary

PART – 1
INDIAN INSURANCE INDUSTRY

The Indian Insurance sector has been going through a transition. With the private sector

companies making a foray into the market, the scenario has started to change. Liberalization

of the sector has helped in bringing about several positive developments, including the

expansion of the market size, introduction of new product, and development of new channel

distribution in the market. However, the most important development is that the insurance

companies have become more responsible towards customer needs.

The first visible change can be found in the introduction of new products. The most popular

among the products are the Unit Linked Policies. Riders have already been introduced and

have become very popular. Some of the new policies introduced are:

 Policies with reduced of premium for non-smokers

 Policies launched for the future benefit of children along with the

Coverage of the life of their parents.

 Policies for village artisans

 Travel insurance scheme for students going abroad for higher studies

 Weather insurance policies

 Retirement policies, and

 A group personal accident policy issued in the name of the school

for covering all the students of that school.

INSURANCE REGULATORY & DEVELOPMENT AUTHORITY

ACT, 1999 (IRDA)

Role of IRDA:

IRDA is a revolutionary piece of legislation. The IRDA was established to regulate, promote,

and ensure orderly growth of the life and general insurance industry.

The authority consists of the following members:

 A chairperson

 Not more than 5 whole time members

 Not more than 4 part time members

The members would be appointed by the Central Government. The tenure of the Chairperson

and members would be 5 years.

Inaction of IRDA:

 To exercise all power and function of

controller of insurance

 Protection of the interests of the policy holders

 To issue, renew, modify, withdraw, or suspend certificate of registration

 To specify requisite qualifications and training for insurance intermediaries

 To promote and regulate professional organization connected with insurance

 To conduct inspection/investigation, etc.

 To prescribe method of Insurance Accounting

 To regulate investment of funds and margins of solvency

 To adjudicate upon disputes

 To conduct inspection and audit of insurers, intermediaries, and other organizations

connected with insurance.

HISTORY OF HDFC SLIC

THE PARTNERS

Housing Development Finance Corporation Limited (HDFC)

Founded in 1977, HDFC today is the market leader in human finance in India and has

extended financial assistance for more than 19 lakh homes. HDFC has over 120 offices in

India, presently. It has one international office in Dubai and Service Associates in Bahrain,

Kuwait, Qatar, Saudi Arabia, and Sultanate of Oman. HDFC’s asset base amounts to over Rs.

21,450 crore. Its financial strength is reflected in highest safety ratings of ‘FAAA’ and

‘MAAA’, awarded by CRISIL and ICRA – two of India’s leading credit rating agencies,

respectively, for the last 7 years, respectively. It has a depositor base of over 13 lakh

depositors and deposit agents force of over 50,000. Of the total deposits, 82% are sourced

from individual and trust depositors, which demonstrate the tremendous confidence that

retail investors have in the company.

HDFC-promoted companies have emerged to meet the investors’ and customers’ need:

 HDFC Bank for commercial banking

 HDFC Mutual Funds for mutual fund products

 HDFC Life Insurance Company for life insurance and pension products, and

 HDFC Chubb for general insurance products

Being an institution that is strongly committed to the highest standards of quality and

excellence, HDFC has won several accolades in the past few years. One such award is the

“Ramakrishna Bajaj National Quality Award” for the year 1999. This award was instituted to

award recognition to Indian companies for business excellence and quality achievement.

HDFC is the only company, so far, to receive this award in the service category.
Standard Life Assurance Company (SLAC)

Founded in 1825, Standard Life has been at the forefront of the UK insurance industry for

177 years by combining sound financial judgement with integrity and reliability. The largest

mutual life company in Europe, it has operations in United Kingdom, Ireland, Spain,

Germany, Austria, and Canada with representative offices in Hong Kong and China.

One of its most recent successes was launch of Standard Life Bank on 1st January, 1998. The

introduction of its innovation mortgage product in January 1999 had an immediate impact on

the UK market, according for 11% of all new lending within the first operational year. The

current deposit base of the bank is US $7.1 billion. Standard Life has total assets of over US

$100 billion and new premium last year of US $9.2 billion. Its US investment portfolio

accounts for approximately 2% of all shares listed in London Stock Exchange. It is one of the

few insurance companies in the world to receive AA rating from two the leading

international credit rating agencies – Moody’s and S & P.

Not surprisingly, Standard Life is rated as one of the strongest companies in the world. In

financial terms, the quality and values Standard Life

brings to this venture are immense. The company’s reputation in the UK market remains

unrivalled. Besides being voted ‘Company of the Year’ for overall service, for the third

consecutive year, Standard Life has been recently voted ‘Company of the Decade’ by

independent brokers.

COMPANY PROFILE
HDFC STANDARD LIFE

About us

Board members

Our parentage

Our group companies

The partnership

Incorporation of HDFC Standard Life Insurance Company

Our mission

Our values

Our vision

Accolades and Recognition

About us

HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance

companies, which offers a range of individual and group insurance solutions. It is a joint

venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s

leading housing finance institution and The Standard Life Assurance Company, a leading

provider of financial services from the United Kingdom. Both the promoters are well known

for their ethical dealings and financial strength and are thus committed to being a long-term

player in the life insurance industry – all important factors to consider when choosing your

insurer.

Board members
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 and is also the Chief Executive of Standard Life Investments Limited. 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

Assurance Company 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. G N Bajpai was the former chairman of Life Insurance Corporation of India and Securities

and Exchange Board of India. Mr. Bajpai retired from Life Insurance Corporation of India with

more than 3 decades of experience and further served SEBI as its chairman for 3

years, during which time he had strengthened the compliance enforcement in SEBI.

 Mr. Gautam R Divan is a practicing 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 & Vice-President 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.

Our parentage

HDFC Limited

 HDFC is India’s 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 Assurance Company

 Standard Life has been looking after the financial needs of customers for morethan

180 years.It currently has a customer base of over 7 million people who rely on the

company    for their insurance, pension, investment, banking and health-care needs.

 It currently manages over £ 90 billion in assets.

 Leader in the employee benefit market in both the UK and Canada.

 Rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of

A1 by Moody’s.

 Winner of numerous prestigious industry awards in the UK, including:

  - “Company of the Year” for the seventh successive year (Money Marketing Awards)

  - “Best Pension Provider” (2004 and 2005 Money Marketing Awards)

  - “Best Pension Product” (2003 -2005 Money facts Investment, Life & Pension Awards)
Our group companies
The partnership

HDFC and Standard Life first came together for a possible joint venture when they entered

the Life Insurance market in January in 1995. It was clear that both the companies shared

similar values and belief and a strong relation formed quickly. In October 1995, both the

companies signed a 3 year joint venture agreement.

Around this time, Standard Life purchased a 5% stake in HDFC, further strengthening the

relationship.

The next three years were filled with uncertainty, due to changes in Government and

Ongoing delays in getting the IRDA (Insurance Regulatory and Development Authority) Act

passed in the parliament. Despite these, both the companies remained firmly committed to

the venture.

