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Bazaz Allianze

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    Bazaz Allianze Bazaz Allianze Document Transcript

    • zzzzzzzzz 1 PROJECT REPORT ON COMPARISON OF PENSION PLAN OF BAJAJ ALLIANZ WITH OTHER COMPETITORS UNDERGONE AT BAJAJ ALLIANZ LIFE INSURANCE In partial fulfillment of the requirement for the Degree of “MASTER OF BUSSINESS ADMINISTRATION” SESSION (2006-2008) SUBMITTED TO INVERTIS INSTITUTE OF MANAGEMENT & STUDIES, BAREILLY AFFILIATED TO U.P. TECHNICAL UNIVERSITY, LUCKNOW Prepared By:- NITESH CHANDRA OJHA MBA 2nd YEAR ROLL NO. 0701570059 1
    • zzzzzzzzz 2 PREFACE THE PRESENT REPORT IS ON “THE COMPARISON OF WHOLE LIFE PLAN” OF THE COMPANY BAJAJ ALLIANZ LIFE INSURENCE WITH OTHER MAJOR INSURANCE PLAYERS. IN ADDITION, THE REPORT STUDIES THE COMPARATIVE ANALYSIS OF THE VARIOUS INSURANCE PLAYERS. THE AIM OF THE STUDY IS TO GAIN INSIGHT INTO THE WHOLE GAMUT OF WHOLE LIFE INSURANCE BUSINESS IN BAREILLY. IN THIS REPORT, THE BASIC FEATURES AND BENEFITS OFFERED BY BAJAJ ALLIANZ LIFE INSURANCE’S PENSION PLAN OVER OTHER COMPANIES HAVE BEEN ANALYZED. IT ALSO ANALYSES THE BENEFITS OR UNIQUE SELLING PROPOSITION OF THE COMPANY’S PENSION PLAN, WHICH GIVES IT A COMPETITIVE EDGE OVER OTHER INSURANCE COMPANIES. THE REPORT ALSO UNDERTAKES A SURVEY REGARDING THE AWARENESS ABOUT THE INSURANCE AS A MODE OF INVESTMENT FOR A PRUDENT INVESTOR. IT ATTEMPTS TO GAIN INSIGHT ABOUT THE CONSUMER BEHAVIOR REGARDING THE PURCHASE OF PENSION PLAN AS A MODE OF SAFETY AND SECURITY FOR THEIR FAMILY ANDTHEMSELVES. 2
    • zzzzzzzzz 3 Acknowledgements Any accomplishment requires the effort of many people and this work is no different. I thank Bajaj Allianz Life Insurance and its entire staff, whose support was instrumental in accomplishing the task. I would also like to express my sincere gratitude to Bajaj Allianz Life Insurance Company Ltd. for giving me this wonderful opportunity to work and get to know more about the insurance industry and life insurance market in general. It was a great experience to work with so talented and committed people. I would also like to express my sincere regards to MR.S.K. ROI (FACULTY IIMS) for extending her valuable guidance. He has been a source of inspiration and motivation incidental to the completion of my project. Many data of my findings are the result of a collection from various sources, such as magazines and many insurance companies. Regardless of the source, I wish to express my gratitude to those who may have contributed to this work, even though anonymously. 3
    • zzzzzzzzz 4 BAJAJ ALLIANZ LIFE INSURANCE MISSION PENSION With inflation eating away at buying power... taxes eroding the interest earned on savings... and the possibility of spending more than two decades in retirement, it's clear that a plan is needed to secure your retirement dreams. And, as the Life insurance rates are based primarily on age, the younger you are when you make this decision, the lower your premium will be. Make a decision today and ensure a more enjoyable, less tension filled tomorrow . . . 4
    • zzzzzzzzz 5 CONTENTS 1. EXECUTIVE SUMMARY 2. INTRODUCTION • COMPANY PROFILE (6-11) • PRODUCTS OFFERED BY THE COMPANY (12-17) • RETIREMENT (18-34) • RETIREMENT PLANNING (35-39) • 3. PROJECT OBJECTIVE (40-45) 4. APPENDICES-PENSION PLAN • BAJAJ ALLIANZ LIFE INSURANCE (46-54) • ICICI PRUDENTIAL LIFE INSURANCE (55-60) • HDFC STANDARD LIFE INSURANCE (61-65) • OM KOTAK MAHINDRA LIFE INSURANCE (66-68) • MAX NEW YORK LIFE INSURANCE (69-71) • ING VYSYA LIFE INSURANCE (72-75) • TATA AIG LIFE INSURANCE (76-77) • LIFE INSURANCE CORPORATION (78-79) • STATE BANK OF INDIA (84-85) • AVIVA LIFE INSURANCE (86-88) 5. RESEARCH METHEDOLOGY (89) 6. ANALYSIS AND INTERPRETATION (90-93) 7. SWOT ANALYSIS (94-96) 8. CONCLUSION (97-98) 9. RECOMMENDATION (99) 10. LIMITATIONS (100) 11. BIBLOGRAPHY (101) 5
    • zzzzzzzzz 6 COMPANY PROFILE BAJAJ GROUP Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the largest manufacturer of two-wheelers and three-wheelers in India and one of the largest in the world. .A household name in India, Bajaj Auto has a strong brand image & brand loyalty synonymous with quality & customer focus. A STRONG INDIAN BRAND- HAMARA BAJAJ  21 million+ vehicles, one of the largest 2 & 3 wheeler manufacturers in the world on the roads across the globe.  Managing funds of over Rs 4000 cr.  Bajaj Auto finance one of the largest auto finance Cos. in India.  Rs. 4,744 Cr. Turnover & Profits of 538 Cr. in 2002-03. It has joined hands with Allianz to provide the Indian consumers with a distinct option in terms of life insurance products 6
    • zzzzzzzzz 7 ALLIANZ GROUP Allianz Group is one of the world's leading insurers and financial services providers. Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost 174,000 employees. At the top of the international group is the holding company, Allianz AG, with its head office in Munich. Allianz Group provides its more than 60 million customers worldwide with a comprehensive range of services in the areas of:  Property and Casualty Insurance,  Life and Health Insurance,  Asset Management and Banking. ALLIANZ AS- A GLOBAL FINANCIAL POWERHOUSE  Worldwide 2nd by Gross Written Premiums - Rs.4, 46,654 cr.  3rd largest Assets Under Management (AUM) & largest amongst Insurance cos. - AUM of Rs.51, 96,959 cr.  12th largest corporation in the world  49.8 % of global business from Life Insurance  Established in 1890, 110 yrs of Insurance expertise 70 countries, 173,750 employees worldwide SHARED VISION 7
    • zzzzzzzzz 8 A household name in India teams up with a global conglomerate... Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the largest manufacturer of two-wheelers and three-wheelers in India and one of the largest in the world. A household name in India, Bajaj Auto has a strong brand image & brand loyalty synonymous with quality & customer focus. With over 15,000 employees, the company is a Rs. 4000 crore auto giant, is the largest 2/3-wheeler manufacturer in India and the 4th largest in the world. AAA rated by Crisil, Bajaj Auto has been in operation for over 55 years. It has joined hands with Allianz to provide the Indian consumers with a distinct option in terms of life Insurance products As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the following to offer –  Financial strength and stability to support the Insurance Business.  A strong brand-equity.  A good market reputation as a world-class organization.  An extensive distribution network.  Adequate experience of running a large organization.  A 10 million strong base of retail customers using Bajaj products.  Advanced Information Technology in extensive use.  Experience in the financial services industry through Bajaj Auto Finance Ltd 8
    • zzzzzzzzz 9 INDIAN OPERATIONS Growing at a breakneck pace with a strong pan Indian presence Bajaj Allianz has emerged as a strong player in India... Bajaj Allianz Life Insurance Company Limited is a joint venture between two leading conglomerates Allianz AG and Bajaj Auto Limited. Characterized by global presence with a local focus and driven by customer orientation to establish high earnings potential and financial strength, Bajaj Allianz Life Insurance Co. Ltd. was incorporated on 12th March 2001. The company received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) No 116 on 3rd August 2001 to conduct Life Insurance business in India. Bajaj Allianz- THE PRESENT  Product tailored to suit your needs  Decentralized organization structure for faster response  Wide reach to serve you better – a nationwide network of 700 + branches  Specialized departments for Banc assurance, Corporate Agency and Group Business  Well networked Customer Care Centers (CCCs) with state of art IT systems  Highest standard of customer service & simplified claims process in the industry  Website to provide all assistance and information on products and services, online buying and online renewals.  strong tele-marketing and Direct marketing team 9
    • zzzzzzzzz 10  Swift and easy claim settlement process Tie Ups with Banks Pioneers of Banc assurance in India...Having pioneered the phenomenon, Banc assurance is one our core business strategies. Two of our strong Banc assurance tie-ups are: • Standard Chartered Bank • Syndicate Bank Company has developed a range of life insurance products exclusively for our Banc assurance partners. Also, our products are customized to suit specific needs of banks. FOCUSSED SALES NETWORK 10
    • zzzzzzzzz 11 WHY BAJAJ ALLIANZ Bajaj Allianz Life Insurance Company Limited is a union between Allianz SE, the world’s leading insurer and Bajaj Auto, one of India’s most respected names. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion Euros (over Rs. 55,00,000 crores). At Bajaj Allianz, we realize that customer seek an insurer he can trust his hard earned money with. Allianz SE has more than 110 years of financial experience in over 70 countries and Bajaj Auto, trusted for over 55 years in the Indian market, are committed to offering people financial solutions that provide all the security customer need for his family and himself. At Bajaj Allianz, customer delight is our guiding principle. Ensuring world class solutions by offering them customized products with transparent benefits supported by the best technology is their business philosophy. 11
    • zzzzzzzzz 12 PRODUCTS Individual plans Protector A mortgage reducing term plan This is the perfect plan to protect the family from the repayment liability of outstanding loans, in the unfortunate case of death of the loanee. There is also an option to cover the co- applicant of the loan at a very nominal cost under this plan... Child gain Children’s policy Right from providing for your child's education to securing a bright future, this plan is tailor- made to suit your child's needs... Cash gain Money Back Plan This is the only money back plan that offers quadruple protection, going upto 4 times the basic sum assured, and a family income benefit... Swarna Vishranti Retirement plan In addition to life insurance and attractive tax benefits, this plan enables you to make adequate provisions for your years after retirement as well... Invest gain An Endowment Plan This savings plan combines high protection (up to quadruple cover) with a unique family income benefit... Term Plan With Return -Of-Premium 12
    • zzzzzzzzz 13 An economic way of providing life cover, this plan also ensures the return of all premiums at the time of maturity... Life Time Care Whole Life Plan This whole life plan provides survival benefits at the age of 80 thereby making sure you are financially secure at the time when you need it the most… Keyman Insurance A Promising Business Opportunity Keyman Insurance provides you with the unique opportunity to protect your business against the unfortunate loss of key people, while giving you valuable tax advantage and a lovely tool to help employee loyalty too... New Unit Gain Plus The thumb rule for buying insurance is that your insurance needs are minimal in your early earning years, increase with added responsibilities (Marriage, children, loans etc.) and taper off by the time you retire. It is difficult to find a single insurance plan that can take care of all your changing requirements in life – additional protection, more money to invest, sudden requirement of cash or a steady post-retirement income... Additional Rider Benefits For Unit Linked Product Bajaj Allianz Additional Benefits – Additional protection for you and your family available with Unit Gain Plus ... New Unit Gain Easy Pension Plan Unit Linked Retirement Plan Without Life Cover Bajaj Allianz New UnitGain Easy Pension Plus, is a plan that helps you take control of your future and ensure a retirement you can look forward to. This is a regular premium investment linked deferred annuity policy. Available as: New UnitGain Easy Pension Regular Premium & New UnitGain Easy Pension Single Premium. 13
    • zzzzzzzzz 14 Swarna Raksha I A fixed annuity for life will be payable, and on death of the annuitant, the nominee will be entitled to receive an amount that is equal to the lumpsum used to purchase the annuity. Mahila Gain Rider The unique plan that takes care of you and your loved ones and provides benefits like • Critical Illness Benefit • Reconstructive Surgery Benefit for Breast(s) due to Breast Cancer • Congenital Disability Benefit • Complications of Pregnancy Benefit. Health Care This is a three-year health insurance plan, providing comprehensive health cover with life insurance benefit. You can choose the amount of cover for each benefit separately in multiples of the minimum cover amount, subject to a maximum multiple of 10. New Unit Gain Premier SP • Upfront Allocation of 105% of single premium on day 1 • Flexi maturity after 6years New Unit Gain Super • High Allocation • Guaranteed life cover New Family Gain • The only Unitlinked insurance plan with ethical equity fund. • Suits religious investment guidelines as well. Save Care Economy-SP 14
