Insurance Project on ULIP

Summer training project report on “ Customers-Perspective of ULIP ”

AEGON RELIGARE LIFE INSURANCE COMPANY

SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE OF MASTERS OF RISK & INSURANCE MANAGEMENT (2008-10) FACULTY OF COMMERCE, BANARES HINDU UNIVERSITY.

Submitted by: Khushboo Jain Roll no. 09 MRIM

PREFACE It gives me immense pleasure to present this research report on “CUSTOMER-PERSPECTIVE ON ULIP”. The research incorporates analysis of the features of various unit linked plans, its demand in the market and after sales service. The report addresses various issues, which would help in identifying the needs of individuals and suggesting for the right unit linked plan. It is submitted as a part of the course curriculum of Faculty of Commerce, BHU, Varanasi. The report is written in an easy language using systematic methodology. I have given my best efforts to cover all the aspects related to the topic and to make the report purposeful.

Acknowledgement It is said that bidding thanks to the well-wisher lessens the weightage of its contribution. However mentioning the words of thanks is the only way to express the gratitude. At the outset, I would like to thank AEGON Religare Life Insurance (ARLC) for having given me an opportunity to do a project on market research on customer perspectives. My special gratitude to my project guide, Mr. Mohammed Azam (Agency Development Manager) for imparting me with clear direction and providing me with practical insights at various stages of the project. I would also like to thank Mr. Anil Chaturvedi (Branch Manager) for providing me with valuable inputs throughout the course of the project. My sincere thanks to Miss Shradha Gupta (Trainer) and Mr. Prakash (Business Manager) for helping me out immensely with the execution of the project plan. I owe a lot to the entire marketing team of ARLC for having provided me with a lot of help and encouragement at every stage of the project. I also sincerely thank all the clients of ARLC for having provided me with critical insights into the operations of ARLC. Last but not the least, I wish to express my sincere thanks to FACULTY OF COMMERCE for providing me an opportunity for conducting this training.

INDEX S. No.

Content

1

Objective

2

Industry profile

3

All About ULIPs

4

Profile of the Company

5

Products

6

SWOT Analysis

7

Competitors

8

Research Methodology

9

Customers

10

Data Interpretation

11

Recommendation & Suggestions

12

Questionnaire

13

Bibliography

PRIMARY OBJECTIVE

To know about customer perspective of Unit Linked Insurance Plans.

SECONDRY OBJECTIVE •

Assessment of customer satisfaction

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Assessment of corporate culture

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To identify whether the customers are aware of the ULIPs of ARLF

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To analyze the factor(s) to increase the sales f ULIPs of ARLF.

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To know the pattern of investment in insurance sector in context of Varanasi

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To know what they think about investment

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To know perception of consumers about different sector of insurance company

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To know perception of consumers of their mode of premium payment.

Limitations Every Research work suffers from certain limitations .The survey undertaken is also not free from all defects .The purpose of presenting the limitations is to help the reader in forming opinion about the reliability and validity of the present result.

1. The universe selected for the survey comprised of only Varanasi. So the result should not be generalized for the entire bulk.

2. Sample size is too small which may affect the reliability of the result 3. Because of lack interest in such activities, the respondents were not benefited in any way and therefore there are chances of incorrect or biased replies.

4. The survey is one sided i.e., I studied the topic from customer’s & company. Competitors’ viewpoint has not been covered.

INDUSTRY PROFILE Many may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The first Indian life insurance company

was the Oriental Life Insurance Company, which was started in India in 1818 at Kolkata. A number of players (over 250 in life and about 100 in non-life) mainly with regional focus flourished all across the country. However the government of India, concerned by the unethical standard adopted by some player against the consumers, nationalized the industry in two phases in 1956(life) and in 1972(non-life).The insurance business of the country was then brought under two public sector companies, Life Insurance Corporation of India (LIC) and General insurance Corporation of India (GIC). In line with the economic reforms that were ushered in India in early nineties, the Government set up a committee on reforms (popularly called the Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. The Committee recommended throwing open the sector to private player to usher in competition and bring more choice of the consumers. The objective of the insurance to penetration of insurance as a percentage of GDP, which remains low in India even compared to Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory, which has put in place regulations in line with global norms. So far it is not made public.

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies

The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the insurance companies was the launch of the IRDA’s online services for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered.

PURPOSE & NEED OF INSURANCE Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, flood, breakdown, lightening, earthquake, etc. are perils. If such perils can cause damage to the assets, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to an owner of a building, because of the peril of earthquake, may be a few crores of rupees, depending on the cost of the building and the contents in it. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can

sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of risk on the owner of the asset and those who depend on that asset. It only compensates the losses- and that too, not fully. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of noneconomic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.

