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Life insurance Life insurance Document Transcript

  • A DESCRIPTIVE PROJECT REPORT ONCOMPARATIVE ANALYSIS OF LIFE INSURANCE PLANS
  • 1. INTRODUCTIONLife insurance:Life insurance in its modern form came to India from England in 1818 with formation oforiental insurance company in Calcutta mainly by Europeans to help windows of theirkin. Later due to persuasion by one of its directors, Indians were also covered by thecompany. By 1869,285 companies were doing business of insurance in India. Earlierthese companies were governed by Indian companies’ act 1866. By 1870, 174 companiescease to exit, when British parliament enacted insurance act 1870. However untilindependence foreigners especially Britishers held its direct control would be able tomeet the national objectives of growth, equity, resource mobilization &employmentgeneration. Consequently government of India nationalized the life insurance industry inJanuary 1956 by merging about 250 life insurance companies and forming life insuranceCorporation of India, which started functioning from 1st September 1956.In spite of phenomenal growth of life insurance corporation of India particularly in 80’sthe government and public at large were quite satisfied with it. By signing GATT accord,the government of India committed to opening of insurance sector to private sector-tolocal and global players. A committee under chairmanship of late R.N.Malhotra (exgovernor of RBI) was appointed by the government to look into all aspect of insuranceindustry in India. Lok Saba has enacted the insurance Regulatory and DevelopmentAuthority Act 1999. In terms of the act insurance has enacted the insurance Regulatoryand Development Authority is being set up to the private sector.Life insurance is a co-operative risk-sharing plan, based on the incentives of industrialthrift and initiative. Through life insurance, people are able to set aside portions of theirincome during their earnings years, to make provisions for the time when their incomecease, because of early death, retirement, etc.
  • 1.1 INDUSTRY PROFILEEVOLUTION OF LIFE INSURANCE: In India, insurance business was stared in the year 1938 under the country. Its headoffice was located in Delhi with branch offices in Mumbai, Calcutta and Chennai. A largenumber of both India and foreign companies were set up in the country. However tillindependence foreigners mainly held 40% of him insurance business. Pioneering effortsof reformers and social workers like Raja Ram Mohan Roy, Dwarakanth Tagore,Ramatham Lahari, and others led Indians into the insurance business. First Indianinsurance company under the name “Bombay life assurance society” started its operationin 1870 and started covering Indian lives at standard rates. Later, “Oriental GovernmentSecurity Life Assurance Company” was established in 1874, with Sir Phirogosh Mehta asone of its founder directors and later emerged as a leading insurance company.Prior to 1912, there was no statuette in India to regulate the conduct of insurance in thiscountry. In that year, life insurance companies’ act 1912 was enacted with a view toprotecting the Indian policyholders based on the English law on the subject. As thebusiness of insurance began to grow it was found necessary to consolidate and amend thelaw to safeguard the interest of policyholders, to check the growth of mushroominsurance companies carrying on insurance business. Accordingly the insurance act 1938was enacted.LEGISLATION:Insurance is a federal subject in India. The primary legislation that deals with insurancebusiness in India is: Insurance act 1938, and insurance regulatory and developmentauthority act 1999.LIFE INSURANCE CORPORATION ACT 1956:Life insurance business in India was nationalized with effect from 19 th Jan 1956, fromthis date, the life insurance business transacted by 154 Indian life insurance offices, the View slide
  • Indian business of 16 non-Indian insurance operating in India and 75 provident societieswas taken over by government of India. LIC of India act was passed by government ofIndia.Lic of India started its functioning as a corporate body from 1-7-1956.its working isgoverned by the LIC act. Some of the provisions of this act (as amended by IRDA act1999) are stated hereafter.The LIC is a body corporate having perpetual succession and a common seal with powerto acquire, hold and dispose of property and may by its name sue and be sued. It consistsof not more than 16 members appointed by the government, one of whom shall beappointed as its chairman. The corporation’s duty is to carry on life insurance business tothe best advantage of the community. The corporation should make actuarial valuationonce I every 2 years, vide section 26. At least 95% of the surplus disclosed by actuarialvaluation is to be distributed among with- profit policyholders. The remainders shall bepaid to the Central Government. .INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:This Act was passed by parliament in December 1999 and it received presidential assentin January 2000. This Act provides for the establishment of the Authority to protect theinterest of holders of insurance policies, to regulate, promote and ensure orderly growthof insurance industry and for the matters connected therewith or incidental thereto. It alsosought to amend the insurance Act, 1938, the life insurance corporation Act 1956 and theGeneral insurance Corporation Act 1956 and the General Insurance business(nationalization) Act 1972.Under this Act, an authority called IRDA has been established. This is a corporate bodyestablished for the purpose and objects as set out in the explanation to the title. The“Authority” replaces “Controller” under Act 1938. The first schedule amends InsuranceAct 1938. it states that if “Authority” is super ceded by the Central Government , the“controller” of insurance may be appointed till such time as “Authority” is reconstituted. View slide
  • INDIAN INSURANCE INDUSTRY: AN INSIGHTWhy Life Insurance?Life insurance has come a long way from the earlier days when it was originallyconceived as a risk-covering medium for short periods of time, covering temporary risksituations, such as sea voyages. As life insurance became more establishment, it wasrealized what a useful tool it was for a number of situations, including-a. Temporary needs/ threat:The original purpose of life insurance remains an important element, namely providingfor replacement of income on death etc.b. Investment:Put, simply the building up of savings while safeguarding it from the ravage of inflation.Unlike regular saving products, investment products are traditionally lump suminvestments, where the individual makes a one off payment.c. Retirement:Provision for later years becomes increasingly necessary, especially in a changingcultural and social environment. One can buy suitable insurance policy, which willprovide periodical payment in one’s old age.ADVANTAGES OF LIFE INSURANCE:Depending on usage life insurance gives various benefits.*Income for your family.Life insurance proceeds ensure a source of financial security for the family to meet itshousehold and living expenses.*Pay off debtsOn the unfortunate death of the insured, the proceeds from a life insurance policy can beused to meet outstanding debts such as mortgages car loans or charge account balances.