In October 1998, the joint venture agreement was renewed and additional resource made

available. Around this time Standard Life purchased 2% stake in Infrastructure Development

Finance Co. Ltd. (IDFC). Standard Life started to use the services of the HDFC Treasury

Department to advice upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising. Both the

companies agreed that the time was right to move the operation to the level of action.
Therefore, in January 2000, an expert team from the UK joined a selected team from HDFC

to form the core project team, based in Mumbai.

Incorporation of HDFC Standard Life Insurance Company

The company was incorporated on 14th August, 2000 under the name of Standard Life

Insurance Company Limited.

HDFC’s ambition from as far back as October 1995, was to be the first private company to

re-enter the Life Insurance market in India. On 23rd September, 2000, this ambition was

realized when HDFC Standard Life was the only company to be Granted a certificate of

registration.

HDFC group is the main shareholder in HDFC Standard Life, with 81.4% ownership while

Standard Life 18.6%. Given Standard Life’s existing investment in HDFC group, this is the

maximum investment allowed under current regulations. HDFC and Standard Life have a

long and close relationship built upon single value and trust. The ambition of HDFC

Standard Life is to mirror and showcase the parent companies and to be the yardstick by

which all other insurance companies in India can be measured.

Our mission

“We aim to be the top new life insurance company in the market”

This doe’s not just mean being the largest or the most productive/competitive in the market;

rather it is a combination of several things like:

 Customer service of the highest order

 Value for money for customer

 Professionalism in carrying out business

 Innovative products to cater to different needs of different customer

 Use of technology to improve service standards

 Increase in market share

Our Values

SECURITY:

Providing long-term financial security to our policy holders is our constant endeavor.

We shall do this by offering life insurance and pension products.

TRUST:

We appreciate the trust placed by our policy holders in using our products. We will aim to

manage their investments very carefully and live under trust.

INNOVATION:

Recognizing the different needs of our customers by offering them a wide range of

innovative products to meet their needs.

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”.

Our Values

Values that we observe while we work:

 Integrity

 Innovation

 Customer centric

 People Care “One for all and all for one”

 Team work

 Joy and Simplicity

`PRODUCT INFORMATION

Terms of life are hard, but the terms of insurance are easy!!

Insurance: The concept

Insurance is the compensation of financial losses on happening of an uncertain event. When

insurance is purchased, the risk of financial loss due to happening of that uncertain event is

transferred from the policy holder to the insurance company. When the claim arises,

company pays a lump sum amount to the policy holder or to her nominee that will be utilized

to generate income for them. It is important to note that we do not protect the life of the

policy holder but her income earning capacity. We offer plans that cover the risk of income

earning capacity on happening of specified uncertain events.

Uncertain events

Uncertainty is part of our everyday life. However, all the uncertain events cannot be

insured. As is obvious from the preceding discussion, we focus only on those uncertain

events when income earning capacity is stopped, which happens due to the following four

major events:

 Death

 Sickness
 Accident

 Retirement

Insurance products

Today there are many insurance products available in the market. Each company has its set

of products that it offers to the customers. This makes it difficult to keep track of all the

products at the same time. A better way to understand them is by way of classification. All

insurance products can be classified according to four basic categories:

I PROTECTIO INVESTMENT

P N

S
PENSION SAVINGS

This classification is

based on the needs of the customers. Accordingly, each of these categories are classified by

needs and all the products coming under that category aim to fulfill that need, e.g. products

coming under investment category aim to promote long-term real growth over the period.

Thus, understanding these categories will not only help us to understand various products but

also help us to position our products strongly in a competitive market.

HDFC Standard life insurance products

1. Protection plan

 Term assurance plan

 Loan cover term assurance plan

2. Investment plan

 Single premium whole of life plan

3. Pension plan

 Personal pension plan

 Unit linked pension

 Unit linked pension plus

4. Saving plan

 Endowment assurance plan

 Unit linked endowment

 Unit linked endowment plus

 Mony back plan

 Children’s plan
Investment type of products

In investment type of products, the focus is on maximizing returns for the customer over a

period of time. In a way, it is opposite to protection type where the focus on maximizing the

risk cover is very low. The objective is to put maximum amount in investment. The

underlying principle is to commit money for a certain period of time and get the benefits of

real long-term growth. The products are usually single-premium policies where the entire

premium is collected in advance. Surrenders are discouraged and there is a commitment for a

certain minimum of years. In the event of death, the term value of the investment is returned.

Pension products

It is another very popular type of product. Along with the risk of an untimely death or

disability, we also have the risk of living too long to outlive our source of income. In other

words, one needs to ensure that she gets a decent income as long as she lives. This is where

we have pension products addressing the need for a comfortable retirement. One can opt for

an immediate pension or for a pension at a future date (also called as deferred pension) – one

can have a range of options when selecting a pension plan. There is a great amount of

flexibility when it comes to selecting a pension product. The important point to note is that

pension is a part of one’s present income that forms the basis for future consumption. Every

year income is accumulated and invested in a pension fund. The lump sum accumulated then

is used for purchasing on the vesting date.

Saving type of products

People like to save. Our saving rate is well above 20% of our GDP for last few years. They

save for events like child’s marriage, education, etc. Savings products aim to strike a good

balance between risk cover as well as returns. It acts as a protection on savings. Sum assured

is usually targeted savings that one looks for. She gets that amount at the end of the term

along with the bonuses if it is a participating policy. On the protection side, if any

unfortunate event happens during the term, the Sum assured (targeted savings) is still paid so

it encourages a person to save for an event and at the same time it ensures that her savings

are protected. This is the unique advantage of savings through life insurance that no other

financial product offers. We find very popular products like endowment assurances, money

back plans in this category.

Protection type of products

A typical protection type of product aims at protecting income earning capacity of the

customers on happening of uncertain events during the term of the product. These are the

pure risk product having no saving element. Naturally, these products do not have any

maturity benefits. High risk cover at low cost is the unique of this type of product that makes

this category most attractive for those who want high insurance cover without spending much

for it. Usually offered for a definite term, all these products come under 4 broad categories.

To understand a product, it is essential to find out the category based on its features. Needless
to say, it will not be possible to compare one product category to another. Each category is

unique and caters to particular needs of the customers.

16 Dec 2003

'Unit-linked Plans are the Future'

You have been operating here for a year now and your company’s portfolio is tilted

towards unit-linked products. How successful have these products been?

Unit-linked plans are modern products that are consumer friendly and as anywhere in the

world, these are gaining popularity and finding wide acceptance in India as well.

Unlike traditional insurance products, customers find unit-linked plans more transparent,

flexible and easy to understand. A customer who buys a unit-linked policy can far more

easily understand the charges he pays towards the savings component, the life cover, and the

riders. And he has the option to choose from different fund options for the investment

component depending on his appetite for risk.

Are Indian consumers educated enough to understand the nuances of such a product?