ROLE OF LIFE INSURANCE 1. Life insurance as “Investment” 

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Insurance is an attractive option for investment. Which most people recognize the risk hedging and tax saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options. You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks, something that is missing in non-insurance products. In fact, the premium you pay for an insurance policy is an investment against risk. Thus before comparing with other schemes, you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings.

2. Life insurance as “Risk cover” o First and foremost, insurance is about risk cover and protection –financial protection, to be more precise – to help outlast life’s unpredictable losses. By buying life insurance, you buy peace of mind and are prepared to face any financial demand that would hit the family in case of an untimely demise. o To provide such protection, insurance firms collect contributions from many people who face the same risk. A loss claim is paid out of the total premium collected by the insurance companies, who act as trustees to the monies. o Insurance also provides a safeguard in the case of accidents or a drop in income after retirement.

3. Life insurance as “Tax planning” •

Insurance serves as an excellent tax saving mechanism too. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Under section 80(c) of Income Tax Act 1961,an individual is entitled to a rebate of Rs.1Lakh on the annual premium payable on his/her life and life of his/her children or adult children. The rebate is deductible from tax payable by the individual or a Hindu Undivided Family (HUF), the rebate is deductible from the tax liability of an individual or a Hindu Undivided Family.

ADVANTAGES OF LIFE INSURANCE Life insurance has no competition from any other business. Many people think that life insurance is an investment or a means of saving. This is not a correct view. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in the past, plus interest. If the money is invested in buying shares and stocks, there is the risk of the money being lost in fluctuation of the stock market even if there is no loss, the available money at any time is the amount invested plus appreciation. In life insurance, however the fund available is not the total of the savings already made (premium paid),but the amount one wished to have at the end of the saving period (which is the next 20 or 30 years).the final fund is secure from the very beginning. One has to pay for it only as long as one life or for a lesser period if so chosen. There is no other scheme which provides this kind of benefit therefore life insurance has no substitute. Even so, a comparison with other form of saving will show that life insurance has the following advantages:•

• • •

In the event of death, the settlement is easy. The heirs can collect the moneys quicker, because of the facility of nomination and assignment. The facility of nomination is now available for some bank accounts. There is a certain amount of compulsion to go through the plan of savings. In other forms, if one changes the original plan of savings, there is no loss.

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Creditor can not claim life insurances moneys. They can be protected against attachment by courts. There are text benefits, both in income tax and capital gains. Marketability and liquidity are better. A life insurance policy is property and can be transferred or mortgaged. Loan can be raised against the policy.

SIGNIFICANCE FOR AGENT The following tenets help agent to believe in benefit of life insurance. Such faith will enhance there determination to sell and their perseverance.

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Life insurance is not only the best possible way for family protection. There is no other way. Insurance is the only way to safeguard against the unpredictable risks of the future. It is unavoidable. The value of human life is far greater than the value of property only insurance can preserve it. Life insurance is not surpassed by many other savings or investment instruments, in terms of security, marketability, stability of value or liquidity. Insurance, including life insurance, is essential for the conservation of many businesses, just as it is in the preservation of homes. Life insurance enhances the existing standards of living. Life insurances help people live financially solvent lives.

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Life insurance perpetuates life, liberty and the pursuit of happiness.

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Unit Linked Insurance Plans (ULIPs) ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. ULIPs is allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis. Similarly ULIP investors have the option of investing across various schemes ,i.e., diversified equity funds, balanced funds and debt funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance component. However it should not be construed that barring the insurance element there is nothing differentiating mutual funds from ULIPs. ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you. Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency. REMEMBER THAT IN A UNIT LINKED POLICY, THE INVESTMENT RISK IS GENERALLY BORNE BY THE INVESTOR

Working of ULIPs It is critical that you understand how your money gets invested once you purchase a ULIP: When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some portion of the ULIP

premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a daily basis. Since the fund of your choice has an underlying investment – either in equity or debt or a combination of the two – your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium: One of the big advantages that a ULIP offers is that whatever be your specific financial objective, chances are that there is a ULIP which is just right for you. The figure below gives a general guide to the different goals that people have at various age-groups and thus, various life-stages.