    • zzzzzzzzz 15 • An ideal plan for a one-time lump sum investment that provides for savings with high risk-cover. • An investment that provides financial security and liquidity. An ideal plan for a one-time lump sum investment that provides for savings with high risk-cover. This Single Premium investment plan for 10 years is also participates in the profits of the company. New Unit Gain Plus SP • A single premium plan with maxx allocations • Choice of 4 investment funds and 3 free switches allowed each year • Partial and Full withdrawls after 3 years Samraksha • Single premium Term Assurance • Convenient terms of 5 & 10 years • Sum Assured options of Rs. 5000 and Rs. 10,000 • Minimum & maximum entry age is 18 & 45 respectively • Surrender Value – None & Maturity Value – None 15
    • zzzzzzzzz 16 Capital Unit Gain • Big Boss of all ULIPS • Capital UnitGain is a unit linked endowment regular premium plan that is deisgned to suit all your insurance & investment needs. Unit Gain Guarantee SP • High Allocation • Full or partial withdrawals are allowed anytime after 3 years New Risk Cover "Insure your Today with us to Ensure your family Smiles Tomorrow." • A non-participating traditional Term Assurance plan. • Higher insurance coverage at Low premium. • Regular/Single Premium payment options. Additional Benefits For Traditional Product Redesign your life insurance coverage to suit your nedds, providing total protection. Bajaj Allianz Care First • Guaranteed renewals upto age 65 without medicals • Finest treatment in leading hospitals • Generous hospital cover upto 7Lacs. • Same premium for 3 years. Alp Nivesh Yojana • Life cover and Maturity benefit equal to sum assured + vested bonus • Guaranteed Surrender Value • Avail additional benefits including Accidental Death Benefit & Accidental Permanent Total / Partial Disability Benefit 16
    • zzzzzzzzz 17 Bima Kavach Yojana • Return of premium on maturity • Guaranteed Surrender Value • Avail additional benefits including Accidental Death Benefit & Accidental Permanent Total / Partial Disability Benefit Jana Vikas Yojana • Life Cover • Maturity Benefit of 125%of the single premium payable on survival till the end of the policy term • Guaranteed Surrender Value Group plans Group Credit Shield Available for Employer - Employee Groups and Non Employer-Employee Groups Group Term Life Available for Employer - Employee Groups and Non Employer-Employee Groups Group Term Life Scheme in lieu of EDLI (Employees Deposit Linked Insurance) New Group Super Annuation Scheme Assure your Employees a financially secured, stable and independent post retirement life. 17
    • zzzzzzzzz 18 INTRODUCTION PLANNING FOR RETIREMENT After spending years working hard, setting up your home and raising a family, retirement should be one of the most rewarding chapters of your life. It should be the time to enjoy your independence. Spending time with children and grandchildren, traveling, pursuing a hobby, embarking on a new vocation. However, for too many people, the uncertainty of their retirement income clouds this sunny picture. Even though you have planned ahead and saved, will it be enough to last a lifetime? Is there some way your savings could provide a constant source of income that would ensure peace of mind? Today, thanks to a healthier life style and advances in medicine, the average Indian lives longer. A person, who is 60 plus today, can hope to live at least till the age of 75. A person who is 40 plus today can hope to live at least till the age of 80. That means that we need to plan for at least 20 to 30 years of retired life. NEED OF INSURANCE AFTER RETIREMENT Retirement does not necessarily mean the end to your need for life insurance. It only implies a change in the type of insurance plan you need. Naturally, you'd want to ensure the continuation of the same lifestyle for you and your spouse. However, as with any other major life stage change, you should re-evaluate your coverage to ensure its adequacy. If you are married, it is best for you to select a "Joint and Survivor option" annuity which pays benefits as long as either you or your spouse is alive. However if you are single, a "single life option" annuity is best for you. In the case of a "Single Life" option, benefits continue for as long as the benefit recipient lives, whether the recipient lives to age 68 or 108. Finally, if you want to leave behind something for your beneficiaries, you could choose a "Return of Premium" option in an annuity. 18
    • zzzzzzzzz 19 MONEY TO BE SET ASIDE FOR RETIREMENT You, and you, alone know how much retirement income you will need, to live comfortably. To gain a better understanding of the need to plan ahead, you could start by assessing all aspects of your current and anticipated financial needs. Begin by answering the following questions: • How long do you have to save that amount before retirement? • Where can you invest your retirement money? • How much risk are you willing to take on your investments? • Do pay special attention to the first question. Many people who are currently employed, assume the answer to that question is zero, because their retirement money will come from the employer's pension plan. Unfortunately, this monetary stream may not provide a sufficient retirement income. To ensure a comfortable retired life, you would be wise to invest money into additional avenues - like life insurance. To calculate your likely monetary requirements during retirement, use our Retirement Calculator that will give you an intelligent estimate. However, as you get closer to retirement, you will need to re-evaluate your needs and adjust accordingly to meet your goals. ANNUITIES An annuity gives you a fixed sum of money, at periodic intervals, for the rest of your life. Adding a tax deferred investment, like an annuity, to your retirement plan may help you realize your retirement dreams. Besides giving your savings the power of tax deferred compounding (in case of deferred annuity), you are also in control of when you begin receiving payments. They also provide a number of benefits that other instruments don't. Some of these include: Lifetime Income: If outliving your savings is a concern, an Annuity could be the solution. You can arrange to receive a steady stream of periodic payments, for the rest of your life. Only Annuities provide the retirement income options that can protect you from outliving your assets. 19
    • zzzzzzzzz 20 Competitive Interest Rates: Annuities can offer competitive interest rates, as well as investment flexibility. With some Annuities, you can "lock-in" a guaranteed interest rate for a specified period of time. To maintain your purchasing power, your assets need to grow equal to or faster than, the inflation rate. Even if inflation averages just 3% per year, your purchasing power may be cut in half in almost 20 years. Leverage the Power of Tax Deferral: A Deferred Annuity allows you to accumulate money for retirement on a tax-deferred basis. You put money in, and over time it earns interest and multiplies. Deferred refers to the postponement of the payout - the steady payments to you start later, usually at retirement. With deferred annuities, there are no taxes on earnings as well. Invest in an annuity now and defer the income receipts till you retire - an effective retirement strategy. Guaranteed Death Benefit: • Level Term Assurance. TAX BENEFITS Premiums paid under this Plan will be eligible for If you were to die prematurely, would your spouse have enough money to continue the lifestyle that he/she has become accustomed to? Annuities offer Joint or Survivor Option, which ensures that the same income stream continues for your spouse. Will your heirs be able to meet the final expenses? Planning to provide for the needs of the family after your death is essential? Annuities offer the option of a guaranteed death benefit, which passes to your named beneficiary. 20
    • zzzzzzzzz 21 ANNUITY OR NOT Annuities are widely used to augment / add to retirement incomes. However, we recommend that you do not blindly go for them. Annuities generally work well for people who meet the following criteria: • You are afraid you may outlive your savings • You are investing money you will not need for the next 10-15 years. That's about the time it will take to get the maximum benefits from tax rules (The only exception to this rule, is if you are about to retire and want to put a chunk of money into an immediate annuity, which will provide you with fixed, guaranteed monthly income right away.) • You have received a windfall lately: a bonus, an inheritance or any other lump sum that you want to invest for your future. • Annuities are an ideal way to invest large sums of money received all at once • Your current tax bracket is very high and it would reduce later due to retirement. As the Annuity's gains are tax deferred, your entire savings work and grow for you • You are nearing retirement age and looking for a product that will pay you a guaranteed income for life ANNUITY MEANING The word annuity implies periodic payments. When you buy an annuity, the company promises to pay you a periodic sum of money, for a specified period of time. An Immediate Annuity starts making the income payments within the first year of its purchase. A Deferred Annuity will start making the payments at a pre-determined future date, as agreed between the buyer of the Policy and the company. Immediate Annuity An Immediate Annuity starts making the periodic income payments within the very first year of its purchase. The annual amount received as annuity payment from ICICI Prudential is dependent on the purchase price of the annuity and the buyer's life expectancy. The annual amount receivable through the annuity can be varied by 21
    • zzzzzzzzz 22 adjusting the purchase price of the annuity. The Joint Life, Last Survivor Annuity also returns the purchase price of the annuity to a designated nominee. Deferred Annuity A Deferred Annuity is one where the payout phase begins after a stipulated number of years. Either multiple contributions or a single lump sum contribution can be made towards it. A Deferred Annuity has two phases: the Accumulation Phase and the Payout Phase. Accumulation Phase: The amount accumulates on a compounded basis, till the Buyer decides to take income from it. If the Buyer dies, a regular income stream is automatically provided to the beneficiaries. Payout Phase: This begins when the Buyer starts making periodical withdrawals from the accumulated sum. The Buyer may make partial withdrawals or convert the entire accumulated sum to a stream of income payments ANNUITY PAYOUT OPTIONS An Annuity can pay out incomes in monthly, quarterly, semi-annual or annual installments. You can design your Annuity to receive income of a specified amount over a specified period of time. The following income options are widely used - Return of Purchase Price - Income payments are guaranteed for the life of the Annuitant. On the demise of the Annuitant, the Beneficiary receives the original purchase price as a lump sum. Annuity certain for chosen period and Life Annuity thereafter - Income payments are guaranteed for a specific number of years (5, 10 or 15 years). Additionally, the payments continue beyond the "period certain" for as long as the Annuitant lives. 22
    • zzzzzzzzz 23 Joint Life Last Survivor - This option is based on the lives of two people. The income payments continue till the demise of both the Annuitants. The plan can be structured so that - • On the demise of one of the Annuitants, the payments continue for the same amount or for a lesser amount. • On the demise of both the Annuitants, the original purchase price is given to the Beneficiary as a lump sum. THE IMPACT OF INFLATION ON YOUR RETIREMENT SAVINGS A hundred rupees today doesn't buy what it used to ten years back. How much less will your money be worth when you are ready to cash out at retirement? One widely used measurement for projecting inflation rates is the Consumer Price Index (CPI). The CPI is the representative cost of a "basket of goods". The actual price of the basket of goods is not that important. What is critical is the amount of change, specifically the 12 month change, stated as a percentage. This percentage change is known as the rate of inflation. Determining Your Future Buying Power To plan an adequate income stream for your retirement, we should apply the expected annual CPI to your planned annuity income. This will determine just how much buying power your retirement income will have. The procedure is as follows: First, estimate how much annual income you will need to live the lifestyle you want, in today's currency. Second, multiply this amount by one plus the annual rate of inflation. For example, if you think you will need Rs. 200,000 a year and the expected annual rate of inflation is 5%: Rs.200, 000 x (1 + 0.05) = 210,000 You will actually need Rs.210, 000 to cover your expenses after a year - inclusive of the cost of rising inflation. 23