While the concept of such a product is new, its features are easy to understand. So, when the

concept is explained just once, customers see the benefits. Also, it helps that mutual funds

have been in the country for a while now and so customers are already aware of units. Once a

customer understands the benefits of unit-linked insurance plans, he is also able to compare

these with traditional insurance products and see that the old plans are not very transparent.

While there is no specific type of person buying unit-linked products, the consumer at any

level is most comfortable if he can follow what is happening with his investments or

contributions. In case of life insurance products, this is a long-term process of some 20-25
years. With such a time scale, it is clear that the transparency and flexibility that unit-linked

products offer will be absorbed well by the customers.

What do unit-linked products actually offer in terms of value-addition?

When you are looking at a long-term plan, there are always factors that will change from

time to time to meet any challenges. Also, plans change so that the company can offer some

amount of customisation. Among other things, we offer to add the cover to the policy, add

riders when necessary, and change the investment structure. We also let customers choose

from different fund options on the investment without compromising on the basic product.

While all these options do come with caps to follow the regulatory framework, they

definitely offer value-addition to the customer. And, with the NAV (net asset value) of the

fund calculated at the end of the day, the customer knows the value of his funds. I must add

that that in case of death, the beneficiary gets the sum assured or the NAV of the fund,

whichever is higher. So, there is no reduction in protection in these plans.

Although insurance is specific to the individual, most companies offer uniform products

for everybody. Do unit-linked plans offer any degree of customization?

We are so used to traditional insurance products that unit-linked plans seem extremely

modern in comparison. They are products for the future. Think of these plans as bank

accounts. Every year, you make your contribution, and pay the charges for your life cover,

riders and the like. The rest goes into an investment fund–and you can control the fund by
choosing your level of risk. The fund value grows and at the end of the year, on the basis of

the NAV, you know where you stand. With such wide choice and control, unit-linked plans

are the most customizable insurance products available to the customer today.

Is the investment risk left to the customer who buys unit-linked plans?

For any investor, the idea is to maximize returns. Wise customers know that the era of

guaranteed returns is over. The fall in interest rates in the past 18 months is indication

enough of what lies ahead. What unit-linked products offer is a long-term investment option

where returns are far more real and there is no compromise in the protection that the policy

offers.

In the guaranteed returns regime, the guaranteed component was met by paying lower

interest rates to those who did not have any guarantee on their plans. Compared to this, unit-

linked plans offer greater value to the customer. Yes, to an extent the risk is in the hands of

the customer. However, the flexibility to opt for funds means that the customer can benefit as

well. And finally, the returns that these products offer are bound to be relatively higher than

what similar traditional plans offer.

In order to cater to customers with very low risk appetite we also offer a unitised, with-profit

plan across our products, where the bonus rate is declared in advance for the year. This is a

conservative approach, but it has its takers. With this option, at the end of the policy the

policyholder gets a share of the bonus that the company earns. In this case, there is an

assured return that is benchmarked to the current bond rates (5 per cent last year).
What has been the performance of unit-linked plans in other emerging markets?

In a country like Poland, where the markets were opened a little over a decade ago, we are

today the largest private insurance company. The demand for our unit-linked products is

high. Worldwide, the growth of these products is high when compared to traditional

products, an indication of where the market is headed.

There are a few people who view unit-linked plans as pure investment products that offer

little cover. But this is a myth and customers realize this when the benefit of these plans is

explained to them.

With investment options regulated, one has to be prudent with the money that is contributed

for the product and has to add value for the business to be successful. I feel that both

developed and developing markets understand the great value proposition that unit-linked

insurance plans offer. Another factor that tilts the balance in favor of such products is the tax

treatment that the accumulated account attracts. It’s tax-free, unlike a mutual fund or any

other investment, where the gains are taxed.

UNIT LINKED PRODUCTS

UNIT LINKED YOUNG STAR PLAN

The HDFC Unit Linked Young Star gives you:

 An outstanding investment opportunity by providing a choice of thoroughly researched

and selected investments

 Valuable protection to your child in case you are not around

 Flexible benefit combinations and payment options

 Flexible additional benefit options such as critical illness cover

 Access to your accumulated fund before maturity

4 EASY STEPS TO YOUR OWN PLAN

Step Choose the premium you wish to invest.

1
Step Choose the amount of protection (Sum Assured) you desire.

2
Step Choose the additional plan benefits you desire.

3
Step Choose the investment fund or funds you desire.

4
 Step 1 : Choose your regular premium

Minimum regular premium is Rs 10,000/- per year, can be paid:

 Monthly (using Standing Instructions or ECS mandate)

 Quarterly

 Half-yearly

 Annually

You may also choose to pay adhoc Single Premium Top-Up or additional regular premiums

depending on your convenience.

Step 2 : Choose your level of protection

You can choose any amount of Sum Assured with:

 A minimum of 5 times your chosen annual regular premium

 A maximum of 40 times your chosen annual regular premium

Step 3 : Choose additional plan benefits

We offer a range of valuable protection options of secure your family. You can choose any

one of the following benefits:

Life Option → Death Benefit

Life & Health Option → Death Benefit +

Critical Illness Benefit

BENEFIT SUMMARY
TYPES
 We will pay the Sum Assured to your beneficiary
 Your family need not pay nay further premiums. We will
pay future regular premiums on your behalf, at the
Death original level chosen by you
Benefit  Any Critical Illness Cover terminates immediately
 We will pay the Sum Assured to your beneficiary
 Your family need not pay any further premiums. We will
Critical pay future regular premiums on your behalf, at the
Illness original level chosen by you.
Benefit  The Death Benefit Cover terminates immediately
Step 4 : Choose your investment funds

In this plan the investment risk in your chosen investment portfolio is borne by you, which

means that the premiums you pay in this plan are subject to investment risks associated with

the capital markets.

We have 6 funds that balance your level of risk and return. You can choose from all or any of

the following 6 funds:

 Asset Class

Fun Details Ba Go E Risk

d nk vt. q &
De Se u Retu
po cu i rn
sit riti t Rati
s es y ng
& &
M Bo
on nd
ey s
M
ar
ket

Fund
Composition
Liqui  Extremely
d low capital
Fund risk 1 L
00 - - ow
 Very stable
returns %
Secu  More capital
re stability
Man than equity
aged funds 1 Low
- 00 -
Fund  Higher Mod
potential % erat
return than e
Liquid Fund
Defe  Access to
nsive better long-
Man term returns
aged through
Fund equities
 Significant - 70 1 Mod
bong % 5 erat
exposure to % e
keeps risks 85 t
down % o
3
0
%
Bala  Increased
nced equity
Man exposure
aged gives better
Fund long-term
return 40 3 Hi
 Bond - % 0 gh
exposure to %
provides 70 t
some % o
stability 6
0
%
Equit  Further
y increased
Man exposure to
aged equities to
Flexible Options for your Children’s needs

Flexible Benefits
Options
Premium You can pay your regular premium up to 15 days
Payments after the due date to fit in with your cash flows
Single Premium Once we have issued your policy, you can invest
Top-Up more than your regular premium, subject to the
following conditions:
 You have paid all your regular premiums to date
 Your total Single Premium Top-Ups at any time is
not more than 25% of your total regular premium
paid to date
 Each Single Premium Top-Up amount is at least
Rs. 5,000