  • *Provide educational funding for your childrenThe cash value of a whole life insurance policy can be used to help accumulate funds forthe higher education of your children.*Equalize inheritanceWhen an asset such as the family business passes on to family members who are active init, life insurance proceeds can be used to provide equal assets to other family members.*Superior to an ordinary saving planThe risk of death is covered under insurance scheme but not under ordinary savings.INDIAN INSURANCE INDUSTRY:Insurance industry, as on 1-4-2000, comprised mainly 2 players:The state insurers:Life insurers*Life Insurance Corporation of India (LIC)General insurers*General Insurance Corporation of Indian (GIC)The prospects of insurance industry in India-a glimpse:India is the most lucrative insurance market: Besides acclaimed as being one of thelargest democracy in the world India stands fifth in terms of purchasing power parity(PPP). During the last decade, the country posted an average annual GDP growth rate of6% with a savings ratio of 26% over the GDP. The Indian market has become the mostlucrative avenue for the global players following the domestic/global reforms in thefinancial sector.The Indian insurance industry has undergone radical changes, more so during the postliberalization era. From being an open market it was nationalized only to be liberalizationyet again in the 1990’s. Until then, the state owned life insurance Corporation of Indiaand the general insurance corporation of India held their monopoly in the life and general
  • insurance sector respectively. With open to the private players. Currently, India is one ofthe lucrative markets to venture into the insurance business. The market size is valued atRs. 14,000 crores by 2014. The global reinsurance company, Swiss re expects the Indiainsurance market to reach new heights to reach $50 billion in the next 10 years with lifeinsurance contribution almost $40 billion. The assessment stands good: given the fact that75% of the Indian population still remains uninsured.Some of the players in this segment of life insurance are: • Reliance life insurance • Life insurance corporation • ICICI prudential • HDFC life insurance • TATA AIG life insurance • Om kotak mahindra • Aviva life insurance • Max new York life • Birla sun life • Met life insurance • Sahara life insurance • Bharati axa life insurance • Bajaj allianze life insurance • SBI life insurance • Ing Vysya life insurance • Shriram life insurance
  • 1.2 COMPANY PROFILEReliance capital is India’s fastest growing private sector financial services company. Itranks among the top three private sector banking and finance companies in India.Reliance capital has a strong presence in asset management and mutual funds, life andgeneral insurance, private equity and proprietary investments, stock broking and otherfinancial services. It has a net worth in excess of Rs.5,600 crores and shareholders base of1.3 million.Companies that operate under Reliance Capital are: • Reliance life insurance • Reliance mutual funds • Reliance general insurance • Reliance money • Reliance asset reconstruction • Reliance telecom • Reliance communication infrastructure • FLAG telecom • Reliance telecom infrastructureReliance life insurance:Reliance life insurance is one of India’s fastest growing life insurance company with pan-Indian presence and a range of products that caters to individual and corporate needs –from savings and pension to protection. Investment and employee benefit plans. It’svision to emerge as a transnational life insurer of global scale and standard. Reliance lifeinsurance is an associate company of reliance capital limited.Reliance life insurance was promoted by reliance capital a group company of “ANILDHIRUBHAI AMBANI GROUP”. It was come into field by acquisition of existinginsurance company named “AMP SANMAR LIFE INSURANCE CO”. Acquisition tookplace in the month of Oct 2005. By January 2006 the company started its operations.
  • Reliance life insurance is the only second company managed wholly by an Indiancompany whereas all other companies came into insurance along with a foreign partner.STRENGTHS:The company has wide range at products catering to needs at different customers. It hasstrong management team heading dedicated sales team. This was supported by excellentinfrastructure and information technology.VALUES:1. Recognizing the different needs of our customers, we will be offering a Range of innovative products to meet these needs.2. We appreciate the trust placed by our policy holders in us. Hence, we will Aim to manage their investments very carefully and live up to their trust.3. Providing long term financial security to our policy holders will be our Constant endeavor. We will do this by offering life.Company Products:Individual Plans:Savings (endowment): • Reliance Endowment Plan • Reliance Special Endowment Plan • Reliance Cash Flow Plan • Reliance Child Plan • Reliance Whole Life Plan • Reliance Connect 2 Life PlanRetirement: • Reliance Gold Year Plan • Reliance Gold Year Plan Value • Reliance Gold Year Plan Plus
  • Unit Linked: • Reliance Automatic Investment Plan • Reliance Money Guarantee Plan • Reliance Market Return PlanRisk/Protection: • Reliance Term Plan • Reliance Simple Term Plan • Reliance Special Term Plan • Reliance Credit Guardian Plan • Reliance Special Credit Guardian PlanEmployee Benefits Plan:Risk (Protection): • Reliance Group Term Assurance Policy • Reliance EDIL SchemePension: • Reliance Group Gratuity Policy • Reliance Group Superannuation Policy
  • 2. ABOUT THE STUDY2.1 NEED FOR THE STUDYIn India very few people were covered under various pension schemes in the market.Mainly employees of various government organizations were covered under these. In aneffort to cover every individual under pension scheme IRDA has given approval foralmost all comparisons for running pension plans under their productsAt present many companies are offering pension plans under their product umbrella. Thisstudy was undertaken to analyze the various pension products offered by major insurancecompanies in the market and come out with a comparative solution to find which productis best one.