    • zzzzzzzzz 24 Repeat the calculation, using your new total, for every year you plan to wait before drawing on your savings at retirement. The results may surprise you. For example, the effects of 10 years of inflation means you will need Rs. 255,256 (approx) to meet those same expenses! Thus, you need to consider the effect of inflation on your expected annuity income when planning for retirement. RETIREMENT PLANS Most of you picture yourselves enjoying the fruits of labor after retirement, going on your dream vacation, or helping your children's career take wing. But do you realize that financing all this will most likely depend partly on your personal savings? Because personal savings and investments represent a significant source of retirement income for many people, you can never save too much. Currently, you are at a stage where you are juggling many roles, as nurturing parents, dutiful caregivers to elders, supportive life partners, while trying to maintain a career. It is too easy to get carried away handling and solving the day-to-day problems to not look into your retirement needs. It may also seem too far away to be of concern. But a look at the issues below will make the need for some strategic planning at this stage amply clear. Today, thanks to a healthier lifestyle and advances in medicine, the average Indian lives longer. This makes the challenge of accumulating enough money for retirement even more difficult, since it may have to last longer. Also, with the falling interest rate scenario and the rising costs of medical expenses retirement mean monetary uncertainty for most of us. More so, because there is also the ever-persistent evil of inflation, which erodes your purchasing power. The graph below illustrates how much Rupees will 10,000/- amount to after some years: Therefore, the message is simple - no matter whether you are 30 or 50, you should start planning early to have a healthy retirement kitty. As can be seen the cost of delaying is high. Situation A is when you are saving Rs 10000 annually from the age of 25 to 34 years and Situation B is when you save the same annual amount from the age of 35 to 59 years. As can be seen in the example, even after investing your money for a 2.5 times longer duration, the maturity value in 24
    • zzzzzzzzz 25 the second case is much lesser (the figures are based on a hypothetical interest rate of 10%). The longer your money is allowed to grow at a compounded rate, the more dramatic will the difference be eventually. Therefore, the message is simple - Put Time On Your Side and Start Early. W/out Sec80CCC (1) Benefit With Sec80CCC (1) Benefit Details Amount Details Amount 1 Income 300000 Income 300000 2 Tax Deductible Exp. 100000 Tax Deductible Exp. 110000 3 Taxable Income (1-2) 200000 Taxable Income (1-2) 190000 4 Taxes Payable 35700 Taxes Payable 32550 5 Investment in Sec88 20000 Investment in Sec88 20000 6 Tax Rebate u/s 88 4000 Tax Rebate u/s 88 4000 7 Net Taxes (4-6) 31700 Net Taxes (4-6) 28550 Assumption of an investment of RS10,000 u/s 80CCC(1) As the chart indicates, the powerful combination of compound interest plus tax deferred earnings, plus no tax on maturity proceeds, can be one of your strongest allies, when it comes to accumulating wealth, for your retirement or other long term financial goals. 25
    • zzzzzzzzz 26 POWER TO PLAN YOUR RETIREMENT, THE WAY YOU WANT YOUR OBJECTIVE OF RETIREMENT PLANNING: • Maximize the value of your investments to get more pensions, when you retire. • Beat the effect of inflation over the long-term, enjoy real appreciation. Value of your invest ments that give you This is where you are now- invest This is where you want to be- for your retirement kitty Peaceful Retirement Years. Your Objectiv e- Maximiz e this This is when you retire Linked Pensions provide you the power to invest the way you want- so you have the opportunity to maximize your returns. 26
    • zzzzzzzzz 27 Options to maximize your returns Why the Market-Linked Pension Plan is a better way to accumulate? Sustained regular investments over a long period of investments, because of the Rupee-Cost Averaging Effect.* Long-Term Combination of Appreciatio Cap. n of your Appreciation investment with steady returns Reasonable and steady returns OTHER INVESTMENT FLEXIBILITIES Flexibility to Top-Up on your investments just at a cost of 1%- Power in your hands to direct your windfall/Lump sum gains anytime for growing your retirement kitty. Flexibility to Switch Between your Investments Options- Based on your changing Life stage, your investment priorities change. We have made a flexibility to felicitate this change for you, so that you can change from one option of investment to other depending on your needs. 27
    • zzzzzzzzz 28 POWER TO CHOOSE PROTECTION ON YOU LIFE AND HEALTH, THE WAY YOU WANT TO Options to plan for your Retirement Pure Protection with Accumulation Accumulation purpose- No Purpose- With LifeCover and LifeCover and Health Riders Health Riders ZERO DEATH DEATH BENEFIT BENEFIT OPTION WITH RIDERS 28
    • zzzzzzzzz 29 POWER TO START YOUR PENSION, WHENEVER YOU WANT TO. What if you do not want your pension to start as opted by you originally? - You may find that you want to work for some more years. - You may want to accumulate in your pension for some more time. - And, above all you may want to start your pension whenever you wish, any day, any month. We understand your needs and hence we have the flexibility in our products that give you the power to start your pension whenever you wish to. You may wish to postpone it because: You want to accumulate for some more time. You may work for some more years. You may wish to take any benefits from the market movements. Your Original You have the flexibility of postpone the original date Vesting Date and start you pension whenever you wish 29
    • zzzzzzzzz 30 POWER TO GET YOUR PENSION, THE WAY YOU WANT TO If you think how you would receive your pension, we have so many options for you, just to fit in your requirements. We give you options such as to provide you with best of the solutions for your retirement. Options for Receiving Pension Annuity for whole of your Annuity guaranteed for life. 5/10/15 years with continuation after that till you survive. Annuity for whole of your life with the return of the purchase price to the nominee. Annuity for you and your spouse for the whole of life with the return of purchase price to the nominee. 30
    • zzzzzzzzz 31 INCREASING LIFE EXPECTANCY Population in India is expected to increase by 49% between 1991(Census) and 2016; the number of elderly people would increase by 107%. An amazing 113Mn by 2016, which would increase to a staggering 179Mn by 2026. You may be one of them!! A 60 year old person toady would on an average live till 75 years. 20 years from now a person aged 60 would live till 80 years. Wouldn’t we be facing the same long retirement? Was the situation same with our grandfathers?? Perhaps not! The yesteryears!! Retirement Years What is looks like today?? LESSER NUMBER OF PRODUCTIVE YEARS How do we take care of these long years, if we do not plan from today?? 31
    • zzzzzzzzz 32 RISING INFLATION Wouldn’t you have ridiculed on somebody who ten years age would have said” Potatoes ten years from now would cost Rs10 /kg?” Today you may look back and say how correct he was!! Look at these 10 years ago Today % Increase Expected Cost after 10 years 1 Kg of Potato Rs 1.50 Rs 8.00 533% Rs43 1 Ltr. Of Petrol Rs17.00 Rs31.00 182% Rs57.00 1 Mum-Dli Train Ticket Rs350.00 Rs1750.00500% Rs8750.00 May Look ridiculo us Do you spend more while at “Work” or when at “Vacation”- Certainly on same as that “Vacation”!! Have you provided for your retirement, which is nothing but your vacation after your tiring Work life?? ENOUGH SAVINGS TO TAKE CARE OF THE INCREASING COSTS DURING YOUR VACATION I wish I had catalysts in my body that would have prepared medicines for me whenever I wanted. (Medical Costs) Which are the most common diseases that hit people in the old age- Arthritis, Asthma, and Diabetes? A look at the expected cost for these, when you retire would make you think twice. 32
    • zzzzzzzzz 33 Disease No. of visits to Cost in 1992 Cost in 2002 Projected Cost doctor per (Rs) (Rs) in 2012# month cost (Rs) Spondylitis Once in 3 2500 8000 25600 months Arthritis Once in 2 250 850 2890 months Asthma Month cost45 175 600 2060 days Diabetes Once in a 225 750 2500 month ADVANCED MEDICAL SCIENCE HAS BECOME VERY EXPENSIVE A simple blood test today costs anything between Rs75-Rs100. X-Ray ranges to even more, something like Rs200-Rs300. These basic costs may quadruple in the next 20 years and would be far more expensive when you require them even more, at your old age. Research reveals that medical expenses are 40% of the expenses in old age, with these increasing prices, do you have enough provision to take care of your health properly at old age. As if Inflation was not enough: Finally, from 2005 onwards, the government proposes to decontrol the pricing of drugs under the deregulation of the price control regime. Costs, which were controlled till now, will skyrocket. In case we do not have the provision, certainly we have to wish for the catalysts. 33
    • zzzzzzzzz 34 DELAY YOUR SAVINGS AND THE COST THAT YOU WOULD INCUR IS UNIMAGINABLE(THE MAGIC OF COMPOUNDING) If You Invest Early If you invest late Rs 6,78,803 Rs 11, 32,832 R Rs 3,00,000 eti R re eti m re In en m ve t Rs 3,00,000 en st Sa t m vi Sa en ng vi ts s ng s When you invest Rs10, 000 When you invest Rs25,000 annually for 30 year The annually In for a 15 year period( from age 31 to 60 Choice period(from ve 46-60), the years), the magic of is all value you receive is far st compounding lets your yours- lower. m money grow to a larger Be Cost of delaying is high!! en amount Smart in ts Early investments make your Plannin g or pay the high cost of RETIREMENT PLANNING INCREASING LIFE EXPECTANCY SOME FACTS: 34
    • zzzzzzzzz 35 • Populations worldwide are ageing. In India, while the total population is expected to rise by 49% between 1991(Census) and 2016, the number of elderly person is expected to increase by 107%, to nearly 113 Mn. In other words, the share of the aged in the population would be 9%. It would still rise further and would stand at 179 Mn by 2026- or 13.3% of the population. • Demographics suggest that while today in India, Males and females of 60 years of age are going to live till 75 years, a person who is 40 as of today and would be 60 by 2022 would live for 20 years, post attaining the age of 60 years. What these facts reflect is that with the increasing time, their old age would increase. Not only the number of old age people would increase but also the number of years they spend in. The other important factor is that the number of working years is constantly reducing, with the increased competition and the urbanization in the country. In such a scenario, the situation looks like as this: 35
    • zzzzzzzzz 36 YESTERYEARS Retirement Years Working Years What it looks like today? Retirement Years Working Years We are increasingly getting left with lesser number of productive years to take care of a longer and longer retirement years. PROTECTION OF LIFESTYLES How the Cost of Living has been increasing? Ten years Ago Today % increase 1 Kg of Potato Rs 1.50 Rs 8. 00 533% 1 Litre of Petrol Rs 17 Rs 31 182% 1 Cinema Ticket Rs 20 Rs 80 400% 1 Mumbai-Delhi Train Rs350 Rs1750 500% Ticket Looking at the above list of items which would be the one that you would not use after you have retired. Perhaps you would use all of them. If these keep on growing at the same rate, a 10 year hence scenario would look like this. Today % increase 10 year hence 1 Kg of Potato Rs 8. 00 533% 43 36
    • zzzzzzzzz 37 1 Litre of Petrol Rs 31 182% 57 1 Cinema Ticket Rs 80 400% 320 1 Mumbai-Delhi Rs1750 500% 8750 What we have not considered here is the medical cost, which is a major expense in the post-retirement phase. Isn’t it frightening to imagine what would be the cost of the above items 20 years from now?? Now, ask a person- when would he spend more money –on a vacation or while at work. More often that not you would get an answer “VACATION”. What is retirement- it is this vacation after a long stint of working years. In this period one would like to maintain the present level of lifestyle, if not better. 37
    • zzzzzzzzz 38 EXAMPLE OF AN AVERAGE FAMILY SPENDS OF AN INDIVIDUAL TODAY Household Expenses: Rs6, 000 per month. Expenses on Children: Rs3, 000 per month. Medical Expenses: Rs5, 00 per month. Assuming this individual would work for the next 20 years and then retire and also assuming that the household expenses would reduce to 60% of the present level (because the children would be independent), the cost comparisons would like as follows: Expenses Present After 20 years* Household 6000 9552 Children 3000 0 Medical Expense 500 1526 Total 9500 11078 Even with the household expenses reduced by 40% and no expenses on the children post-retirement, the cost of living will increase by 15%. Therefore it is important that we provide enough to take care of these increasing expenses. · The costs have been worked out assuming an increase in the medical costs by 15% and an overall cost inflation of 5% 38