Premium You can increase, reduce, or stop your regular

Changes premium at any time as long as your policy
maintains the minimum level of life cover. The
minimum increase in regular premium amount is
only
Rs. 5,000/- per year and any changes to premiums
will take place from the next premium due date.
Changing your You can change your investment fund choices in
Investment two ways:
Decisions Switching: You can move your accumulated funds
from one fund to another anytime.
Premium Redirection: You can pay your future
premiums into a different selection of funds, as per
your need.
 ELIGIBILITY

The age and term limits for taking out a HDFC Unit Linked Young Star, are as

shown below:

Benefit Term Period Age at Entry Max Age

Options (Yrs.) (Yrs.) at
Maturity
(Yrs.)
Min Max Min Max

Life 2 6 75
Option 10 5 18 5
Life & 2 5 65
Health 10 5 18 5
Option
CHARGES

 Premium Allocation Rate

 Fund Management Charge (FMC)

 Surrender Charge

 Other charges

TAX BENEFITS (Based on current tax laws)

Under Section 80C, you can save up to Rs. 33,660 from your tax each year (calculated on the

highest tax bracket) as premiums up to Rs. 1,00,000 are allowed as a deduction from your

taxable income.

Under Section 10 (10D), the benefits you receive from this policy are completely tax-free,

subject to the exclusions.

UNIT LINKED PENSION PLAN

The HDFC Unit Linked Pension gives you:

 An outstanding investment opportunity by providing a choice of thoroughly researched

and selected investments

 Provides a post retirement income for life

 Gives you the flexibility to plan your retirement date

 Gives you the freedom to invest premiums as per your preference

3 EASY STEPS TO YOUR OWN PLAN

Step Choose your retirement age

1
Step Choose the premium you wish to invest, based on your
2 retirement needs
Step Choose the investment fund(s) you desire
3

Step 1 : Choose your retirement age

 You can select any age you wish to retire at (Vesting age), between 50 years and 75 years.

Step 2 : Choose your premium

You can choose either a Single Premium Policy or a Regular Premium Policy

Minimum regular premium is Rs 10,000/- per year, can be paid:

 Monthly (using Standing Instructions or ECS mandate)

 Quarterly

 Half-yearly

 Annually

The minimum premium for a Single Premium Policy is Rs. 25,000.

Step 3 : Choose your investment funds

In this plan the investment risk in your chosen investment portfolio is borne by you, which

means that the premiums you pay in this plan are subject to investment risks associated with

the capital markets.

We have 6 funds that balance your level of risk and return.

 Asset Class
Ban Govt E
Fun Details k . q Risk
d Dep Secu u &
osits rities it Retu
& & y rn
Mon Bon Rati
ey ds ng
Mar
ket

Fund Composition
Liqu  Extremely
id low capital
Fund risk 10 - L
0% - ow
 Very
stable
returns
Secu  More
re capital
Man stability
aged than
Fund equity - 10 Low
funds 0% - Mod
 Higher erate
potential
return than
Liquid
Fund
Defe  Access to
nsive better
Man long-term
aged returns - 70% 1 Mod
Fund through to 5 erate
equities 85% %
 Significant t
bong o
exposure 3
keeps risks 0
down %
Bala  Increased
nced equity
Man exposure
aged gives
Fund better 40% 3 High
-
long-term to 0
return 70% %
 Bond t
exposure o
provides 6
some 0
stability %
Equi  Further
ty increased
Man exposure
aged to equities
Fund to give a
better
long-term
return 0% 6 Very
-
Flexible Options for you and your family’s needs

Flexible Benefits
Options

Premium You can pay your regular premium up to 15 days after

Payments the due date to fit in with your cash flows
Single Once we have issued your policy, you can invest more
Premium Top- than your regular premium, subject to the following
Up conditions:
 You have paid all your regular premiums to date
 Each Single Premium Top-Up amount is at least Rs.
5,000

Premium You can increase, reduce, or stop your regular

Changes premium at any time. The minimum increase in
regular premium amount is only Rs. 5,000/- per year
and any changes to premiums will take place from the
next premium due date.

Changing your You can change your investment fund choices in two
Investment ways:
Decisions Switching: You can move your accumulated funds
from one fund to another anytime.
Premium Redirection: You can pay your future
premiums into a different selection of funds, as per
your need.
 ELIGIBILITY

The age and term limits for taking out a HDFC Unit Linked Pension, are as shown below:

Ben Term Period Age at Entry (Yrs.) Age at

efit (Yrs.) Vesting(Yrs.)
Opt Min Max Min Max Max Min
ions

Regular 10 40 18 65 50 75
Premium
Single 5 40 18 70 50 75
Premium

CHARGES

 Premium Allocation Rate

 Fund Management Charge (FMC)

 Surrender Charge

 Other charges

TAX BENEFITS (Based on current tax laws)

 Under Section 80CCC, you can save up toRs. 33,660 from your tax each year (calculated on

the highest tax bracket) as premiums up to Rs. 1,00,000 are allowed as a deduction from your

taxable income.
 CHILDREN’S PLAN

HDFC Children’s Plan

The HDFC Children’s Plan gives you:

 Invaluable financial support to your child

 Helps you customize an ideal plan for your child

 Provides you multiple options for multiple benefits

3 Easy Steps To Your Own Plan

Step Choose the amount of targeted savings and policy term using
1 our Financial Planning Tool
Step Choose any one of the 3 plan options as per your child’s
2 requirement
Step Work out the premium payable and Sum Assured with our
3 Financial Consultant

Step 1 : Choose the amount of targeted savings

This plan gives you the flexibility to structure the ideal plan for your child.

 Estimate the money, which you might require for your child at any one of the milestones in

his or her future

 Choose the amount of targeted savings and policy term using the Financial Planning Tool

available with our Financial Consultant

Step 2 : Choice of 3 Plan options

You can choose any one of the 3 plan options at the start of the policy:

 Accelerated Benefit Plan → Death Benefit OR Maturity Benefit

 Maturity Benefit Plan → Death Benefit AND Maturity Benefit

 Double Benefit Plan → Death Benefit AND Maturity Benefit

Plan Option Death Benefit Maturity Benefit

(On death of insured
parent during the
policy term)

Accelerated  We will pay the Sum  We will pay the Sum

Benefit Plan Assured + Bonuses Assured+Bonuses
Declared Declared
 The policy terminates
immediately

Maturity  Your family need not  We will pay the Sum

Benefit Plan pay any further Assured+Bonuses
premiums and policy Declared
continues

Double  We will pay the Sum  We will pay the Sum

Benefit Plan Assured Assured+Bonuses
 Your family need not Declared
pay any further
premiums and the
policy continues
Step 3 : Premium you need to pay

The table below shown the Indicative Premiums for a male life assured paying annual

premiums for a Rs 5 lakh sum Assured policy with the policy maturing when the child is 21

years old (i.e. 20 year term period and current age of child is assumed to be 1 year).