  • 2.2. OBJECTIVES OF THE STUDY • To study various pension plans offered by the Reliance life insurance. • To study how pension plans in Reliance life insurance are different from LIC, TATA AIG, and ICICI prudential.
  • 2.3 RESEARCH METHODOLOGY2.3.1 RESEARCH DESIGNThe research objectives defined, the next step is to select the research design to beadopted to conduct the tests. According to the information needed, the present study is adescriptive study of pension plans offered by insurance companies.2.3.2 DATA COLLECTIONThe information presented in the report has been drawn from both primary data andsecondary data.Primary dataData has been collected through discussions held with the executives’ of the company(sales manager, business development manager) and agents.Secondary dataData has been collected from the material provided by the company books, magazinesand information online.2.4 SCOPE OF THE STUDYThe research study is confined to the twin cities of Hyderabad and Secunderabad.2.5 LIMITATIONS • To study is confined to pension plans practiced is confined to Reliance life insurance only. • Due to confidentiality, access to complete information was not possible. • The recommendations are based on the information provided by the company. • Data has been compared with select companies LIC, TATA AIG, ICICI assuming they are the top insurance companies.
  • 3. INTRODUCTION TO PENSION PLANSA pension plan is a fund that is established for the payment of retirement benefits. Theentities that establish pension plan called the plan sponsors are private business entitiesacting for their employees, state and local entities acting on behalf of their employees,operating on behalf of their members and individuals representing themselves.In olden days, pension fund sponsors inhabited a quiet comfortable world in which theyturned over everything to the local bank trust officer and took a two hours lunch that hasall changed. Today plan sponsors are legally responsible for the investment of millionoften billions of dollars, often the plan sponsor is also responsible for the in housemanagement of assets invested in wide range of instruments.Pension fund:The employer and or the employees sponsor of a pension plan, which include co-operation, government entities and labor unions, finance pension funds. Governmentsponsored pension plan are called public pension funds. Pension plan sponsored by labour union are called Taft Hartley pension fund.Types of pension plan:There are two basic and widely used types of pension plans. They are called definedcontribution plans and defined benefit plans. A new idea, a hybrid often called “designedpension”, combines features of both these types.Managers of pension funds - A plan sponsor can do one of the following with pension asserts under its control. - Manage all the pension assets itself( i.e. use in house management) - Distribute the pension assets to one for more money management firms to manage (use external money managers). - Combine alternatives (1) and (2).
  • In case of a contributory pension plan, the plan sponsor typically allows the participant toselect how to allocate their contribution among fund managed by fund group.Insurance companies also have subsidiaries that mange pension funds. Mangers ofpension fund money obtain their income from a fee charged to manage the assets. Theannual fee can range 0.75% of assets under management. The fees are lower thanadvisory fees for investment companies in which small investors tend to invest smallaccounts, because of the economies of scale associated with managing large amounts ofmoney for pension funds. Some plan sponsors have been entering into management feecontracts based on performance rather than on a fixed % of assets under management.Pension advisersMoney managers are responsible for handling the funds allocated to them by the plansponsor. The plan sponsor is responsible for other critical decision in the investmentmanagement process. To assist plan sponsors in making various decisions in theinvestment management process, external pension fund advisers or consultants areengaged. - Developing plan investment policy and asset allocation among the major asset classes. - Doing actuarial advising (liability modeling and forecasting). - Designing benchmarks that the funds money managers will be measured against. - Measuring and monitoring the performance of the funds money managers. - Measuring trading costs and analysis of these costs.
  • RLIC Sl.No Name of Entry Minimum Term Maximum Mode of the plan Age Sum Maturity Payment Assured Age Golden Yearly 1 Year 18 25000 5 70 Half Quarterly Monthly Golden Yearly 2 Year 18 25000 5 64 Half Plus Quarterly Monthly Golden Yearly 3 Year Plus 18 25000 5 64 Half Quarterly monthlyICICI Sl.No Name of Entr Minimum Term Maximum Mode of the plan y Sum Maturity Payment Age Assured Age 1 Forever Life 18 Rs 50,000 5 70 One time 2 Life Stage Yearly Pension 18 Rs 50,000 10 80 Half Monthly 3 Premier Life 3 years Pension 18 Rs 0 10 80 5 years 4 Life Time Yearly Super Pension 18 Rs 50,000 10 75 Half monthly 5 Life Link Yearly Super Pension 18 Rs 25,000 10 75 Half monthly 6 Immediate Annuity 45 Rs 25,000 - 80 One time
  • Life Insurance Corporation Sl.no Name of the Entry Minimum Term Maximum Mode of plan age Sum Maturity payment assured age 1 Jeevan Yearly, Dhara 18 Rs 20000 2 - Half-year Plan no-96 2 Jeevan Akshay 30 Rs 10000 - no One time Plan no-97 3 Jeevan Suraksha 25 - 5 70 Yearly Plan no-122 Half-yearly 4 New Jeevan Akshay Plan 30 Rs 10000 - none One time no-144 5 New Jeevan Yearly Dhara Plan 12 Rs 20000 n/a 75 Half No-145 Yearly Quarterly Monthly Bima 6 Nivesh 35 Rs 25000 5 75 Single 2001 Plan Premium No-141
  • TATA AIG: Sl.no Name of Entr Minimum Term Maximum Mode of The plan y Sum Maturity payment age Assured Age Nirvana Regular 1 Pension 18 - - 65 Premium Nirvana Regular 2 Plus 18 Rs 100000 10 - premium Maha life 3 Gold 0 - 15 60 - Invest Regular 4 Assure Gold 18 - 5 & 10 75 And Single Easy Retire 5 21 - - 80 Single Easy Assure Yearly 6 Gold 18 Rs 25,000 - 75 Half Quarterly
  • monthly 4. RELIANCE LIFE INSURANCE PENSION PLANS1. GOLDEN YEARS PLANPurpose:This policy is basically unit linked savings contract which is designed to provide anincome for life after retirement with an option to take the lump sum elsewhere to buy theannuity.Commitments:In this plan one has to pay a single premium or level premium in installment due everyquarter, half-year or year throughout the deferment period of the policy, after which onewill start receiving pension.