    • zzzzzzzzz 39 The Compounding Effect of Money How many times one thinks of retirement planning at an early stage in the life. The attitude generally exhibited is “I AM TOO YOUNG TO PLAN FOR RETIREMENT”. Example, assuming a retirement age of 55 years and the amount of money required then, to take care of the retirement is Rs10, 00, 000. Now let us see what would be the effect of planning your retirement from the age of 25, 30 and 35 years. One would require to invest nearly Rs 24, 000 per annum to get the same amount at retirement, if he starts the planning at 35 years as compared to Rs 10, 600 if he chooses to start the planning at age of 25 years of age. A successful planning would be when we spread our responsibilities over a longer period of time to make it less cumbersome rather than making it short and difficult. Protection for Spouse/ Dependents While doing a research of the needs of the people in the various life stages, one thing that was strongly opined by people in the age group of 45 years and more was the “financial independence of them and their spouses during their retirement period”. With the breaking up of the traditional family system in the present era and people living in nuclear families, the worry for the provision for the old age is a specific concern. It is important that you provide for the financial independence of you and your spouse post your retirement 39
    • zzzzzzzzz 40 OBJECTIVES OF THE RESEARCH STUDY The purpose of the project in the first place was to study the various pension plans provided by the different insurance companies. Further to study and compare the plans and bring out differences. Also to make a ready-reckoner of the same for the advisors and unit managers. The main objectives of the research study were as follows – • To gain an insight into the entire gamut of the pension market. • This comparative study would help in assessing the product features of other pension providers and their strategy towards creating customers for the product This study would also helped in knowing the potential market for the product and also how to have a competitive edge over the other players in the market by stressing on to the key areas of the product. METHODOLOGY ADOPTED  The first step was to study all the insurance products being offered by BAJAJ ALLIANZ LIFE INSURANCE CO. LTD.  Then data of other pension players was collected by personally visiting them and then probing their pension plans.  The next step was to draw results from the analysis of the information collected regarding the features of the product in the market.  A comparison was then made between the features of the product in the market and that offered by BAJAJ ALLIANZ LIFE INSURANCE CO. LTD.  After finding out the investors details, this data was then tabulated, analyzed and deductions were then made so as to know the investors psyche and the products and features which a investor looks for in a product. 40
    • zzzzzzzzz 41 RESEARCH DESIGN A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The research design id the conceptual structure within which research is conducted; it constitutes the blue print for the collection, measurement and analysis of data. Types of Research Design 1. Exploratory Research Design- Also called formulative research study; the main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypotheses from an operational point of view. 2. Descriptive and diagnostic Research Design- Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group, whereas diagnostic research studies determine the frequency with which something occurs or its association with something else. 3. Hypothesis-testing Research Design- These studies are those where the researcher tests the hypotheses of causal relationships between variables. In my study, I have used “Exploratory Research Design”. SAMPLING Sampling may be defined as the selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made.. In other words, it is the process of obtaining information about an entire population by examining only a part of it. 41
    • zzzzzzzzz 42 Types of Sampling 1. Probability Sampling: - Also known as “random sampling” or “chance sampling”. Under this sampling design, every item of the universe has an equal chance of inclusion in the sample. 2. Non-Probability Sampling: - It is that sampling procedure which does not afford any basis for estimating the probability that each item in the population has of being included in the sample. In my study, I have taken a sample size of 250 and 50 respectively for my two surveys. DATA ANALYSIS Data is mainly of two types: 1. Primary data: - are those, which are collected a fresh and for the first time, and thus happen to be original in character. 2. Secondary Data: - are those which, have already been collected by someone else and which have already been passed through statistical process. In my study, data has been collected through questionnaires hence it is primary data. 42
    • zzzzzzzzz 43 QUESTIONNAIRE FOR INSURANCE SURVEY Name- Age- Occupation- Address- Phone no.- Q.1- Do u know that govt. of india has privatized life insurance industry? (a)yes (b)no Q.2- How many life insurance companies are in india? (a)17 (b)12 (c) 10 (d)can,t say Q.3- Do u know abt. BAJAJ ALLIANZ? (a)yes (b)no Q.4- How do u know abt the BAJAJ ALLIANZ ? (a)through media advertisements (b)through representative of BAJAJ ALLIANZ (c)through articles (d)other channels Q.5- Which company has the punch line “ (a) max new york life insurance (b)birla sunlife (c) icici pru (d)BAJAJ ALLLIANZ Q.6- Have u taken any life insurance cover for urself or for ur family? (a)yes (b)no Q.7- The no. of policies u have at this time (a) 1-5 (b)5-10 (c) more than that Q.8-What is the importance of insurance in your life? (a) safety (b)investment (c)tax saving (d)others 43
    • zzzzzzzzz 44 Q.9- How do u rate BAJAJ ALLIANZ vis-à-vis services offered? (a) excellent (b)good (c)average (d)poor Q.10-Do u think BAJAJ ALLIANZ needs more publicity in life insurance sector? (a)yes (b)no Q.11- Which media according to you would put more impact on you? (a)television (b)radio (c)newspaper (d)BAJAJ ALLIANZ representative Q.12- Would u like to know more about any products and services of BAJAJ ALLIANZ? (a)yes (b)no Q.13- Do u know about the CAPITAL UNIT GAIN PLAN ( CUG) of BAJAJ ALLIANZ? (a) yes (b)no 44
    • zzzzzzzzz 45 DATA ANALYSIS INSURANCE COAMPANIES In all there was 10 insurance companies' pension plans were studied, including BAJAJ ALLIANZ LIFE INSURANCE CO. LTD. COLLECTION OF DATA S. No. INSURANCE COMPANY 1. BAJAJ ALLIANZ LIFE INSURANCE 2. ICICI PRUDENTIAL LIFE INSURANCE 3. HDFC STANDARD LIFE INSURANCE 4. OM KATAK MAHINDRA LIFE INSURANCE 5. MAX NEW YORK LIFE INSURANCE 6. ING VYSYA LIFE INSURANCE 7. TATA AIG LIFE INSURANCE 8. LIFE INSURANCE CORPORATION 9. STATE BANK OF INDIA - LIFE (SBI LIFE) 10. AVIVA LIFE INSURANCE 45
    • zzzzzzzzz 46 APPENDICES PENSION PLANS BAJAJ ALLIANZ LIFE INSURANCE BAJAJ ALLIANZ represents pension plans that combine the best of investment and insurance. NEW UNIT GAIN EASY PENSION PLAN RP IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. ‘Bajaj Allianz New UnitGain Easy Pension Plus RP’ Plan With Bajaj Allianz New UnitGain Easy Pension Plus RP you can take control of your future and ensure a retirement you can look forward to. Early retirement from work is every ones dream; you want your saving and investment to grow fast so you don’t have to work for money anymore and enjoy every moment of being with your loved one’s. The New UnitGain Easy Pension Plus RP is a retirement plan that helps you retire with laughter lines. This unitlinked pension plan gives you the advantage of investing in securities making your savings grow faster so you can retire earlier. What are the benefits available? The plan works in two parts – the deferment period and the annuity period. During the deferment period, the plan builds up the funds. The deferment period ends at the 46
    • zzzzzzzzz 47 vesting date. You are free to choose your age of retirement (vesting date) between 45 and 70 years. After the vesting date, the annuity payments begin. The benefits on Vesting Date (the date you choose to retire) • The Fund Value as on the vesting date will be used to purchase an immediate annuity, at rates prevailing at that point of time. • Option to take lump sum: You have the option to take up to 1/3rd of the Fund Value as a lump sum. This amount would be tax free in your hand, as per current tax laws. The balance amount will be used to purchase an immediate annuity. • Open Market Option: You have the option to purchase an immediate annuity from Bajaj Allianz or from any other life insurer as recognised by IRDA. If the immediate annuity is purchased from Bajaj Allianz, the amount available for purchase of the annuity will be marked up by 2%. Assurance – for your family In the unfortunate event of death during the deferment period, your spouse will have the option to take the Fund Value as a lump sum or purchase an annuity to get regular income for life. For the immediate annuity, your spouse will have the Open Market Option as well. The immediate annuity from Bajaj Allianz will be available only if the spouse is above 45. If age were below 45, the Fund Value would be paid out. Annuity options: Allianz Life insurance at the vesting date. The annuity products currently available are: • annuity for life • Annuity for life with 5 , 10, 15 or 20years certain payout • Annuity for Life with Return of Capital • Annuity for Life with joint life last survivor option You also have the open market option to purchase immediate annuity. The minimum instalment of annuity from Bajaj Allianz is Rs. 1000/-. The annuity frequency may be changed to make each instalment more than the minimum requirement. If it still below the minimum, the Fund Value may be paid in a lump sum, if permissible, subject to applicable tax laws. 47
    • zzzzzzzzz 48 Full Withdrawals Full withdrawal/Surrender is allowed (subject to Surrender Charge, if any) anytime after 3 years from commencement Important Details of the ‘Bajaj Allianz New UnitGain Easy Pension Plus RP ’ Plan Minimum Maximum Age at Entry 18 yrs 65 yrs Defement Period 5 yrs 40 yrs Age at Vesting 45 yrs 70yrs Minimum Premium Rs.10000 for yearly, Rs.5000 for halfyearly, Rs.2500 for quarterly, and Rs.1000 for monthly Tax Benefits Premiums paid will be eligible for tax deduction under Section 80C of the Income Tax Act. Charges under this plan • Policy Administration Charges will be Rs.50 per month per policy (charged monthly through cancellation of units) escalating at 5% per annum. • Fund Management Charge will be 1.75% p.a. of NAV for Equity Growth Pension Fund and Accelerator Mid-Cap Pension Fund, 1.25% p.a. of the NAV for Equity Index Pension Fund II, 0.95% p.a. of the NAV for Bond Pension Fund and 0.95% p.a. of NAV for Liquid Pension Fund. • Switching Charges: Three free switches would be allowed every year. Subsequent switches would be charged @ 5% of switch amount or Rs. 100, whichever is lower. • Allocation: A portion of the premium paid will be charged towards expenses in the initial years. Accordingly, the allocation to your fund will be will be as follows- 48
    • zzzzzzzzz 49 Annual premium size Premium payment due Premium payment due in in Policy Year 1 Policy Year 2 10,000-24,999 84% 98% 25,000-49,999 86% 98% 50,000- 99,999 88% 98% 100,000-499,999 90% 98% 500,000 and above 92% 98% • Surrender Charge If first three years regular premiums are not paid and the policy is lapsed, the Surrender Charge on regular premium unit value would be 100% of the first years annualised Allocated Premium. If first three years regular premiums have been paid in full, the scale of Surrender Charge applicable on regular premium unit value would be as follows: Policy year Surrender Charge 4 5% 5 2% 6 and above No Charge The Surrender Value would be payable after three policy years. Further, if first three years regular premiums have not been paid and the policy is lapsed, the Surrender Value, if any, would be payable at the expiry of the revival period or three policy years, whichever is later. No surrender charge will be applied in case of complete surrender of units in respect of Top Up Premium. Miscellaneous Charge: The miscellaneous charge would be charged at the rate of Rs.100/- per transaction in respect of reinstatement, alteration of premium mode, increase in regular premium or issuance of copy of policy document. Revision of charges After taking due approval from the Insurance Regulatory and Development Authority, the Company reserves the right to change the following charges: • Fund Management Charge up to a maximum of 2.75% p.a. of the NAV for the Equity Growth Pension Fund and Accelerator Mid-Cap Pension Fund, 2.25% p.a. 49
    • zzzzzzzzz 50 for the Equity Index Pension Fund II and 1.75% p.a. for the Bond Pension Fund and Liquid Pension Fund. • Switching charge upto a maximum of Rs.200 per switch or 5% of the switching amount, whichever is lower. • Miscellaneous charge upto a maximum of Rs.200/- per transaction • If the Proposer/Life Assured does not agree with the charges, he/she will be allowed to exit the plan at the prevailing price of units. NEW UNIT GAIN EASY PENSION PLAN SP IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER ‘Bajaj Allianz New UnitGain Easy Pension Plus SP’ Plan With Bajaj Allianz New UnitGain Easy Pension Plus SP you can take control of your future and ensure a retirement you can look forward to. This is a Single Premium units existing at the valuation date (before any units are redeemed) , gives the unit linked deferred annuity plan, which will help you plan for your retirement and ensure price of the fund under consideration. This is applicable when the company is required Flexibility – to manage your investments to sell assets to redeem units at the valuation date that your investment grows well. You have been working hard. you’re going to retire one day. How do you see your retirement? Traveling? Golfing? Turning a hobby in to a second career or volunteering for a noble causeor simply spending more time with your family. Post retirement, how you choose to spend your time is now up to you. Its also upto you to ensure your retirement income lasts as long as u do. The decisions u make about your money today should be flexible enough to accomdate your changing needs. Taking charge of your retirement begins with Bajaj Allianz New Unit Gain Pension Plus SP, a plan that ensures that your years ahead are golden years. KEY FEATURES OF THIS PLAN ARE- • Single premium plan 50