Age of Accelerated Benefit Maturity Benefit Double Benefit

Parent Plan (Rs.) Plan Plan (Rs.)
(Yrs.) (Rs.)

30 23,575 22,690 24,085

35 24,045 22,820 24,790

40 24,890 23,055 26,005

ELIGIBILITY

The age and term limits for the insured parent for taking out the HDFC Children’s Plan are as

shown below:

Term Period (Yrs.) Age At Entry (Yrs.) Max Age

At
Maturity
(Yrs.)
Min Max Min Max
10 25 18 60 75

TAX BENEFITS (Based on current tax laws)

 Under Section 80C, you can save up to Rs. 33,660 from your tax each year (calculated on the

highest tax bracket) as premiums up to Rs. 1,00,000 are allowed as a deduction from your

taxable income.

 Under Section 10 (10D), the benefits you receive from this policy are completely tax-free,

subject to the exclusions.

Customer Service

Premium Payment

This section gives you all the details that you may require to pay your premium and make it a

hassle free experience. Along with various premium payment options currently available to

you, we have also drawn up a checklist of details that you will need in case you are paying

through cheque or demand draft.

6 Easy Ways to pay your premium:

At any HDFC SLIC branches

You can deposit Cheque / Demand Draft drawn in favour of “HDFC SLIC” at any of the

braches during the following business hours:

Monday to Friday : 9.30 AM to 4.30 PM (For Cash)

Monday to Friday : 9.30 AM to 5.00 PM (For Cheque)

Saturday               : 9.30 AM to 12.00 Noon (For Cash & Cheques)

Closed on Sundays

Postage / Courier

You can send cheques and demand drafts drawn in favour of HDFC SLIC to any of our

branch offices

Online Payment

You can make online payment of premium anytime and from any location, at a click of the

mouse by using the Online payment facility. It is currently offered to all the policyholders

who are registered users of billjunction.com or have net banking facility with any of the

following banks - HDFC Bank, ICICI Bank, UTI Bank, State Bank of India, Punjab National

Bank, Union Bank of India.

Drop boxes

You can drop cheques and demand drafts drawn in favour of HDFC SLIC into any of our

drop boxes installed at various locations in various cities.

Electronic Clearing Service (ECS) or Auto Debit facility of RBI

You can also pay renewal premiums through Electronic Clearing Service (ECS) of Reserve

Bank of India (RBI) presently available in following 42 cities:

New Delhi, Chandigarh, Kanpur, Lucknow, Jaipur, Mumbai, Panjim, Pune, Nagpur,

Ahmedabad, Baroda, Surat, Indore, Bhopal, Hyderabad, Vijaywada, Vizag, Bangalore,

Chennai, Coimbatore, Trivandrum, Kolkatta, Bhubaneswar, Guwahati, Ludhiana, Patna,

Manglore, Amritsar, Jalandhar, Allahabad, Varanasi, Agra, Rajkot, Kochi, Trichur, Jabalpur,

Gwalior, Calicut, Jodhpur, Mysore, Raipur, Udaipur

Standing Instructions (SI) Mandate

You can also pay your renewal premium through a Standing Instructions Mandate if you

have an account with HDFC Bank anywhere in India

 Checklist while paying your renewal premium through

cheque/ demand draft

 Please mention your policy number and name correctly on the reverse side of the cheque/

demand draft

 We do not accept Post Dated Cheques (PDC’s) beyond the next banking day from date of

receipt

 In case of any overwriting on your cheque, please countersign the same

 As per RBI guidelines, Non MICR Cheques may not be acceptable at few locations. In this

scenario, please contact your nearest branch for more details

 For Unit Linked Polices you can pay using Local Cheques/ Demand Drafts

 For other policies you can pay using either Local or Outstation cheques or Demand Drafts

PART : 2
 OBJECTIVE OF STUDY

In the short span of time, since the insurance sector has opened up, HDFC Standard Life

Insurance has, literally, dictated the market’s evolution. Catering to all age and income

segments, the company started out with the traditional insurance policies that were easy to

understand. The idea was entice the customers used to LIC’s style of functioning.

Soon, HDFC SLIC (HDFC Standard Life Insurance Company) began exploring new areas. It

introduced new products like the market-linked products where returns are linked to the

market performance of the underlying assets.

HDFC SLIC leads in virtually all parameters:

 Size of agent force

 Number of policies sold

 Total sum assured

 Premium income, and

 Productivity of agents

IMPORTANCE OF THE STUDY

HDFC SLIC has grown exponentially over the past three years, making its mark in a number

of segments such as: retirement solutions, child plans, and market-linked plans. The success

of the business, thus far, has reaffirmed the commitment of both the partners – HDFC Bank

and Standard Life – towards achieving the company’s vision of being a leader in life

insurance business in India.

HDFC SLIC is the leading private sector life insurance company in India. In December 2003,

it crossed the Rs. 1000 crore total premium mark, the first private life insurer to do so.

So, the research work is important in respect of understanding the changing insurance sector

with special reference to HDFC SLIC. The study is about:

 Products of leading private insurer

 Their mode of recruiting financial advisors (FCs), and

 Their approach – which made them customer-centric

SCOPE OF STUDY
HDFC SLIC has increased its market share among private life insurers to nearly 40% from

33% as of end-December. The company’s first-year premium income in the April-March

period stood at Rs. 464.6 crore, accounting for 39.3% of the Rs. 1,364 crore premium booked

by all private life insurers together.

Considering the entire life insurance market, including the Rs. 9,780 crore booked by LIC,

HDFC SLIC’s market share works out to be around 4.17%. The life insurance market

continues to be dominated by LIC which has about 87.8% of the shares. This is only a

marginal dip from its 88.2% share in end-December. These comparisons are only for the first

year or new business premium.

The gap between HDFC SLIC and the second-in-line private insurer is vast. In fact, this

status has led some analysts to wonder if the company is not a trifle too aggressive. But other

say this has more to do with the company’s customer-centric focus, its pan-India presence,

and superior risk-management and investment strategies. HDFC SLIC is not, however,

resting on its laurels.

Company’s customer-centric approach is studied during the training period and the findings

of the research work will definitely focus on the present condition and future requirement (if

any) relating to products of the company.

RESEARCH METHODOLOGY

UNIVERSE OF STUDY

THE SAMPLE
DESCRIPTIVE RESEARCH

DATA COLLECTION

SAMPLE DESIGN USED

TOOLS AND TECHNIQUES

1. UNIVERSE OF STUDY

Jaipur

2. THE SAMPLE

The study is based on the data collected from some selected locations in jaipur. I have taken a

sample of 300 customers. The aim is to know the views of the people. Due to shortage of

time, the sample taken is small represent the views of all the people. Thus, for the present

study, the sample can be said to be representative of all the people of jaipur.