  • Key features: • Invest systematically and secure your Golden Years . • A flexible unit linked pension product that is different from traditional life insurance products with vesting age between 45 and 70 years. • Four different investment funds to choose from • Flexibility to switch between funds • Option to pay regular, single as well as top-up premiums • Flexible to advance/extend your vesting age • Tax free commutation up to one third of fund value at vesting age.How does pension plan works?As this policy is basically a saving contract which is designed to provide an income forlife after retirement, subject to prevailing regulations art of this lump sum can be taken inform of cash and the rest converted to an annuity at the rate then offered by the RLIC.One can buy an annuity with any other company who accepts such business.In this plan premium for all ages are same. On the death of policy holder for regularpremiums and single premiums net fund value will be paid to the Nominees of the policyon maturity net fund value will be paid in case of both single and regular premiums.The age and term limits for taking out a Goldenyear plan: Minimum Maximum Minimum Maximum Minimum Maximum term term Age entry Age entry Age of Age of vesting vesting Regular Premium 40 18 65years 45years 70years 10 Single Premium 15 35 5Loans are not paid against this contract. One can surrender the policy after issue years ofcommencement.
  • Surrender values:1st to 3rd year - 0%4th year - 90%5th year - 95%6th year - 100%Tax benefit;Section 80(`c) of the income tax is applicable.2. GOLDEN YEARS (VALUE) PLANThis plan helps to meet the financial need after retirement. It allows building up aretirement fund for future and during unfortunate demise. This plan basically a insurancecontract, which is designed to provide a retirement income for life premiums are investedin units of the investment fund.Premiums have to be paid regularly either quarterly, half yearly or yearly throughout theterm of the policy or a single premium at the start of the policy, Rs.10000 for each yearand for single premium it is Rs.25,000.One can choose the following funds equity fund, growth fund, balanced fund, and capitalsecured fund. One can switch among these funds.Benefits:As per the regulations part of this value can be taken in form of cash(1/3 rd ) lump sumand rest converted to an annuity at that rate then offered by RLIC or any other can payoffering annuities.The age and term limits: Minimum Maximum Minimum Maximum Minimum Maximum term term Age entry Age entry Age of Age of
  • vesting vesting Regular Premium 5 46 18 59 45 64 Single Premium 5 46 18 59 45 64The policy holder can surrender the policy at any point of time after completion of threepolicies for regular premium policy, for single premium contract.Premiums paid under these plans are eligible for the tax benefits under the section 80(c)of the income tax act 1961.Charges deducted from the policy to cover the cost:A percentage of each premium is invested to buy units. This percentage is called theallocation charges. The rates are as follows: Premium paid (Rs) Investment content rate (ICR) Single premium • Initial payments 5% • single premium top-up 5% Regular premium • year1 10% • year2 5% • year3 5% Single premium increases 5%No changes can be made to current charges without prior to approval from the insuranceregulatory and development authority. In any case the management charges will notexceed 2% per annum.
  • Death benefit:In unfortunate event of death of policy holder company will pay to nominee an amountequal to sum assured or fund value which ever is high.3. GOLDEN YEARS PLUSPurpose:There will come a day when you will hang up your boots and relax. But in order toachieve that ultimate stress free mind set for your autumn years. It is the important plansnow fulfill your dream of building up a minimum desired retirement fund which willensure the independence you deserve.Commitment:It is a retirement plan that allows one to save systematically build up the much neededcorpus to make the Golden Years special while ensuring a basic minimum amountcollected should the unthinkable happen before one can achieve their dreams.Key features: • A flexible unit-linked pension product. Different from traditional products with vesting age between 45 and 64 years • Invest systematically and secure your Golden Years . • Four different investment funds to choose from • Flexibility to advance your vesting age • Tax free commutation up to one third of fund value at vesting age • Optional accident benefit rider. Minimum Maximum Minimum Maximum Minimum Maximum Term term Age entry Age entry Age of Age of vesting vesting 5 15 18 59 45 64
  • Death benefits:In the event of death of policy holder an amount equivalent to fund value plus sumassured will be paid to the policy holder. 5. DATA ANALYSISPension Plans at a Glance: Table 1: Pension Plans COMPANY LIC RLIC TATA AIG ICICI PRU PLAN New jeevan Goldenyear Nirvana Life Time Suraksha plus pension ENTRY AGE 18-65 18-59 18-55 18-60 RETIREMENT AGE(MAX) 50-79 45-64 50-65 50-70 PREMIUM m/q/h/a m/q/h/a m/q/h/a m/q/h/aPERIODICALLY TENURE(years) 2-35 5-46 10-47 5-30 SURRENDER Yes Yes Yes Yes VALUE GUARANTEED No No Yes No RETURNS