Flexibility of ULIPs Most unit linked policy holders opt for ULIPs because of the flexibility they offer. There is an option of making lump sum investment or paying regular premiums using the systematic investment plans (SIP). In ULIPs also one can choose from annual, half-yearly, quarterly or monthly premium payment options to suit your financial needs. Additionally, as a unit linked policy holder, you have the option of investing your units across various fund options such as equity fund, balanced fund, debt fund and secure fund. During the tenure of your policy depending on your risk appetite you can also switch investments from one fund to another. This gives you the flexibility of customizing your investment plan.

Payment of premiums is discontinued

a) Discontinuance within three years of commencement – If all the premiums have not been paid for at least three consecutive years from inception, the insurance cover shall cease immediately. Insurers may give an opportunity for revival within the period allowed; if the policy is not revived within that period, surrender value shall be paid at the end of third policy anniversary or at the end of the period allowed for revival, whichever is later. b) Discontinuance after three years of commencement -- At the end of the period allowed for revival, the contract shall be terminated by paying the surrender value. The insurer may offer to continue the insurance cover, if so opted for by the policy holder, levying appropriate charges until the fund value is not less than one full year’s premium. When the fund value reaches an amount equivalent to one full year’s premium, the contract shall be terminated by paying the fund value.

Charges, fees and deductions in a ULIP 1. Premium Allocation Charge This is a percentage of the premium

appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses.

2. Mortality Charges These are charges to provide for the cost of insurance coverage under the plan. Mortality charges depend on number of factors such as age, amount of coverage, state of health etc

3. Fund Management Fees These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV).

4. Policy/ Administration Charges These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.

5. Surrender Charges Surrender charge may be deducted for premature partial or full encashment of units wherever applicable as mentioned in the policy conditions.

6. Fund Switching Charge Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge.

7. Service Tax Deductions Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.

Investors may note, that the portion of the premium after deducting for all charges and premium for risk cover is utilized for purchasing units

Unit Fund The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund.

Net Asset Value (NAV) NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on the website of the respective insurers.

Types of Funds ULIP Offer Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and time horizons. The following are some of the common types of funds available along with an indication of their risk characteristics.

1. Equity Funds Primarily invested in company stocks with the general aim of capital appreciation, risk is Medium to High.

2. Income, Fixed Interest and Bond Funds Invested in corporate bonds, government securities and other fixed income instruments, risk is Medium.

3. Cash Funds Sometimes known as Money Market Funds — invested in cash, bank deposits and money market instruments, risk is Low

5. Balanced Funds Combining equity investment with fixed interest instruments risk is generally Medium

BENEFITS OF ULIP ULIPs provide an opportunity for the discerning investor to benefit from the return available in their capital market without going for direct investments. CUSTOMER SATISFACTION:

Market to your own Customer: Giving a lot of thoughts to your marketing program aimed at current customer is one aspect of building customers royalty.

Use Complaints to build Business: When customers aren’t happy with your business they usually won’t complain to you-instead, they’ll probably complain to just about everyone else them – and take their business to your competition. That’s why increasing number of business are making follow-up calls of mailing satisfaction questionnaires after the sale is made. They find that if they promptly follow up resolve a customer’s complaint, the customer might be even more likely to do business then the average customer who didn’t have a complaint. REACH OUT TO YOUR CUSTOMER: Contact with current customer is a good way to Build their loyalty. The more the customer sees someone from your firm, the more likely you’ll get the next order. The more they know about you, the more they see you as someone out to help them, the more they know about your accomplishments-the more loyal a customer they will be. Building customer loyalty will be a lot easier if you have a royal workforcenot at all a given these days. It is especially important for you to retain those employees such as sales peoples, technical support, and the

customer-service people. Many companies give an attention to retaining sales people but little to support people.

ULIPs ARE SAFE

Security of Investments • •

AEGON Religare ULIPs invest across different asset classes-Equity debt & money market. Stringent investment norms mandated and monitored regularly by IRDA.

Advantages over financial Instruments • •

ULIPs are long-term protection-cum investment vehicles. Offer long- term financial solutions for multiple needs.

Flexibilities offered • • •

Choice of 4 funds with investment in diversified asset classes. Choice of switching investment a cross funds. Co. manages your hard earned money (you need not be an Expert financial investor)

Existing trends •

Longer the time spent in financial markets; higher are the Chances of reaping benefits.

Returns have out performed other investment options, such as Gold, silver, & government bonds* “it takes a lot less money to increase your retention of current customers then to find new ones-but to know I don’t give it as much effort as I should because it does take a lots of energy and effort!” “LIFE INSURANCE IS A WAY TO LIFE”

Company profile AEGON, one of the world’s largest life insurance and pension groups, Religare, one of India’s leading integrated financial services groups and Bennett, Coleman & Company, India’s largest media house, have come together to launch AEGON Religare Life Insurance Company Limited. This venture is dedicated to build a firm future, both for customers and employees and will continue to balance a local approach with the power of expanding global operation. We launched our pan-India multi-channel operations in July, 2008 with over 30 branches spread across India. Our business philosophy is to help people plan their life better. We provide high quality advice to our customers and offer superior customer. In an industry first, AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication. It is also the first company to include the customer’s medical report in the policy kit. .