DESCRIPTIVE RESEARCH

Descriptive research studies are those studies which are concerned with describing the

characteristics of a particular individual, or of a group. In descriptive research studies, the

researcher must be able to define clearly what he wants to measure and must find adequate

method for measuring it along with a clear-cut definition of the ‘population’ he wants to

study. Since the aim is to obtain complete and accurate information, the procedure to be used

must be carefully planned. So, I have planned my research work, accordingly.

DATA COLLECTION

I have used the following data collection methods during my research study:

 PRIMARY DATA, and

  SECONDARY DATA

PRIMARY DATA: Primary data is that data which is taken directly from the survey

method

SECONDARY DATA: Secondary data is that data which is taken from manuals, books,

journals, and business magazines, and HDFC standard life insurance, etc. It is also called

second-hand data.

SAMPLE DESIGN USED

Although there are many methods of sampling which can be applied in research studies, but

during the survey, I have applied two methods, which are as follows:

a) CLUSTER SAMPLING METHOD:

It is difficult and even impossible to identify uniquely each member of the population. Yet it

may be possible to identify certain sub-groups with relative cases.

The cluster is a geographical or social unit; though it may be defined by other properties.

Typical clusters are city blocks, households, family organizations, farms, etc.

Thus, for example, in a survey of city population, no up-to-date lists of the residents are

available but a map showing blocks and then sample of each block may be drawn. Count

may be taken of those who live in these blocks. Using cluster sampling for my research

work, I have divided the whole city of New Delhi, from where I have started my survey,

which is Connaught Place, into clusters like first,second, third, and fourth.
b) RANDOM SAMPLING METHOD:

A sampling procedure for which possible combination of two or more elements have equal

chance of being selected is called Simple Random Sampling.

In general, a simple random sampling procedure of ‘n’ elements from the population has

equal chance of being selected.

Simple random sampling has an important property related to variability of estimates

obtained from such samples which decrease as sample size increase.

During my survey, I adopted random sampling method where I have selected the customer

randomly and asked questions.

TOOLS AND TECHNIQUES:

As we know that collection of data is very necessary for completion of any research work, so

in my survey I have used Questionnaire method for collecting data.

SWOT ANALYSIS

STRENGTHS

The strengths are:

  HDFC SLIC is the third largest player in the insurance industry in India

 It is the largest home loan financing institution in India

 Standard Life is a 100 years old company (founded in UK)

 HDFC enjoys the highest AAA credit rating, which ensures highest safety of money

 Mutual Fund

 Personal Loan

WEAKNESSES

The weaknesses are:

 Some customers are not satisfied with the service of HDFC SLIC

 Only 24 branches all over India

 High insurance-period duration

 High premium

 Low awareness of HDFC SLIC in rural areas

OPPORTUNITY

The opportunities are:

 Huge opportunity in insurance market

 Better products as compared to other industries

 Due to increase in literacy rates, literate people prefer HDFC SLIC

 HDFC SLIC gives opportunity to other businesses to grow in the market

THREATS

The threats are:

 Tough competition from LIC, ICICI, BAJAJ ALLIANCE, and BIRLA SUN LIFE

 Due to low premium, rural markets prefer LIC

 Threat for HDFC SLIC because over 21 new companies are entering the market

 Currently, HDFC SLIC is the 3rd player in the market, and the major threat is to sustain that

position in the face of competition

RESEARCH FINDINGS AND ANALYSIS

SURVEY FOR AWARENESS OF LIFE INSURANCE

RESEARCH METHODOLOGY

The technique of finding facts from raw data is known as sampling.

SAMPLING:

Sampling is simply the process of learning about the population on the basis of the sample

drawn for it. Under this method, small group of the universe is taken as the representative of

the whole mass and the results are drawn. It is a method to make social investigation

practicable and easy.

SAMPLE:

“A static sample is a miniature picture or cross section of an entire group or an aggregate

from which the sample is taken. A sample is the reflection of the universe.”

I have taken a total of 300 samples from the jaipur population.

CLUSTER SAMPLING

Under this method, the total population is divided into some recognizable sub-division which

are termed as clusters and a simple random selection of these clusters is made and then the

survey of each and every unit in the selected cluster is done.

PRINCIPLE OF CLUSTER SAMPLING

The principles that are basic to cluster sampling are:

 Clusters should be drawn from a sample which is in tune with the cost and other

limitations of the survey

 The number of sampling unit in each cluster should be approximately same

Details about cluster sampling from the project:

Age No. of Samples

25-35 100

35-45 100

45-55 100

55 & above 100

CONTENTS OF SURVEY

Awareness in Different Age Group

Group No. of Samples

25-35 100

35-45 100

45-55 100
55 & above 100

Purpose of Insurance

Group No. of Samples

Businessmen 100

Government employees 50

Private employees 50

Degree of Awareness in Different Gender of Society

Male 100

Female 50

FINDINGS OF AGE GROUP (25-35)

11%
15% K.I.N.P.
45% T.P.
N.A.I.
U.T.
29%
 Total no. of samples : 50

Area of survey : JAIPUR

Findings

 This age group is having the second highest number of policy holders among all age groups

 Second highest awareness of insurance among people of this age group

Feedback from people

K.I.N.P. : Know about insurance but not taken any policy

T.P. : Taken policy

N.A.I. : Not aware of insurance

U.T. : Useless thing

FINDINGS OF AGE GROUP (35-45)

11% 4%
27%
K.I.N.P.
T.P.
N.A.I.
U.T.
58%
 Total no. of samples : 50

Area of survey : JAIPUR

Findings

 This age group is having highest number of policy holders among all age groups

 Highest awareness of insurance among people

Feedback from people

K.I.N.P. : Know about insurance but not taken any policy

T.P. : Taken policy

N.A.I. : Not aware of insurance

2% 23%
K.I.N.P.
U.T. : Useless thing
T.P.
11% N.A.I.
FINDINGS OF AGE GROUP (45-55)
U.T.
64%
 Total no. of samples : 50

Area of survey : New Delhi

Findings

 This age group is having the lowest number of policy holders among all age groups

 Lowest awareness of insurance among people

Feedback from people

K.I.N.P. : Know about insurance but not taken any policy

T.P. : Taken policy

N.A.I. : Not aware of insurance

U.T. : Useless thing

 FINDINGS OF AGE GROUP (55 & ABOVE)

9%
19% 33% K.I.N.P.
T.P.
N.A.I.
U.T.
39%

Total no. of samples : 50

Area of survey : JAIPUR

Findings

 This age group is having low number of policyholders among all age groups

 Low awareness of insurance among people

Feedback from people

K.I.N.P. : Know about insurance but not taken any policy

T.P. : Taken policy

N.A.I. : Not aware of insurance

U.T. : Useless thing

PURPOSE OF INSURANCE (BUSINESS CLASS)

22% 24% INVESTMENT

LIFE
PENSION
20% CHILD LIFE
17% 17% TAX SAVER
 Total no. of sample : 5

Area of survey : JAIPUR

Findings

The major finding of this part of the research study is that business class treat insurance

mainly as a tool of Investment and Tax Savings. They spend less on Pension and Life Plans.