  • ANNUITY 5 3 2 5 RETURNS LIFE COVER No Yes Yes Yes TRANSFER OPTION No Yes Yes Yes TO OTHER ANNUITY SINGLE PREMIUM Yes Yes No No OPTION TAX-FREE CASH 25% 33.3% 25% 25%WITHDRAWALSComparison of Entry Age: Table 2: Entry Age PARAMETER: ENTRY AGE 66 64 62 ENTRY AGE 60 58 56 54 52 50 LIC RLIC TATA AIG ICICI COMPANY
  • MINIMUM ENTRY AGE: 18 years is common entry age for every company’s pensionplan.MAXIMUM ENTRY AGE: The age varies from company to company.INTERPRETATION:RLIC : The entry age for Golden Years Plus is 18-59years.LIC : The entry age for New Jeevan Surakshais 18-65 years.TATA AIG : The entry age for Nirvana is 18-55 years.ICICI : The entry age for Life Time pension is 18-60 years.Retirement Age: Table 3: Retirement Age PARAMETER: RETIREMENTAGE(MAX) 90 RETIREMENTAGE(MAX) 80 70 60 50 40 30 20 10 0 LIC RLIC TATA AIG ICICI COMPANY
  • INTERPRETATION:RLIC : The retirement age (max) for Golden Years Plus is 64years.LIC : The retirement age (max) for New Jeevan Surakshais 79years.TATA AIG: The retirement age (max) for Nirvana is 65years.ICICI : The retirement age (max) for Life Time is 70 years.Maximum Tenure: Table 4: Tenure maximum PARAMETER: TENURE(MAX YEARS) 50 45 TENURE(MAX YEARS) 40 35 30 25 20 15 10 5 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:
  • RLIC : The maximum term offered for Golden Years Plus is 46years.LIC : The maximum term offered for New Jeevan Surakshais 35years.TATA AIG : The maximum term offered for Nirvana is 47years.ICICI : The maximum term offered for Life Time pension is 30years.Minimum Tenure: Table 5: Tenure minimum PARAMETER: TENURE(MIN YEARS) 12 TENURE(MIN YEARS) 10 8 6 4 2 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:
  • RLIC : The minimum tenure for Golden Years Plus is 5years.LIC : The minimum tenure for Jeevan Surakshais 2 years.TATA AIG: The minimum tenure for Nirvana is 10years.ICICI : The minimum tenure for Life Time pension is 5 years.Annuity Returns: Table 6: Annuity Returns PARAMETER: ANNUITY RETURNS 6 ANNUITY RETURNS 5 4 3 2 1 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETAION :RLIC : The annuity returns for Golden Years plus is 3%.
  • LIC : The annuity returns for Jeevan Suraksha is 2%.TATA AIG : The annuity returns for Nirvana is 2%.ICICI : The annuity returns for Life Time pension is 5%.Cash Withdrawals: Table 7: Cash Withdrawals PARAMETER: TAX FREECASHWITHDRAWALS 35% 30% TAXFREE CASH WITHDRWALS 25% 20% 15% 10% 5% 0% LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:RLIC : Tax free cash withdrawals after vesting age for Golden Years plus is 33.3%.
  • LIC : Tax free cash withdrawals after vesting age for Jeevan Surakshaare is 25%.TATA AIG: Tax free cash withdrawals after vesting age for Nirvana are is 25%.ICICI : Tax free cash withdrawals after vesting age for Life Time pension is 25%.PARAMETER: SURRENDER VALUEINTERPRETATION:LIC : New Jeevan Suraksha is having surrender facility.RLIC : Golden Years plus is having surrender facility.TATA AIG: Nirvana is having surrender facility.ICICI : Life Time pension is having surrender facility.PARAMETER: PREMIUM PERIODICITYINTERPRETATION:LIC : LIC is offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.RLIC : RLIC is offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.TATAAIG: TATA AIG is offering monthly, quarterly, Half- yearly, Yearly mode forpaying their premiums.ICICI : ICICI is offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.
  • PARAMETER: GURANTEED RETURNSINTERPRETATION:LIC : New Jeevan Suraksha is not having guaranteed returns.RLIC : Golden Years plus is not having guaranteed returns.ICICI PRU: Life Time Pension is not having guaranteed returns.TATA AIG: Nirvana is having guaranteed returns.PARAMETER: SINGLE PREMIUMINTERPRETATION:LIC : New Jeevan Suraksha has single premium option.RLIC : Golden Years Plus has single premium option.ICICI PRU: Life Time Pension does not have single premium option.TATA AIG: Nirvana does not have single premium option..PARAMETER: LIFE COVERINTERPRETATION:RLIC : Golden Years Plus is giving life cover to its policy holders. It gives bothfund value and sum assured in the event of death.LIC : New Jeevan Suraksha is not giving life cover to policy holders.TATA AIG : Nirvana is also giving life cover.ICICI PRU: Life Time pension is also giving life cover.PARAMETER: ANNUITY TRANSFER OPTION
  • INTERPRETATION:LIC : New Jeevan Suraksha is not allowing its policy holders to take annuitiesfrom other companies.RLIC : Golden Years Plus policy holders has the option to take annuities fromother companies.ICICI PRU: A Life Time pension policy holder has the option to take annuities fromother companies.TATA AIG: Nirvana policy holder has the option to take annuities from other companies.Pension plans at glance: Table 8: Pension Plans COMPANY LIC RLIC TATA AIG ICICI PRU PLAN New Jeevan Golden Year Invest Dhara Value Assured Gold Life Link Super ENTRY AGE 18-60 18-59 18-70 18-70 RETIREMENT AGE(MAX) 53-75 45-64 100 45-75 PREMIUMPERIODICALLY y/h/q/m y/h/q/m y/h/q/m NoTENURE(years) 2-35 5-46 5-100 5-57 SURRENDER VALUE Yes yes yes yesGUARANTEED RETURNS yes no no Yes ANNUITY RETURNS 5 3 no 5 LIFE COVER
  • yes yes yes No TRANSFER OPTION no yes yes Yes TO OTHER ANNUITY SINGLE PREMIUM yes yes no Yes OPTION TAX-FREE CASH 25% 33.3% no 33.3%WITHDRAWALSEntry Age: Table 9: Entry Age PARAMETER: ENTRY AGE 72 70 68 ENTRY AGE 66 64 62 60 58 56 54 52 LIC RLIC TATA ICICI AIG COMPANYMINIMUM ENTRYAGE: 18years is common entry age for LIC, RLIC, ICICI, TATAAIG is the only company having 30years as min age at entry.