    • zzzzzzzzz 51 • Unlimited top-ups • Choice of 5 investment funds • Mortality charges are nil, enabling you to maximize your investment returns What are the benefits available? The plan works in two parts – the deferment period and the annuity period. During the deferment period, the plan builds up the funds. The deferment period ends at the vesting date. You are free to choose your age of retirement (vesting date) between 45 and 70 years. .. After the vesting date, the annuity payments begin. Benefits on Vesting Date (the date you choose to retire) • The Fund Value as on the vesting date will be used to purchase an immediate annuity, at rates prevailing at that point of time • Option to take lump sum: You have the option to take upto 1/3rd of the Fund Value as a lump sum. This amount would be tax free in your hand, as per current tax laws. The balance amount will be used to purchase an immediate annuity. • Open Market Option: You have the option to purchase an immediate annuity from Bajaj Allianz or from any other life insurer as recognised by IRDA. If the immediate annuity is purchased from Bajaj Allianz, the amount available for purchase of the annuity will be marked up by 2%. Assurance – for your family In the unfortunate event of death during the deferment period, your spouse will have the option to take the Fund Value as a lump sum or purchase an annuity to get regular income for life. For the immediate annuity, your spouse will have the Open Market Option as well. The immediate annuity from Bajaj Allianz will beavailable only if the spouse is above 45. If age were below 45, the Fund Value would be paid out. 51
    • zzzzzzzzz 52 Full Withdrawals Full withdrawal/Surrender of Fund Value, net of Surrender Charge, if any, is allowed anytime after 3 years from commencement. Annuity options You will be able to choose from all immediate annuity products offered by Bajaj Allianz Life insurance at the vesting date. The annuity products currently available are: • Annuity for Life • Annuity for Life with 5, 10, 15 or 20 years certain payout • Annuity for Life with Return of Capital • Annuity for life with Joint Life Last Survivor Option You also have the open market option to purchase immediate annuity. The minimum instalment of annuity from Bajaj Allianz is Rs. 1000/-. The annuity frequency may be changed to make each instalment more than the minimum requirement. If it still below the minimum, the Fund Value may be paid in a lump sum, if permissible, subject to applicable tax laws. IMPORTANT DETAILS OF THE ‘BAJAJ ALLIANZ NEW UNIT GAIN EASY PENSION PLAN SP’ PLAN Minimum Maximium Age at Entry 18 yrs 65yrs Defement Period 5yrs 40 yrs Age at Vesting 45 yrs 70yrs Single Premium Rs. 50000 No limit Top Up Premium Rs. 5000 No limit 52
    • zzzzzzzzz 53 Tax Benefits Contributions made will be eligible for tax deduction under Section 80C of the Income Tax Act. Charges Under the Plan Policy Administration charges will be Rs.50 per month per policy (charged monthly through cancellation of units) escalating at 5% per annum. The Company reserves the right to change the Policy Administration Charge at any time with prior approval from the IRDA. Fund Management charge will be 1.75% p.a. of the NAV for Equity Growth Pension and Accelerator Mid-Cap Pension Fund, 1.25% p.a. of the NAV for Equity IndexPension Fund II, 0.95% p.a. of the NAV for Bond Pension Fund and 0.95% p.a. of NAV for Liquid Pension Fund. Switching Charges: Three free switches would be allowed every year. Subsequent switches would be charged @ 5% of switch amount or Rs. 100, whichever is lower. Allocation: A portion of the premium paid will be charged towards expenses. Accordingly, the allocation of single premium and top ups would be 98%. Miscellaneous Charge: The miscellaneous charge would be charged at the rate of Rs.100/- per transaction in respect of issuance of copy of policy document. Revision of charges After taking due approval from the Insurance Regulatory and Development Authority, the Company reserves the right to change the following charges: • Fund Management Charge up to a maximum of 2.75% p.a. of the NAV for Equity Growth Pension Fund and Accelerator Mid-Cap Pension Fund, 2.25% p.a. for Equity Index Pension Fund II and 1.75% p.a. for Bond Pension Fund and Liquid Pension Fund. • Switching charge upto a maximum of Rs.200 per switch or 5% of the switching amount, whichever is lower. 53
    • zzzzzzzzz 54 • Miscellaneous charge upto a maximum of Rs.200/- per transaction. • If the Proposer/Life Assured does not agree with the charges, he/she will be allowed to exit the plan at the prevailing price of units. 54
    • zzzzzzzzz 55 ICICI PRUDENTIAL LIFE INSURANCE Lifetime Pension: A regular premium linked deferred pension plan that gives you the freedom to choose the amount of premium, and invest in market-linked funds, to generate potentially higher returns. Secure Plus Pension: A regular premium deferred pension plan that gives you the flexibility to choose between 3 levels of sum assured for the same level of total annual contribution. Life Link Pension: A single premium linked deferred pension plan that gives you the freedom to choose the amount of premium, and invest in market-linked funds, to generate potentially higher returns. Forever Life: A regular premium deferred pension plan that helps you save for your retirement while providing you with life insurance protection. LIFETIME PENSION DEFERRED PENSION PLAN A Linked Deferred Plan gives you the freedom to choose the amount of premium, and invest in market-linked funds, to generate potentially higher returns. A part of the premium paid is used to pay for the death benefit (if any) opted for by you and the rest would be invested in the plan of your choice. On the retirement date, the accumulated value of the units will be used to purchase an annuity - to provide you with regular income for life. 55
    • zzzzzzzzz 56 LIFE COVER BENEFIT In the unfortunate event of your death before retirement, your spouse has the option of receiving either the death benefit or the value of units as a lumpsum (whichever is higher), or get an annuity that would provide regular income for life. VESTING AGE You can choose a vesting date once you are 50 years of age. However, you have the option of postponing this vesting date till the age of 70 years. With this, you can take advantage of market movements. TOP-UPS Use your surplus funds to top-up your investment (minimum Rs 10,000) during the deferment period. LIFE COVER You choose the amount of life cover you require. You can also opt for a Zero Death Benefit. The amount, which you pay for the Death Benefit, depends on your chosen protection level. LIFE COVER - INCREASE/DECREASE In case you opt for a Death Benefit, you have the option of increasing or decreasing the cover during the deferment period. CHOOSING INVESTMENT PLAN You can choose between the Maximize (Growth), Protector (Income) or Balancer (Balanced) plans. You also have the power to switch between the plans, to suit your investment priorities. You are entitled to one free switch every year during the deferment period. 56
    • zzzzzzzzz 57 ELIGIBILITY You should be between 18 and 60 years of age. MINIMUM PREMIUM The minimum annual premium is Rs.10,000; half-yearly premium is Rs. 5,000 and monthly premium is Rs.834. TERM Minimum term is 10 years. SURRENDER This plan acquires a surrender value after full premiums for 3 policy years are paid. In case of complete withdrawal, a surrender value equivalent to the value of the units is paid. INITIAL CHARGES The initial administrative charges in the 1st year would be 20% of the premium, for premium amounts less than Rs.50,000. For premiums equal to or greater than Rs.50,000, the charges would be 18% of the premium. In case the Zero Death Benefit has been opted for, the charges would be 18% and 15% for the same premium bands. However, in all cases, charges wouldbe 7.5% in the 2nd year and 4% from 3rd year onwards. 57
    • zzzzzzzzz 58 ADMINISTRATIVE CHARGES Other charges would include annual administrative charges of 1.25% per annum of net assets for Protector (Income) and 1.25% per annum for Maximizer (Growth) and Balancer (Balanced) options. An annual investment charge of 0.25% per annum of net assets for Protector and 1% for Maximizer (Growth) and Balancer (Balanced) would also be charged. ANNUITY PAYMENT MODE Your accumulated value would start paying you regular income in the form of an annuity, at a frequency chosen by you. This income can be received monthly, quarterly, half-yearly or annually. SECUREPLUS PENSION DEFERRED PENSION PLAN Secure Plus Pension - a flexible regular premium deferred pension plan. CHOOSE - PROTECTION LEVELS Secure plus Pension provides you with three levels of sum assured, for the same amount of total annual contribution. You have the option of choosing between Basic, Standard and Enhanced levels of cover. How to calculate your cover as per the term you have chosen (Term - 5) x Premium = Basic cover (Term) x Premium = Standard cover (Term + 5) x Premium = Enhanced cover 58
    • zzzzzzzzz 59 ZERO DEATH BENEFIT OPTION Pension from Secure plus Pension gives you the opportunity to shift from one level of cover to another as per your changing requirement. Once you have decided to avail of the Zero Death Benefit option, you do not get the option to alter your cover again. In the unfortunate event of death, your spouse is protected by a lump sum amount, which is the sum assured plus the value accumulated in your policy. Additionally, your spouse can exercise the option to draw an amount. COMMUTATION The total accumulated value of the policy, including the declared bonuses, would be used as a purchase price to give you a pension of your choice. You have the option of taking up to 33.33% of the accumulated value as a lumpsum and begin a pension from the rest of the amount. ACCUMULATION OF FUNDS The invested premium and the declared bonus interest would be payable on death (along with the Sum Assured) or would be used as a purchase price at the time of vesting. However, at the time of payment due to death or at the time of vesting, if the value of the individual's investment account is more than the invested premium (along with the declared bonus interests) then the additional amount would also be payable on death or would be used as a purchase price at the time of vesting. The differential between declared bonus interest and earned rate would not be greater than 1%. VESTING AGE You can choose a vesting age between 50 and 75 years. You have the flexibility to postpone the vesting date from the originally chosen vesting date up to a maximum of 75 years of age. This option can be exercised only once, 6 months prior to vesting. ELIGIBILITY • With Life Cover: Any person between 18 and 60 years of age can apply. • Without Life Cover (Zero Death Benefit): Any person between 18 and 65 years of age can apply. 59
    • zzzzzzzzz 60 TERM Minimum term is 10 years. MINIMUM PREMIUM Minimum annual premium is Rs.10,000; half-yearly premium is Rs.5,000; and monthly premium is Rs.834. SURRENDER Secure plus Pension acquires a surrender value after premiums for three policy years are fully paid. The surrender value is the accumulated value of your policy, or its market value at the time of death or maturity, whichever is higher. Surrender value can be classified under two categories: a) Guaranteed b) Non-guaranteed. • Guaranteed surrender value will be 35% of all premiums paid - excluding the first year premium and all extra premiums and premiums for rider benefits. • On request, the company may provide non-guaranteed surrender values as specified from time-to-time. • The insurance protection ceases on surrender of the policy. ANNUITY PAYMENT OPTIONS Your accumulated value would start paying you regular income in the form of an annuity, at a frequency chosen by you. This income can be received monthly, quarterly, half-yearly or annually. GURANTEED ANNUITY PERIOD • You have the option of selecting a guaranteed annuity rate period of either 5 or 7 years. • The amount of annuity is fixed for a guaranteed annuity rate period and will be recalculated at intervals of every guaranteed period, based on the then prevailing annuity rates. • On commencement, and at the end of every guaranteed period, the amount of annuity payable for the next guaranteed number of years and the Residual Purchase Price (which will be available for calculation of the annuity rate at the end of the guaranteed annuity period), on survival, will be guaranteed 60