PURPOSE OF INSURANCE(PRIVATE EMPLOYEES)

18% 21% INVESTMENT

LIFE

20% 18% PENSION

CHILD LIFE
23% TAX SAVER

Total no. of sample : 50

Area of survey : JAIPUR

 Findings

The major finding of this part of the research study is that Private employees use insurance

mainly as an age old tool of Security and they spend equally on Child Life, their life and Tax

saving.

PURPOSE OF INSURANCE (GOVERNMENT EMPLOYEES)

18% 20% INVESTMENT

LIFE
PENSION
24% CHILD LIFE
22%
16% TAX SAVER

Total no. of sample : 50

Area of survey : New Delhi

Findings

The major finding of this part of the research study is that Government employees spend

more on their life and Child Life compared to other sections of the society.

DEGREE OF AWARENESS

AMONG DIFFERENT GENDERS

OF THE SOCIETY

MALE:
 KNOW
22%
INSURANCE
45% DON'T KNOW
INSURANCE
33% CAN'T SAY

No. of sample : 50

Area of survey : JAIPUR

FEMALE:

KNOW
28% 27% INSURANCE
 INSURANCE
CAN'T SAY
45%

No. of sample : 50

Area of survey : jaipur

Our Performance vis-à-vis Competitors

The performance analysis is to present how HDFC SL Unit Linked Funds are performing

against the Benchmark and our Competitor Funds.

We have illustrated how our unit-linked funds available to our Retail Life Business have

performed so far.

The products for which these funds are available:

I. HDFC Unit Linked Endowment Plan

II.HDFC Unit Linked Young Star Plan

PRIVATE MARKET SHARE – RETAIL:

MARCH – JUNE, 2008

 ICICI
PRUDENTIAL
MAX NYL

HDFC

BIRLA SUN
8% 4% 3%
9% 40%
BAJAJ
7% ALLIANZ
7% OM KOTAK
12% 10%
SBI LIFE

TATA AIG

OTHERS

QUESTIONNAIRE

1. Do you plan for future investment? Yes/No

2. Do you save money for future? Yes/No

3. Are you aware of insurance? Yes/No

4. Are you a Taxpayer? Yes/No

5. Have you taken any insurance policy? Yes/No

(if ‘Yes’, name company______________________)

6. Generally, where do you invest your savings?

Preferences Name

 In Banks ………………

 In Insurance ………………

 In Mutual Funds ………………

 In Shares ………………

7. Who made the path of investment easy for you?

(Name andContact No.________________________________________)

 8. Do you think Mutual Funds together with Life Insurance, are more helpful?

Yes/No

9. Are you aware about private life insurance companies?

Yes/No

CONCLUSION

PEOPLE HAVING HDFC STANDARD LIFE POLICY

78
80% %
60%
40%
20% %
0%
Yes No

According to the survey, 22% customers do not have HDFC SLIC products and 78%

customers have HDFC SLIC products. As HDFC SLIC recently entered the insurance sector,

in 4 years it has captured a big market, which is a great achievement for HDFC SLIC.

People buy HDFC SLIC products because it gives them dual benefits. It ensures the money

that people invested in it and gives good rate of return, and secondly, it enables them to sell

its products much more effectively in a short span of time.

GRAPH SHOWING SATISFACTION WITH

HDFC SLIC PREMIUM POLICY

25%
SATISFIED
NOT SATISFIED
75%

Approximately, 82% customers are satisfied with the premium policy of HDFC SLIC. It

means that bulks of the policy holders are satisfied with the premium policy of HDFC SLIC.

Only a meager percentage of 28% customers are not satisfied with the premium policy.

This does not have any negative impact on the creditworthiness of the organization.
 SATISFIED WITH REGULAR SERVICE OF

HDFC STANDARD LIFE

100% 85%
80%
60%
40%
15%
20%
0% D
IE
SF
S
A

TI
TI

SA
S
FI

T
E

O
D

According to the survey, 85% of the customers are satisfied with the regular service of

HDFC SLIC, and 15% customers are not satisfied. The services such as intimation for

payment of due premium in time, and about other related documents of the policies, fall

under this category

MARKET EXPANSION

There has been an overall expansion in the market. This has been possible due to increased

awareness levels, thanks to the large number of advertising campaigns launched by the

players. The scope for expansion is still unlimited as virtually all the players are

concentrating on large cities and towns, except for LIC, which made a significant effort to

tap the rural market.

NEW PRODUCT OFFERING

There has been a plethora of new and innovative products offered by the new players, mainly

due to the stability of the customers of the international partners which range from a large

variety of products from pure terms (risk) insurance to unit-linked investment products.

Customers are offered unbundled products with a variety of benefits as riders, from which

they are to choose. More and more customers are buying products and services based on their

true needs and not just traditional money back policies, which are considered very

appropriate for long-term protection

and saving. However, there are still some key products to be introduced, such as, health

products.

CHANNELS OF DISTRIBUTION
Till the last two years, the only mode of distribution of life insurance products was the

insurance agents. While agents still continue to be the predominant distribution channel,

today a number of innovative alternative channels of distribution are being offered to the

customer. Some of them are banc assurance partners, brokers, and direct marketing. The

widespread reach of bank branch network in India could lead to banc assurance emerging as

a significant distribution mechanism.

RECOMMENDATION

VARIETY BASED POSITIONING

This type of positioning is based on varieties in products and services rather than customer

segments. It is a sensible strategy in offering certain products and services. In the insurance

industry also it is possible to achieve a unique position by focusing on certain category of

products. One such example is Birla Sun Life Insurance, which has been focusing on

investment related products since its launch in India. Through its superior fund management

capabilities, the insurance company can deliver better returns on the investment related

products, and, thereby, carve a niche for itself in a leading position in this segment.

NEED BASED POSITIONING

This type of positioning is based on the different needs of different groups of customer. This

can be done successfully if a company has unique strength to offer particular service to a

group of customers to satisfy their needs better than others.

The insurance needs of customers vary significantly among different groups of customers.

The insurance needs of young families with small children will be different than the families

in which the bread winner is close to retirement. However, in India, most of the life insurance

companies have a wide variety of products tailored for different needs of the customers, and

there is no company known to focus on a particular customer need

ACCESS BASED POSITIONING

Positioning of customer can also be done in the way by which they are accessible. Different

groups of customers may be accessible by different ways even though they may have similar

needs. Access is simply a function of customer geography or customer scale.

There is excellent opportunity in the insurance industry to employ access based positioning

by targeting the rural insurance sector. The rural market for insurance is very different than

urban market in terms of needs, income levels, and penetration of media, and so on. So far,

except for LIC, no player has paid attention or focus on the rural sector.

OSING THE RIGHT STRATEGYCHO

The right strategy is not a matter of positioning choice alone. It involves the very way the

company organizes itself to do business. It is a configuration of the entire value chain of the

organization through a different set of activities to deliver unique products and services to the

customer. The set of activities cover all upstream and downstream activities, from the

selection of the product mix, the way the products are priced, promoted, the type of

distribution mechanism used, the way customers are services, and so on.