  • MAXIMUM ENTRY AGE: : It varies from company to company.INTERPRETATION:LIC : The entry age for New Jeevan Dhara is 60years.RLIC : The entry age for Golden Years Value is 59years.TATA AIG: The entry age for Invest Assured Gold is 70years.ICICI : The entry age for Life Link Super Pension is 70years.Retirement Age: Table 10: Retirement Age PARAMETER: RETIREMENT AGE(MAX) 120 RETIREMENT AGE(MAX) 100 80 60 40 20 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:LIC : The retirement age (max) for New Jeevan Dhara is 75 years.
  • RLIC : The retirement age (max) for Golden Years Value is 64years.TATA AIG: The retirement age (max) for Invest Assured Gold is 100years.ICICI : The retirement age (max) for Life Link Super Pension is 75years.Tenure: Table 11: Tenure Maximum PARAMETER: TENURE (MAX YRS) 120 TENURE (MAX YEARS) 100 80 60 40 20 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:RLIC : The maximum term offered for Golden Years Value is 46years.LIC : The maximum term offered for New Jeevan Dhara is35years.
  • TATA AIG : The maximum term offered for Invest Assured Gold is 100years.ICICI : The maximum term offered for Life Link Super Pension is 57years. Table 12: Tenure Minimum PARAMETER: TENURE (MIN YRS) 6 TENURE (MIN YEARS) 5 4 3 2 1 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:LIC : The minimum term in New Jeevan Dhara is 2years.RLIC : The minimum term in Golden Years Value is 5years.TATA AIG : The minimum term in Invest Assured Gold is 5years.
  • ICICI : The minimum term in Life Link Super Pension is 5 years.Annuity Returns: Table 13: Annuity Returns PARAMETER: TYPES OF ANNUITY RETURNS 6 TYPES OF ANNUITY 5 RETURNS 4 3 2 1 0 LIC RLIC TATA ICICI AIG COMPANYINTERPRETATION:LIC : LIC is offering 5 types of annuity returns in New Jeevan Dhara.RLIC : RLIC is offering 3 types of annuity returns in Golden Years Value.
  • TATA AIG : TATA AIG is not offering any type of annuity returns in Invest AssuredGold.ICICI : ICICI is offering 5 types of annuity returns in Life Link Super Pension.Cash Withdrawals: Table 14: Cash Withdrawals PARAMETER: TAX FREE CASH WITHDRAWALS 35% 30% TAX FREE CASH WITHDRAWALS 25% 20% 15% 10% 5% 0% LIC RLIC TATA ICICI AIG COMPANYINTERPRETATION:LIC : A tax free cash withdrawal after vesting age for New Jeevan Dhara is 25%.RLIC : A tax free cash withdrawal after vesting age for Golden Years Value is 33.3%.
  • TATA AIG: There is no tax free cash withdrawals after vesting age for investAssured Gold.ICICI : A tax free cash withdrawal after vesting age for Life Link Super Pension is 33.3%.PARAMETER: GURANTEED RETURNSINTERPRETATION:LIC : New Jeevan Dhara is having guaranteed returns.RLIC : Golden Years Value is not having guaranteed returns.ICICI : Life Link Super Pension is having guaranteed returns.TATA AIG: Invest Assured Gold is not having guaranteed returns.PARAMETER: LIFE COVERINTERPRETATION:RLIC : Golden Years Value is giving life cover to its policy holders. It gives bothfund value and sum assured in the event of death.LIC : New Jeevan Dhara is giving life cover to policy holders.TATA AIG : Invest Assured Gold is not giving life cover.ICICI : Life Link Super Pension is also giving life coverPARAMETER: SURRENDER VALUEINTERPRETATION:
  • LIC : New Jeevan Dhara is having surrender facility.RLIC : Golden Years Value is having surrender facility.TATA AIG: Invest Assured Gold is having surrender facility.ICICI : Life Link Super Pension is having surrender facility.PARAMETER: SINGLE PREMIUMINTERPRETATION:LIC : New Jeevan Dhara has single premium option.RLIC : Golden Years Value has single premium option.ICICI : Life Link Super Pension has a single premium option.TATA AIG: Invest Assured Gold does not have single premium option.PARAMETER: ANNUITY TRANSFER OPTIONINTERPRETATION:LIC : New Jeevan Dhara is not allowing its policy holders to take annuities fromother companies.RLIC : Golden Years Value policy holders have the option to take annuities fromother companies.ICICI PRU: A Life Link Super Pension policy holder has the option to take annuitiesfrom other companies.TATA AIG: A Invest Assured Gold policy holder has the option to take annuities fromother companies.PARAMETER: PREMIUM PERIODICITY
  • INTERPRETATION:LIC : is offering monthly, quarterly, Half- yearly, Yearly mode for paying theirpremiums.RLIC : is offering monthly, quarterly, Half- yearly, Yearly mode for paying theirpremiums.TATA AIG : is offering monthly, quarterly, Half- yearly, Yearly mode for paying theirpremiums.ICICI : is not offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.Pension plans at glance: Table 15: Pension PlansCOMPANY LIC RLIC TATA AIG ICICI PRUPLAN Market Plus Golden Invest Assured Premier Life Years Future PensionENTRY AGE 18-70 18-59 18-65 18-70RETIREMENTAGE(MAX) 40-75 45-64 45-75 50-80PREMIUMPERIODICALLY y/h/q y/h/q/m y/h/q y/h/q/mTENURE(years) 5-32 5-46 5-35 10-62SURRENDERVALUE yes yes yes YesGUARANTEEDRETURNS No No Yes NoANNUITYRETURNS No 3 No 5LIFE COVER Yes No Yes YesTRANSFEROPTION Yes Yes Yes Yes