    • zzzzzzzzz 61 LIFE LINK PENSION PREMIUM Life Link Pension - a single premium linked deferred pension plan. DEFERRED PENSION PLAN A Linked Deferred Plan gives you the freedom to choose the amount of premium, and invest in market-linked funds, to generate potentially higher returns. A part of the premium paid is used to pay for the death benefit (if any) opted for by you and the rest would be invested in the plan of your choice. On the retirement date, the accumulated value of the units will be used to purchase an annuity - to provide you with regular income for life. LIFE COVER BENEFIT In the unfortunate event of your death before retirement, your spouse has the option of receiving either the death benefit or the value of units as a lump sum (whichever is higher), or get an annuity that would provide regular income for life. VESTING AGE You can choose a vesting date once you are 50 years of age. However, you have the option of postponing this vesting date till the age of 75 years. With this, you can take advantage of market movements. TOP-UPS Use your surplus funds to top-up your investment during the deferment period. The minimum top-up amount is Rs. 5,000. PROTECTION LEVEL You choose the amount of life cover you require. In this plan, the Death Benefit is 1.05 times the premium paid. You can also opt for a Zero Death Benefit. The amount, which you pay for the Death Benefit, depends on your chosen protection level. 61
    • zzzzzzzzz 62 CHOOSING INVESTMENT PLAN You can choose between the Maximize (Growth), Protector (Income) or Balancer (Balanced) plans. You also have the power to switch between the plans, to suit your investment priorities. You are entitled to one free switch every year during the deferment period. ELIGIBILITY You should be between 18 and 60 years of age. For Zero Death Benefit, any person between 18 and 65 can apply. The cover ceasing age is 60 years. MINIMUM PREMIUM Minimum premium in this plan is Rs. 50,000. TERM Minimum term of the product is 3 years. SURRENDER This plan acquires surrender value after 1 year from the start of the plan. In case of complete withdrawals, a surrender value equivalent to the value of the units is paid. INITIAL CHARGES For premiums between Rs.50, 000 and Rs.99, 999, the initial charges would be 4% of the premium. For premiums between Rs.1, 00,000 and Rs.4, 99,999, charges would be 2.25% and for an amount of Rs.5, 00,000 or more, the charges would be 1.25% of the premium. 62
    • zzzzzzzzz 63 ADMINISTRATIVE CHARGES Other charges would include annual administrative charges of 1.25% per annum of net assets for Protector (Income) and 1.25% per annum for Maximizer (Growth) and Balancer (Balanced) options. An annual investment charge of 0.25% per annum of net assets for Protector and 1% for Maximizer (Growth) and Balancer (Balanced) would also be charged. FOREVERLIFE (DEFERRED PENSION) FOREVERLIFE A comprehensive retirement solution that is developed keeping in mind your various capabilities and needs, with respect to your retirement planning. We make sure you can plan well when you can and maintain your lifestyle for a lifetime. So, whether you are 30 or 60 we have just the right retirement plan for you. LIFE COVER BENEFITS Forever Life Pension Plan provides life cover during the deferment phase. In the unfortunate event of your death, your spouse has the option to receive the sum assured with guaranteed additions and vested bonuses (if any) as a lumpsum or get an annuity that would provide a regular income for life. VESTING AGE You can choose the vesting age between 50 to 70 years. You have the flexibility to postpone the vesting from the originally chosen vesting date up to a maximum of 70 years of age. This option can be exercised once at the time of vesting. During the postponed period, your accumulated amount will earn interest as determined by the company from time to time. There will be no life cover or premiums paid during this period. ELIGIBILITY You should be between 20 and 60 years of age. 63
    • zzzzzzzzz 64 MINIMUM SUM ASSURED Minimum sum assured is Rs. 50,000. TERM Minimum term is 5 years and the maximum is 30 years. MINIMUM PREMIUM Minimum premium is Rs.6, 000. SURRENDER Forever Life Pension Plan acquires a surrender value after premiums for 3 policy years are fully paid. A surrender value is payable if you wish to withdraw after 3 years. ANNUITY PAYMENT MODE Your accumulated value would start paying you regular income in the form of an annuity, at a frequency chosen by you. This income can be received monthly, quarterly, half-yearly or annually. GURANTEED ANNUITY PERIOD • You have the option of selecting a guaranteed annuity rate period of either 5 or 7 years. • The amount of annuity is fixed for a guaranteed annuity rate period and will be recalculated at intervals of every guaranteed period, based on the then prevailing annuity rates. • On commencement, and at the end of every guaranteed period, the amount of annuity payable for the next guaranteed number of years and the Residual Purchase Price (which will be available for calculation of the annuity rate at the end of the guaranteed annuity period), on survival, will be guaranteed. • Once the policy holder is 75 years of age, the annuity will be fixed for life and not reviewed thereafter. 64
    • zzzzzzzzz 65 OPEN MARKET OPTION At the time of reset of the annuity, you have an Open Market Option, which would enable you to get your annuity from any other annuity provider, should our rates not be as competitive. ANNUITY OPTION 1. Life Annuity: Annuity for life. 2. Life Annuity with Return of Purchase Price: Life Annuity for the annuitant with the return of the purchase price to the beneficiary 3. Life Annuity Guaranteed for 5, 10, 15 years: Guaranteed Annuity is paid for the chosen term (5/10/15 years) and after that, the annuity continues as long as the annuitant is alive. 4. Joint Life, Last Survivor with Return of Purchase Price: In this case, the annuity is first paid to the annuitant. After the death of the annuitant, the spouse starts getting a pension, which is an amount that is equal to the annuity paid to the annuitant. After the death of the last survivor, the purchase price is returned to the beneficiary. 5. Joint Life, Last Survivor without Return of Purchase Price: In this case, the annuity is first paid to the annuitant. After the death of the annuitant, the spouse starts getting a pension, which is an amount that is equal to the annuity paid to the annuitant. 65
    • zzzzzzzzz 66 HDFC STANDARD LIFE INSURANCE PERSONAL PENSION PLAN WORKING OF PERSONAL PENSION PLAN This participating (with profits) plan is basically a savings contract, which is designed to provide an income for life from retirement. It does this by providing a notional lump sum on retirement, comprising of sum assured plus any attaching bonus. Subject to the prevailing regulations, part of this lump sum can be taken in form of cash and the rest converted to an annuity at the rate then offered by HDFC Standard Life. Alternatively, if it is permitted by the prevailing regulations, the notional lump sum can be used to buy an annuity with any other insurance company who will accept such business. On earlier death after the first year, for Regular Premium policies all premiums paid to date will be returned with interest at 8% per annum, subject to a maximum of the sum assured plus bonuses declared to date. For Single premiums, it is sum assured plus bonuses declared to date. Normally, we will declare a reversionary bonus once a year. Once added, it cannot be reduced. Reversionary bonus will take the form of a simple addition to your policy benefits. In addition, on maturity, a terminal bonus might be payable. On death, an interim bonus, reflecting the period since the last addition of reversionary bonus, might also be payable. 66
    • zzzzzzzzz 67 NOTIONAL LUMP SUM AS CASH ON RETIREMENT Subject to the prevailing legislation and regulations, part of this can be taken as a lump sum and the rest used to buy an immediate annuity. PAYING PREMIUMS You can pay either a single premium or pay premiums in quarterly, half-yearly or annual form by cheque, in cash or by bank drafts. BASIC BENEFITS Your basic benefits will be paid by cheque. ALTER THE BASIC BENEFITS AND TERM OF POLICY You cannot increase your benefits or term under this policy. To increase your benefits, you would need a new policy. You should contact your personal financial consultant. You may be able to decrease the benefits. The terms for so doing will be at our discretion. COST The cost of the plan depends on your age, the amount of benefit you have chosen, the premium paying frequency and the term of the policy. To give you an idea, here are the annual premiums in Rupees, payable on a policy with sum assured of Rs. 100,000. Age Term 10 15 20 30 n/a n/a 4,309 35 n/a 6,098 4,327 40 9,577 6,117 4,357 For Single premium policies, the premium payable with respect to the basic benefit is equal to the basic sum assured as required by the policyholder. ELIGIBILITY 67
    • zzzzzzzzz 68 Minimum Maximum Minimum Maximum Minimum Maximum Term3 Term Age atAge atAge atAge at Entry Entry Retirement Retirement RP1 SP2 RP SP RP SP 10 5 40 15 18 35 60 50 70 1. RP: Regular Premium 2. SP: Single Premium 3. Term to Retirement LOANS There is no facility for loans against this contract. SURRENDER VALUE You can surrender the policy at any time. Subject to prevailing legislation and regulations, you may be paid a surrender value at our discretion. If premiums have been paid continuously for at least 3 years, the surrender value will be subject to a guaranteed minimum. GUARANTEED SURRENDER VALUE Before retirement, the guaranteed surrender value, including the value of any attaching bonuses, for Regular premium policies is: • Zero in respect of premiums paid in the first year; and • 50% of premiums paid subsequent to the first year in respect of the basic benefit, excluding all additional premiums. • Before retirement, the guaranteed surrender value, including the value of any attaching bonuses, for Single Premium policies is 50% of the single premium paid in respect of the basic benefit, excluding all additional premiums. 68
    • zzzzzzzzz 69 OM KOTAK MAHINDRA KOTAK RETIREMENT INCOME PLAN KOTAK RETIREMENT INCOME PLAN The Kotak Retirement Income Plan is a savings plan designed to meet your post- retirement needs. It is a plan that gives you "Jeene ki azaadi". It gives you the choice to remain independent even after retirement. The Kotak Retirement Income Plan is a participating plan. The plan comes in two forms: • With Cover • Without Cover. ELIGIBILITY Minimum age - 18 years Maximum age - 60 years TERM Term can you chosen to pay the premiums: 5 yrs - 30 yrs VESTING AGE Minimum Age - 45 yrs, Maximum Age - 65 yrs COMMUTATION You may take a lump sum in cash of up to a third of your Basic Sum Assured or Accumulation Account, whichever is higher; and the balance of the benefit you are eligible for will be used to buy an annuity of your choice. 69
    • zzzzzzzzz 70 OPEN MARKET OPTION You may buy an annuity either from OM Kotak Mahindra (subject to the choice and rates available at that time)(Only with cover plan), or from any other insurer. CANGING OF VESTING AGE : PRE-PONE - VESTING AGE You may opt to retire early, i.e. at any age before the normal retirement date (subject to the policy being in force for 3 years or your attaining a minimum age of 45 yrs, whichever is later). You can then secure benefits with your Accumulation Account, net of an early retirement charge of 5%. If the early retirement is due to ill health, then you may retire before attaining the age of 45. You can then secure benefits with your full Accumulation Account. POST-PONE - VESTING AGE You may opt to retire after the retirement date originally selected, and select a new retirement date (subject to a maximum of 65 years). No further premiums will be payable and the death benefit will be equal to the balance in Accumulation Account. (However, all riders will cease at the original retirement date). LUMP-SUM INJECTIONS You can make lump-sum injections into your policy at any time before retirement (such lump-sum injections during a year may not exceed 25% of the Basic Sum Assured). A Supplementary Accumulation Account will be created for this, and will be paid out in the same manner as other benefits. You may exercise the option of paying premiums from the Supplementary Accumulation Account, created for "lump-sum injections", if the need arises. For a "With Cover" plan, you have the facility of Automatic Cover Maintenance, which ensures that the cover remains in force even when you miss the premium payments. This facility is available after the first three years of the term. You have the option of paying premiums in quarterly, half-yearly or yearly installments. FREE LOOK PERIOD You have the facility of a 15-day free look period. 70
    • zzzzzzzzz 71 KOTAK IMMEDIATE INCOME PLAN (Only with cover plan) For example you can currently avail of the Kotak Immediate Income Plan, which gives the option of Life Annuity with Return of Purchase Price. The annual annuity rate applicable for an immediate annuity purchased now is 6.11% of Purchase Price (before deduction of charges), for the age group 56 years to 65 years. This, however, will vary with prevailing market interest rates, but will be competitive 71