Some life insurance companies focusing on rural market has adopted innovative means of

distribution. Instead of appointing agents as is done typically, they have used gram sevaks in

different villages across the country to promote life insurance and act as their sales arm. This

enabled them to tap the knowledge of the local people, establish the concept of the product in

their mental filter and ultimately striking a deal.

BIBLIOGRAPHY
 PHILIP KOTLER (MARKETING)

(RESEARCH METHODOLOGY)

 TIMES OF INDIA (MAY-JULY, 2008)

 ECONOMIC TIMES (MAY-JULY, 2008)

 www.hdfcinsurance.com

 INSURANCE JOURNALS:

1) IRDA 2007-08

2) IRDA 2006-07

GLOSSARY
Accident

The accident is defined in the policy document as follows –

“The accident must be caused by violent, external, and visible means and the cause of

injury/injuries is solely independent of any other means”.

Accident death benefit

Benefit is that which provides for the payment of an additional sum (usually equal to the sum

assured of the basic policy) in the event of death by an accident.

Amount Payable

This refers to the amount that is payable according to the terms and conditions of the

insurance policy to the legal heir. This includes payment of agreed payments at regular

intervals from a fixed date. This continues until the death of the individual, on whose life the

annuity is bought.

Annuity

An investment option that makes a series of regular payments to an individual in exchange

for a premium or a series of premia.

Asset

Everything owned or due to a person

Balanced Fund
A fund that maintains a balanced portfolio, generally, 60% bonds or preferred stocks and

40% common stocks.

Bonus

The amount paid as return in a ‘with-profit’ policy. The bonus, expressed as a percentage of

the sum assured, is generally declared every year. The amount is linked

to the profits earned by the insurer. Depending on the time of withdrawal, there are two kinds

of bonuses – reversionary and cash. A reversionary bonus can be encased only on maturity of

the policy; a cash bonus can be withdrawn when declared

Capital gains

Profit earned from the sale of stocks, mutual fund units and real estate. Long-term capital

gains arise from assets owned for more than a year while short-term capital gains are made

from assets owned for less than a year.

Claim

Written request by an insured for the insurance company to cover an incurred loss, usually

submitted on the company’s standard form.

Compound Interest

Interest computed on principal plus interest accrued during the previous periods of the

investment

Date of commencement

The date on which insurance cover begins, following acceptance of the risk by the insurer.

Death benefit
The amount payable to the nominee on death of the policyholder. The amount paid is the sum

assured plus benefits applicable (if any) less outstanding loans.

Declining term cover

A type of pure life protection insurance policy where the premia remain the same while the

life coverage keeps declining. They are typically used to cover the life of a person with a

pending loan repayment, like home loan.

Deferred annuity

An annuity plan where the first annuity payment becomes payable after a chosen period that

exceeds one year.

Dividends

Payments made by companies and mutual funds to shareholders and unit-holders,

respectively, from the income generated by it.

Down payment

The money that a home buyer has to contribute, often at least 15 per cent of the value of the

house, when he is taking a home loan.

Death benefit payable

The amount payable, as stated in a life insurance policy, to the designated beneficiary(ies)

upon the death of the insured. The amount paid is the face value plus any riders that are

applicable, less any outstanding loans.

Emergency fund
The money, in the form of liquid investments in bank savings accounts, two-in-one accounts

and liquid funds, you need, to take care of emergencies like a job loss that your insurance

policies wouldn’t cover

Endowment plans

An insurance plan that provides a policyholder risk cover and some return on investment.

Usually suitable for the risk-averse

Effective rate of interest

The true rate as against the nominal rate, which may be incorrect.

Estate

All assets of a person, both financial-like stocks, bonds, mutual funds and fixed deposits and

physical-like a house and gold that can be passed on to his heirs.

Estate planning

A financial plan to ensure the transfer of all your assets-both financial, such as fixed deposits

and stocks and physical, such as home, after your death to your heirs without any delay or

loss.

ELSS (equity-linked savings schemes)

Diversified equity funds that additionally offer a tax deduction under Section 80C on

investments up to Rs.1 lakh.

EMI (equated monthly installment)

A borrower must make this payment each month towards repayment of interest and principal

of a loan taken by him.

Equity

The actual ownership interest in a specific asset or group of assets

Endowment

A type of insurance policy which provides for the face value stated in the contract to be

payable in a fixed date or on the life insurer’s early death.

Equity

A stock or the interest in capital gains received from the ownership of a stock.

Financial planning

It covers the essential elements of a person’s financial affairs and is aimed at achieving a

person’s financial goals.

Fixed deposit

Funds placed on deposit in a bank, company or post office at a fixed rate of interest.

Floating rate loan

Interest rate charged on a loan benchmarked to a particular lending rate. The rate gets

adjusted during the tenure of the loan as the benchmark interest rate changes.

Group Insurance
An insurance policy taken out by employers to provide life cover to their employees. Usually

the cheapest form of insurance.

Guaranteed additions

The amount paid as returns in assured-return insurance plans. Guaranteed additions are

expressed as a percentage of the sum assured, with the amount payable being stated by the

insurer at the outset.

Hospital cash benefit rider

A rider that provides cover for hospitalization

Immediate annuity

An annuity that starts payments immediately after, or soon after, the first premium is paid

Insurance

A fund that primarily seeks current income, than growth of capital. It will tend to invest in

stocks and bonds that normally pay higher dividends and interest.

Investments

Assets like fixed deposits, post office savings, bonds and stocks that are acquired for the

purpose of earning a return

Investment risks

The risks that your investments face. These include the risk of interest rate fluctuations

impacting your debt investments or the prices of equities going down.

Level term cover rider

A rider that increases the life cover in non-term plans, up to a maximum of the sum assured

on the base policy. The rider offers death benefit along, and serves the need for extra

protection for a specified time period.

Loyalty additions

Additional benefits (other than guaranteed additions/bonus) paid to policyholders on maturity

of certain investment-based insurance plans for staying on through its term. Loyalty additions

are paid as a percentage of the sum assured, with the amount depending on the insurer’s

financial performance.

Money-back plans

A variant of endowment plans in which survival benefits are disbursed through the policy

term, rather than in a lump sum at the end.

Net asset value (NAV)

The simplest measure of how a scheme is performing, it tells how much each unit of it is

worth at any point in time. A scheme’s NAV is its net assets (the market value of the

financial securities it owns minus whatever it owes) divided by the number of units it has

issued.

Nominee

The person(s) nominated by the policyholder to receive the policy benefits in the event of his

death.
DECLARATION

This is to certify that the project entitled “Emerging Investment Dynamics In Life

Insurance Industry” at HDFC Standard Life, Jaipur is my indigenous and original work

and that it has not been used for the purpose of awarding any degree or diploma in any other

university.

Date:

Place:

RAKESH KATARIA