  • TO OTHERANNUITYSINGLEPREMIUM Yes Yes Yes NoOPTIONTAX-FREECASH 33.3% 33.3% No 33.3%WITHDRAWALSEntry Age: Table 16: Entry Age PARAMETER:ENTRY AGE 72 70 68 66 ENTRY AGE 64 62 60 58 56 54 52 LIC RLIC TATA AIG ICICI COMPANYMINIMUM ENTRYAGE: 18 years is common entry age for LIC, RLIC, ICICI, andTATA AIG.MAXIMUM ENTRY AGE: : The entry age is different for different companies
  • INTERPRETATION:LIC : The entry age for Market Plus is 70 years.RLIC : The entry age for Golden Years plan is 59years.TATA AIG: The entry age for Invest Assured Future is 65years.ICICI : The entry age for Premier Life Pension is 70years.Retirement Age Table 17: Retirement Age PARAMETER: RETIREMENT AGE(MAX) 90 RETIREMENT AGE(MAX) 80 70 60 50 40 30 20 10 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETAION:LIC : The retirement age (max) for Market Plus is 75 years.RLIC : The retirement age (max) for Golden Years Plan is 64years.TATA AIG: The retirement age (max) for Invest Assured Future is 75years.
  • ICICI : The retirement age (max) for Life Link Super Pension is 80years.Tenure: Table 18: Tenure Maximum PARAMETER: TENURE( MAX YRS) 70 TENURE(MAX YEARS) 60 50 40 30 20 10 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETATION:RLIC : Maximum term offered for Golden Years plan is 46years.LIC : Maximum term offered for Market Plus is32years.TATA AIG : Maximum term offered for Invest Assured Future is 35years.
  • ICICI : maximum term offered for Premier Life Pension is 62years. Table 19: Tenure Minimum PARAMETER: TENURE (MIN YRS) 12 TENURE (MIN YEARS) 10 8 6 4 2 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETAION:LIC : Minimum terms in Market Plus is 5 years.RLIC : Minimum terms in Golden Years Plan is 5years.TATA AIG : Minimum terms in Invest Assured Future is 5years.ICICI : Minimum terms in premier life pension are 10 years.
  • Annuity Returns Table 20: Annuity Returns PARAMETER:TYPES OF ANNUITY RETURNS 6 TYPES OF ANNUITY 5 4 RETURNS 3 2 1 0 LIC RLIC TATA AIG ICICI COMPANYINTERPRETAION:LIC : LIC is not offering any types of annuity returns in Market Plus.RLIC : RLIC is offering 3 types of annuity returns in Golden Years plan.TATA AIG : TATA AIG is not offering any type of annuity returns in Invest AssuredFuture.
  • ICICI : ICICI is offering 5 types of annuity returns in Premier Life Pension.Cash Withdrawals: Table 21: Cash Withdrawals PARAMETER:TAX FREE CASH WITHDRAWALS 35.00% 30.00% WITHDRAWALS TAXFREE CASH 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% LIC RLIC TATA AIG ICICI COMPANY INTERPRETAION:LIC : A tax free cash withdrawal after vesting age for Market Plus is 33.3%.RLIC : A tax free cash withdrawal after vesting age for Golden Years Plan is 33.3%.
  • TATA AIG: There is no tax free cash withdrawals after vesting age for investassure future. ICICI : A tax free cash withdrawal after vesting age for Premier Life Pension is 33.3%.PARAMETER: GURANTEED RETURNSINTERPRETATION:LIC : Market Plus is not having guaranteed returns.RLIC : Golden Years Plan is not having guaranteed returns.ICICI : Premier Life Pension is not having guaranteed returns.TATA AIG: Invest Assured Future is having guaranteed returns.PARAMETER: LIFE COVERINTERPRETATION:RLIC : Golden Years Plan is not providing life cover.LIC : Market Plus is giving life cover to policy holders.TATA AIG : Invest Assured Future is giving life cover.ICICI : Premier Life Pension is also giving life cover.PARAMETER: PREMIUM PERIODICITYINTERPRETATION:
  • LIC :LIC is offering quarterly, Half- yearly, Yearly mode for paying theirpremiums.RLIC : RLIC is offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.TATA AIG : TATA AIG is offering quarterly, Half- yearly, Yearly mode for payingtheir premiums.ICICI : ICICI is offering monthly, quarterly, Half- yearly, Yearly mode for payingtheir premiums.PARAMETER: SURRENDER VALUEINTERPRETATION:LIC : Market Plus is having surrender facility.RLIC : Golden Years Plan is having surrender facility.TATA AIG: Invest Assured Future is having surrender facility.ICICI : Premier Life Pension is having surrender facility.PARAMETER: ANNUITY TRANSFER OPTIONINTERPRETATION:LIC : Market Plus is allowing its policy holders to take annuities from othercompanies.RLIC : Golden Years Plan policy holders has the option to take annuities from othercompanies.ICICI PRU: Premier Life Pension policy holder has the option to take annuities fromother companies.TATA AIG: Invest Assured Future policy holder has the option to take annuities from othercompanies.