    • zzzzzzzzz 72 MAX NEW YORK LIFE EASY LIFE RETIREMENT (PARTICIPATING) PLAN TAX BENEFIT You can avail of a tax benefit u/s 80CCC (1) of the Income Tax Act 1961 on a premium of up to Rs.10, 000 per annum. If you are in the tax bracket of 31.5%, you can reduce your tax liability up to Rs.3, 150 on a premium of Rs.10, 000 towards this policy this benefit is available to you every year you pay. PLAN DETAILS Regular Premium Single Premium Entry Age 20 - 60 years 20 - 60 years Chosen Retirement Age 50 - 70 years 50 - 70 years Deferment Period 10 - 40 years 10 - 40 years (Subject to min. vesting age) (Subject to min. vesting age) Premium Payment 10 - 40 years Not applicable Period Minimum Premium Rs. 2,500 Rs. 100,000 CHOSEN RETIREMENT AGE The age on which your annuity vests. ANNUITY DETAILS 72
    • zzzzzzzzz 73 Notional Corpus During your earning years, you pay us a fixed premium every year or a single premium. On the date of retirement that you choose, this policy provides you with a Notional Corpus, comprising the Sum Assured, together with Pure Endowment benefits purchased out of the bonuses declared by the Company from time to time. You can take up to 25% of this Notional Corpus in lump sum and use the balance amount, to purchase an annuity. ANNUITY OPTIONS You can choose any one of the Annuity options at least 6 months before vesting date. • Annuity for Life You will get an annuity for life. • Annuity for a guaranteed minimum period of 5/10/15/20 years as chosen by you, and life thereafter. You or your legal representative (in case of your death) will receive annuity for your chosen period. On your survival at the end of this period, you will continue to get the same amount for the rest of your life. • Annuity for Life, with return of annuity purchase priceYou will get the annuity for life. When you die, your legal representative will get the refund of annuity purchase price. For ages more than 50 years the current prevailing annuity rate is 4.375 % per annum You can also choose any other annuity options offered by us at the time of exercise In case you do not choose any annuity option, you shall receive an Annuity for Life. The Annuity plan opted for by you cannot be altered during the six months before the vesting date. PREMIUM PAYMENT OPTIONS You have the option of paying a Single Premium or Regular Premiums. For the latter, yearly and half yearly options are available. OPEN MARKET OPTION You have the flexibility to purchase Annuity from any other IRDA approved company. In such a case, we shall pay the notional corpus directly to such a company chosen by you. 73
    • zzzzzzzzz 74 SURRENDER You have the freedom to surrender your Policy prior to its Vesting Date. Subject to statutory or other restrictions, if any, we shall pay a minimum guaranteed surrender value of 55% of the Premiums received in Regular Premium policies, and 80% of the Premium received in Single Premium policies. However, the policy will not acquire any cash surrender value until completion of one year from the date of issue of the policy. FREE LOOK PERIOD You have the freedom to cancel this Policy by returning the original Policy with a written request to us within 15 (fifteen) days from the date of receipt of this Policy, in which case the Premiums paid less expenses incurred on stamp duty by us, will be refunded without interest. ANNUITY DETIALS For premium Rs 10,000/- per annum Entry Retirement at Age 50 Retirement at Age 60 Age Sum Notional Annuity for Sum Notional Annuity for 30 Assured Corpus * Life * Assured Corpus * Life * 243,250 322,335 20,040 373,832 625,312 45,704 Entry Retirement at Age 60 Retirement at Age 70 Age Sum Notional Annuity for Sum Notional Annuity for 40 Assured Corpus * Life * Assured Corpus * Life * 241,196 321,891 23,527 365,764 633,731 60,724 74
    • zzzzzzzzz 75 DEATH BENEFIT In the unfortunate event of your death within one year from the effective date of the policy, we shall refund the premiums received without any interest. In the unfortunate event of your death after one year from effective date of the policy (but before the vesting date), we shall be refund of premium with interest @ 3% per annum as the minimum guaranteed interest rate, limited to the sum assured specified in the schedule together with the Cash Value of the Pure Endowment benefits, if any. This may be availed of by the beneficiary: a. Either in lump sum, orb. By way of purchase of life annuity with return of Annuity Purchase Price from us or any other IRDA approved Company. 75
    • zzzzzzzzz 76 ING VYSYA BEST YEARS RETIREMENT PLAN WORKING OF THE PLAN An ING Vysya Lifeline will first help you in deciding on a regular contribution to be made every year, which will ensure an adequate pension on retirement at a vesting age of your choice. PREMIUM CONTRIBUTION You have the complete flexibility to decide the time, amount and frequency of contributions you make each year. INVESTMENTS All contributions will be transferred to your Individual Pension Account (IPA) and charges, as applicable, will then be deducted. The balance in the IPA will be invested in the ING Vysya Capital Guranteed Plan which is invested as follows - Type of Asset Percentage Govt Securities Not less than 20% Govt Securities or other approved not less than 40% Securities (Inc. of the above) Balance in Approved Investments not exceeding 60% • The Investment income, realized gains/losses earned or realized during the year by the company on the investments net of any costs, expenses and taxes if any, will be distributed among policy holders as Bonus Interest. 76
    • zzzzzzzzz 77 • The Bonus Interest will be in proportion to the period for which the monies are invested in the ING Vysya Capital Guranteed Plan during the year and will be credited to your plan IPA on 31st of March each year. COMMUTATION On your attaining the chosen vesting date, one-third of the benefit amount can be withdrawn and its tax free under section 10(10A) of the IT Act. The balance amount will be utilized to purchase an annuity. DEATH BENEFITS The benefit amount under this plan on the vesting date on earlier death of policy is the balance amount in the IPA. In case of death during the term, your spouse will have the following options in respect of the benefits under the policy • To defer the purchase of annuity if the age of the spouse is less than 45 years • To encash up to 5% (or such percentage decided by the company depending upon the investment return) of the Benefit Amount outstanding each year up to the the age of 45 years and then apply the balance if any, at age 45 to purchase annuity • In case there is no spouse, the benefit amount will be paid in lump sum to the nominee/legal heirs. OPEN MARKET OPTION To purchase annuity from IVL or any other insurer TERM RIDER BENEFITS • The cover shall be equal to the lower of 5 times the regular contribution or Rs 1 lakh • The sum assured under this rider will be used to increase the benefit amount under the basic policy 77
    • zzzzzzzzz 78 TATA AIG NIRVANA VESTING AGE You can choose your retirement fund and your retirement age (anywhere from 50 to 65 years) so you choose the age from which you start getting your pension. GURANTEED RETURNS Like no other retirement plan in the market, it guarantees an additional 10 per cent of the sum assured if your policy has been in force for 10 years. That's how sure we are of our future stability. So when you're ready to put up you feet and rest, you worry about your garden, not how you fund it. This guaranteed addition is also payable on death. NON GURANTEED RETURNS To top all this, extras like our Reversionary and Terminal bonuses add up to a very attractive package. The Reversionary bonus is projected at an annual 3 per cent (compounded) from the 5th year of your policy. The Terminal bonus - that can go up to 40 per cent - is paid at the time of retirement or death (policy must be in force for a minimum 10 years). Both these bonuses are non-guaranteed and depend on the performance of the company. COMMUTATION At the time of retirement or death we return 25 per cent of your accumulated sum. With the other 75 per cent you (or your nominee) buy an annuity - an annuity being something that pays you a monthly pension for the rest of your life. 78
    • zzzzzzzzz 79 OPEN MARKET OPTION You can buy this annuity from us or from any other insurance company in India. TAX BENEFITS The lump sum on retirement (or death) is tax-free, and you get tax benefits on the premiums paid - under Section 80CCC (1). RIDERS You can also attach Accident, Term and Critical Illness riders to this policy for added protection. 79
    • zzzzzzzzz 80 LIC NEW JEEVAN SURAKSHA - 1 AGE ELIGIBILITY Minimum Age at entry: 18 years, Maximum age at entry: 70 years VESTING AGE Minimum vesting age : 50 years, Maximum vesting age : 79 years MINIMUM PERIOD Minimum deferment period : 2 years. PURCHASE PRICE Minimum Notional Cash option: Rs. 50,000 for regular premium policies (Notional Cash Option - This is an amount based on which annuity/pension is calculated. The policy holder will not get this amount). MINIMUM ANNUAL PREMIUM Minimum amount of Annual Premium: Rs. 2500 Minimum Single Premium: Rs. 10,000/- Maximum deferment period: 35 years. COMMUTATION The Notional Cash Option together with Reversionary Bonuses and Final additional Bonuses (if any) with or without 25% commutation will be compulsorily converted into annuity having following options. 80
    • zzzzzzzzz 81 ANNUITY OPTIONS • Annuity for life with guaranteed period of 5, 10, 15, 20 years. • Joint life and last survivor annuity to the annuitant and his/her spouse under which annuity payable to the spouse on death of the purchaser will be 50% of that payable to the annuitant. • Life annuity with return of purchase price. • Life annuity with annuities increasing at a simple rate of 3% per annum. The annuity rates will be that available under the version of the New Jeevan Akshaya Plan current at the date of vesting. A rebate of 3% will be available on the purchase price of the New Jeevan Akshaya Policy. Option for the annuity type is to be exercised at least 6 months before the date of vesting. DURING DEFERMENT A term rider option will be available. On the death of the policyholder who has opted for the term Assurance rider (provided the policy is in-force), the Term Assurance Sum Assured along with all premiums (excluding term Assurance premium and extra premium if any) paid up to the date of death accumulated at the rate of 5% p.a. compounding or at such rates as decided by the Corporation from time to time will be paid to the nominee. When the policy is not in-force, only return of premiums with interest as stated above will be available. For those not opting for the Term Assurance Rider, in respect of policies which are in- force or in a paid up condition, all premium accumulated at 5% p.a. compounding or at such rates as decided by the Corporation from time to time, will be paid to the nominee. Term Rider Option will be available only on the Annual Premium Plan. REBATES Premium will be payable yearly, half-yearly, quarterly or monthly (including SSS) or by single premium. Mode rebates @ 2.6%, 1.3% and 0.5% of the tabular annual premium will be available for yearly, half- yearly and quarterly premiums. For large cash option the rebates available are: 81
    • zzzzzzzzz 82 >=1,00,000 < >=2,00,000 < AMOUNT (Rs) >= 5,00,000 2,00,000 5,00,000 Rebates Available for Single 3% 4% 5% Premium Rebates Available for Annual 6% 7% 8% Premium Both rebates will be applied separately on the Tabular Premium and not after the other has been applied. SURRENDER VALUE For Annual Premium Plans: The Guaranteed Surrender Value will be equal to 90% of all premiums paid excluding the first year premium, all Term Assurance premium and extra premium (if any). This will be allowed after at least two full years’ premiums have been paid and will be available after two full years have been completed from the date of commencement. However, the policy can not be surrendered after the annuity vests. For Single Premium Plan: The Guaranteed Surrender Value will be 90% of the single premium paid. Surrender will be allowed 2 years after the commencement of the policy. SPECIAL SURRENDER VALUE For Annual premium policy this will be available at least two years after date of commencement and during deferment period if at least two full years’ premium has been paid. For Single premium policies, this will be available one year after the date of commencement and during the deferment period. The special surrender value will be quoted separately. Surrender value will not be available for the Term Rider Benefit. GRACE PERIOD 82
    • zzzzzzzzz 83 The days of grace will be one calendar month but not less than 30 days under the yearly, half-yearly and quarterly modes of payment of premium. For monthly mode, the days of grace will be 15 days. 83