  • PARAMETER: SINGLE PREMIUMINTERPRETATION:LIC : Market Plus have a single premium option.RLIC : Golden Years Plan have a single premium option.ICICI : Premier Life Pension is not having a single premium option.TATA AIG: Invest Assured Future have a single premium option 6. CONCLUSIONS AND SUGGESTIONSCONCLUSIONS: • Companies like LIC & ICICI allowing its customers to take policies till the age of 65 & 60 respectively. But RLIC is allowing only 59 or below aged people to take the policy. • LIC & ICICI allow its policy holders to receive pension from the age of 79 & 70 yrs respectively but RLIC allows till 64yrs only. • TATA AIG & RLIC have the advantage of offering maximum tenure to policy holders; where as others with offer lesser tenure. • Except LIC Jeevan Suraksha, all other companies offering minimum policy term as 5 years or more. Minimum 5 year term is the industry standard. • LIC & ICICI are offering 5 types of annuities where as RLIC is offering only three types of annuities. • RLIC is allowing its policy holders to withdraw maximum i.e., 33.3% at the time of vesting age whereas others allow only 25%. • Except TATA AIG Nirvana all other companies’ policies does not have guaranteed returns.
  • • LIC & RLIC has single premium option where as TATA AIG & ICICI PRU do not have single premium option.• Except LIC Jeevan Suraksha other policies offer life cover to its policy holders. But RLIC Golden Years Plus has the distinction of giving fund value and sum assured.• Except LIC all other companies allow its policyholders to receive annuities from other companies.• All the company’s are providing surrender facility to its customers.• Every company in the market offer monthly, quarterly, half- yearly, and yearly mode for paying their premiums.• At entry level almost all companies allow policy holders take policies from 18 years onwards. The maximum age limit for TATAAIG & ICICI were is till 70 years of age.• The retirement age for Golden Years Plus at is lesser than any other company• Maximum tenure offered by RLIC Golden Years Plus plan is lesser than TATA AIG & ICICI.• Except LIC all other companies offer a minimum term of 5 years.• TATA AIG Invest Assured Gold does not allow its policy holders to withdraw at vesting. LIC allow policy holders to withdraw only 25%, whereas RLIC Golden Years Plus and ICICI Life Link Pension Plan offer 33.3% of withdrawals at vesting.• LIC New Jeevan Dhara and ICICI Life Link Super Pension plans offer guaranteed returns. Where as RLIC Golden Years Plus & TATA AIG Invest Assured Gold do not offer any guaranteed returns.• Except RLIC Golden Years Plus no other companys’ offer FUND VALUE + SUM ASSURED on death.• Except TATA AIG Invest Assured Gold all other companies are offering single premium option.
  • • Except LIC all other companies allow its policyholders to receive annuities from other companies. • Except ICICI other companies in the market offer monthly, quarterly, half- yearly and yearly mode for paying their premiums. • The maximum entry age for LIC & ICICI as 70 years, whereas the maximum entry age for RLIC is 59 years. • Except RLIC for which the maximum retirement age is 75+, for other companies like ICICI the maximum term as 62 or less. • ICICI offers 10 years minimum term where as all other companies offer a 5 years minimum term. • Except TATA AIG all other companies allow its policy holders to withdraw 33.3% at vesting. • Except TATA AIG no other company is offering guaranteed returns. • Except RLIC all other companies offer life cover on its policies.SUGGESTIONS:A] GOLDEN YEARS PLUS: • It is advised that RLIC introduce 2 or more types of annuities in order to serve the various needs of customers. • RLIC also has to increase the maximum age for receiving pension on par with its competitors like LIC, i.e., to 79 years. • RLIC has to increase its maximum entry age to 65+ years. • RLIC does not offer any guarantee for its returns, it is advised to offer a guarantee on returns.B] GOLDEN YEARS VALUE: • It is advised to introduce guaranteed returns in its pension plan. • It is advised for the company to increase the maximum entry level to at least 70 years.
  • • It was advised to introduce a plan with higher retirement age. • Annuity options provided by RLIC are far lesser than in the industry hence, it is advised that RLIC offer more types of annuities in its new plans.C] GOLDEN YEARS PLAN: • It is advised to offer guaranteed return on its new pension plan. • It is advised to make its maximum terms more or on par with ICICI in its new plan. • Annuity options provided by RLIC are lesser than in the industry, hence it is advised that RLIC offer more types of annuities in its new plans. • It is advised that RLIC introduce life cover on its future pension plans. • It was advised that RLIC introduce a plan with maximum retirement age as 75+. • It is advised for RLIC to introduce a plan with Maximum entry age as 70+. BIBLIOGRAPHYBooks: 1. MARKETING MANAGEMENT – PHILIP KOTLER 2. RESEARCH METHODOLOGY- C.R. KOTHARI 3. MARKETING RESEARCH – BERIWebsites: 1. www.google.com 2. www.reliance life.co.in 3. www.icici prulife.com 4. www.tataaig life.com 5. www.lic.com