    • zzzzzzzzz 84 SBI LIFE LIFELONG PENSION GURANTEED RETURNS Guaranteed Returns On top of a guarantee of the principal corpus, our plan gives a minimum guaranteed return on the savings. LIFELONG Pensions guarantees you a minimum return of 4% per annum during the first seven years of your subscribing to the Pension Plan and the return is compounded annually (Till 31-March-2010). In addition, you will be entitled for any annual bonus that might be declared by SBI Life every year based on the net surplus from the pension fund investments. SBI Life would announce the minimum rate from time to time, so that at any point of time there is a minimum guaranteed rate that your retirement savings will accumulate with us. On top of a guarantee of the principal corpus, our plan gives a minimum guaranteed return on the savings. TAX SAVING All contributions you make under our Pension Plan qualify for tax exemption under Section 80 CCC (1) of the Income Tax Act(1962) up to the ceiling level permitted (currently Rs.10,000 per annum). The deduction is available to everyone irrespective of the tax bracket they come under ELIGIBILITY Any person between the age of 18 to 65 can subscribe to this unique Pension plan. PREMIUM The pension Account Holder can invest any amount of regular contribution towards retirement savings, with a minimum of just Rs. 3,000 per year. He/She can increase or lower the annual contribution during his/her working life, subject to this minimum amount. 84
    • zzzzzzzzz 85 LUMP SUM PAYMENT The Pension Account holder can also have the option of making a one-time lump sum payment. Just pay a lump sum amount at any time during your working life, watch the amount grow with SBI Life, and choose the suitable pension option when you opt to enjoy the retired life. 85
    • zzzzzzzzz 86 AVIVA INDIA LIFE INSURANCE PERSONAL PLUS PREMIUM Pension Plus is a regular savings personal pension plan. ELIGIBILITY AGE It can be purchased for any life between 18 to 65 years of age. VESTING AGE The minimum age at maturity is 50 years and the maximum age at maturity is 70 years. MINIMUM PREMIUM The minimum annual premium is Rs. 6,000. TERM The minimum policy term is 5 years. PREMIUM TOP-UPS You have the flexibility of increasing your regular premiums (minimum increase of Rs. 1,000). However, regular premium once increased cannot be reduced. CHANGE OF VESTING AGE You have the option of increasing the policy term through a written communication at least three months prior to the maturity date. The minimum increase allowed in the 86
    • zzzzzzzzz 87 policy term is one year. This option can be exercised only once during the term of the policy. OPTION OF RETIAINING THE POLICY You also have the option of retaining the policy (after the expiry of the policy term) with the Company by converting it into a paid-up policy till you attain 70 years of age. UNIT PURCHASE The premium you pay is used to purchase units at their current price on the date of allocation. You earn investment returns through increases in unit price. INVESTMENT OPTIONS Pension Plus offers two investment fund options - • With Profits Fund The With Profits Fund provides a guarantee that the selling price of the units will never fall. The unit value of this fund is increased by crediting bonuses on daily compounding basis. A final bonus, if any, may also be payable at maturity, death, or at the time of surrender. The fund provides investment security to your capital. LUMSUM INVESTMENT Pension Plus also offers you the flexibility of making lump sum investments through additional single premiums, apart from the regular premiums, as often as you require over the duration of the policy. These increase the savings value of the policy besides maximizing tax benefits. The minimum lump sum investment through additional single premium is Rs. 10,000/- at present but may vary subject to reviews by the Company. The additional single premium units can be surrendered only on full surrender of the policy. 87
    • zzzzzzzzz 88 INDEXATION: INFLATION PROTECTION Indexation protects the purchasing power of the maturity value so that your savings remain a meaningful amount. You have the option of increasing the regular premium by an inflation adjustment as determined by the Company. You can maintain the real value of your policy by accepting these indexation increases. MINIMUM REGULAR PREMIUM Payment of at least the minimum specified regular premium up to the stipulated age. 88
    • zzzzzzzzz 89 RESERCH METHODOLOGY Marketing Research Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customer’s value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data must be collected and analyzed. The goal of marketing research is to provide the facts and direction that managers need to make their more important marketing decisions. To maximize the benefit of marketing research, those who use it need to understand the research process and its limitations. Marketing Research vs. Market Research These terms often are used interchangeably, but technically there is a difference. Market research deals specifically with the gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing problems. The Value of Information Information can be useful, but what determines its real value to the organization? In general, the value of information is determined by: • The ability and willingness to act on the information. • The accuracy of the information. • The level of indecisiveness that would exist without the information. • The amount of variation in the possible results. • The level of risk aversion. • The reaction of competitors to any decision improved by the information. The cost of the information in terms of time and money. 89
    • zzzzzzzzz 90 FINDINGS 1. The awareness of BAJAJ ALLIANZ LIFE INSURANCE CO. among the people in Bareilly is of a large ratio, Approximately 79% of the people surveyed knew about the Company. This is shown by the following chart:- 21% YES NO 79% 2. People, who are aware of the company, are mainly through the Company’s representative or some other channels. Hardly anyone recognizes the company through advertisements. This is as shown below:- 4% THROUGH MEDIA 16% ADVERTISEMENT THROUGH REPRESENTATIVE OF 4% MNYL THROUGH ARTICLES 12% OTHER CHANNELS 64% DON'T KNOW 3. Nearly 83% of the people surveyed have taken a life insurance policy for themselves and their family but most of them prefer LIC to various 90
    • zzzzzzzzz 91 private insurance companies. This is represented by the following charts:- 17% YES NO 83% 17% LIC OTHER PRIVATE COMPANIES NO INSURANCE 19% 64% 4. When asked about the importance of insurance in their lives, 70% of people were in favor of safety i.e. they have taken insurance for safety purpose. This is represented below:- 16% 2% 12% SAFETY INVESTMENT TAX-SAVING OTHERS 70% 5. 28% of the people who knew about the company are satisfied with the services offered by the company as shown below:- 91
    • zzzzzzzzz 92 11% 11% 0% EXCELLENT GOOD 22% AVERAGE POOR CAN'T SAY 56% 6. Most amazing fact is that, BAJAJ ALLIANZ has been considered as a trustworthy company no matter not much people knows about it. 10% 2% Trustw orthy Non Trustw orthy Can't say 88% 7. The company still needs a lot to be done as far as publicity is concerned. The following chart depicts that 55% people says that the company needs more publicity . yes 45% no 55% 8. The most preferred media chosen by most of the people is television as they more deeply come to know abt the features of the product through it. 92
    • zzzzzzzzz 93 8% 24% Television 48% Radio New spaper MNYL Representative 20% 93
    • zzzzzzzzz 94 SWOT ANALYSIS S – Strength W – Weakness O – Opportunity T- Threat Strike the iron when it is hot It was a great experience for me to have the summer training in BAJAJ ALLIANZ. To conclude my observation regarding BAJAJ ALLIANZ, I had undertaken a topic to give a good report that is really beneficially for me. I therefore, had an opportunity to give my views and opinions about BAJAJ ALLIANZ through this project report. I have expressed this through a very important technique called SWOT analysis. Here are the findings and observation:- 1. STRENGTHS: • A hard nut to crack: To manage such a big organization, is really a tuff work and the officials and the departmental heads have well managed it. • Like King, like subject Not only the top management and other officers but also the lower level employees are very cooperative, energetic, and effective and dedicated for their work. 94
    • zzzzzzzzz 95 • NO pain, no gain: The various department heads and the other officials are doing great efforts and hard work for the improvement of the organization and facing the competition. • DO good, get well: The employees working over here get a good degree of respect and appreciation for their effort, which in return, motivates them. 2. WEAKNESS: • A little knowledge is dangerous than no knowledge: Some people working over here are not fully aware of the working of the organization and hence they always have to consult each other on even the smallest matters. • Great cry, little wool: The working here is to complex i.e. attending the customers daily, taking care of customers problems. But net working capital is very less. • Half a loaf, better than no bread: Some people work in these organizations only because they are getting something in return in the form of salary, which is better than nothing. 3. OPPURTUNITIES: • A drowning man catches on a straw: It gets a good level of assistance from the superiors as well as other staff members when they try to provide some help in the matter which are not meant to be handled, by one own self. 95
    • zzzzzzzzz 96 • Every potter praises his pot: The people from head office are always on a routine visit to check the working so that they can do much better for more profits. • It is of no use to cry up on the split milk: They tend to learn from the past mistakes, which leads to loose sometimes and have proved to be one of the best bottlers of India. • Rome was not built in one day: The organization is built with lots of efforts of all the concerned people and they always try to maintain its position. 4. THREATS: • Rotten apples injure their companions: Some people are lethargic and due to lack of strict supervision, they sit as much as they can and do nothing. • Birds of a flower flock together: The top management takes very less care about the employees development and work for their own facilities. 96
    • zzzzzzzzz 97 CONCLUSION It is clear from the above study that insurance business is mushrooming in the country. Today there are number of insurance companies offering different insurance plans with different added advantages. LIC is leading company in the insurance business in India with a market share of 51.44% followed by BAJAJ ALLIANZ with a market share of 11.27%. By having a deep analysis of comparison of various pension plans, I do conclude that although all the companies have kept the best insurance plans with almost equal benefits. And it is somewhat difficult to distinguish But still if I have to distinguish , I will say the best pension plans are of lic and bajaj allianz. Although ICICI PRUDENTIAL plans also seem to be attractive for the customer. But the another most attractive plan of BAJAJ ALLIANZ is there which is giving allocation up to 98% in case of top ups and its pension plan named NEW UNIT GAIN EASY PENSION PLAN is a regular premium (fixed premium payment term) investment linked deferred annuity policy without life cover. • Available as Regular and Single Premium Option. and also offers Choice of 5 investment funds viz Equty Index, Equity Plus, Balanced plus, Debt plus & cash plus fund • Whereas Birla Sun Life is offering a policy of minimum amount of Rs.75,000/- as compared to minimum insurable sum of Rs.50,000/- 97
    • zzzzzzzzz 98 offered by ICICI Pru and Allianz Bajaj at the same time Birla Sun Life is also guaranteeing a minimum return of 3% p.a. on your premium net of all policy fees and charges. Analysis shows that all the insurance companies taken into study are providing almost equal benefits. 98
    • zzzzzzzzz 99 RECOMMENDATIONS • BAJAJ ALLIANZ should provide the home services to its customers. • BAJAJ ALLIANZ should reduce its minimum policy payment in the first installment. • To educate the client/customer, the interaction with the client should be improved by conducting seminar, client meetings and workshops. • To increase the market share, BAJAJ ALLIANZ should increase its branch network, especially in the rural areas. 99
    • zzzzzzzzz 100 LIMITATION OF THE STUDY This summer training will always remain one of the best experiences of my life. But no study is complete in itself , however good it may be and every study has some limitations , some of the limitations which I have confronted are as follows:- • Companies were not ready to give address of their respective customers to conduct a survey. • Time period for covering the project was short. • It was a cumbersome task to compare Pension plan of all the companies. 100
    • zzzzzzzzz 101 BIBLIOGRAPHY • Study Material of ALLIANZ BAJAJ • Study Material of HDFC STANDARD LIFE • Study Material of ICICI LIFE INSURANCE CO.LTD. • Study Material of LIFE INSURANCE CORPORATION • Study Material of BIRLA SUN LIFE • Study material from PHILIP KOTLER • Article from TIMES OF INDIA ,dated 23rd august 2006 • Article from BUSINESS WORLD, dated 16 July 2006 WEBSITES • www.allainzbajaj.com • www.iciciprulife.com • www.hdfcstandardlife.com • www.icicibank.com • www.bimaonline.com • www.licindia.com 101
    • zzzzzzzzz 102 The decision has been made to invest in pension funds . . . enjoy a tension free tomorrow . . . 102