The Parent Company AEGON, Religare and Bennett, Coleman & Company

About AEGON AEGON’s businesses serve over 40 million customers in over 20 markets throughout the Americas, Europe and Asia, with major operations in the United States, the Netherlands and the United Kingdom. With headquarters in The Hague, the Netherlands, AEGON companies employ almost 32,000 people worldwide. The company’s common shares are listed on four stock

exchanges: Amsterdam, London, New York and Tokyo. It manages EUR 351 billion in revenue generating investments. AEGON has more than 160 years of experience with its roots going back to 1844. It holds 26% equity in our company. • • • • • • • • •

Over 160 years of experience in the insurance business. Ranked the 5th largest insurance company in the world on revenues* One of India’s leading integrated financial services group Presenting 20 countries throughout the Americas, Europe, and Asia 4 crore customers worldwide. Track record of finding beneficiaries of policies &settling claims. Even in the wake of crisis in the financial world rated AA# by rating agency. Services in retail, wealth & institutional spectrums. Presence in more them 460 cities &towns &more than 1550 locations

About Religare Enterprises Limited Religare is a diversified financial services group of India offering a multitude of investment options. Financial services which Religare offers can be broadly clubbed across three key verticals - Retail, Institutional and Wealth spectrums. Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund. With a view to expand, diversify and introduce offerings benchmarked against global best practices, Religare operates in the wealth management space under the brand name 'Religare Macquarie Private Wealth'. Religare has a pan India presence, 1837 locations across 498 cities and towns. It also currently operates from nine international locations following its acquisition of

London’s brokerage & investment firm, Hichens, Harrison & Co. plc. (Now Religare Hichens, Harrison Plc). REL holds 44% equity in our company • • • • • •

One of India’s leading integrated financial service group with a pan India and global presence Has an active presence in more than 460 cities and towns with more than 1550 locations across India Made an IPO in Oct-Nov 2007 and was over subscribed by 160 times It launched India’s first holistic arts initiative including an Art Fund Inked India’s first wealth management joint venture with Macquarie Bank for its wealth advisory business Also launched India’s first Film Fund with Vistaar called Vistaar Religare Film Fund

About Bennett, Coleman & Co. Ltd. (BCCL) Bennett, Coleman & Co. Ltd. (BCCL), part of the mammoth Times Group, is

India’s largest media house. It reaches out to 2468 cities and towns all over India. The group owns and manages powerful media brands like The Times of India, The Economic Times, Maharashtra Times, Navbharat Times, Femina, Filmfare, Grazia, Top Gear, Radio Mirchi, Zoom, Times Now, Times Music, Times OOH, Private Treaties and indiatimes.com. All of its brands are multinational in outlook, traditional at heart and national in spirit. From the very first edition on November 3, 1838 the mammoth BCCL Group has come a long way. By way of the innovative venture of Times Private Treaties. By way of the innovative venture of Times Private Treaties the BCCL Group holds 30% equity in our company. • • • •

Owner of The Times of India Group One of the Largest media groups in the world Some of the prominent brands owned are Times of India, Economic Times, Times Now, Zoom TV, Radio Mirchi and Femina Turnover in excess of Rs.3360 crores

Launched with Impact Launched in July 2008 AEGON Religare Life Insurance Company is one of the fastest growing life insurance companies in India. Some of the key achievements are: • • • •

One of the few life insurance companies to successfully win the trust of 10,000 customers within first 6 months Launched operations with 38 branches across 32 cities in India, the highest by any insurance player in India First life insurance company in India to offer customers a convenient option of managing their accounts via the phone Launched the hugely successful K.I.L.B.(Kam Insurance Lene ki Bimari) advertising Campaign, which educated customers on the concept of Under-Insurance

Our Vision

“To help people to plan their life better” AEGON Religare helps people to plan their life in a better way by providing better life insurance plan to its customers. Being a new player in life insurance market it has to be innovative and make promotional programs.

Our Values   

To delight our customers through fresh approach innovative solutions and seamless delivery Better understanding our customers’ needs To provide refreshingly different ways of service

New Initiatives • • •

India’s first holistic arts initiative including an art fund India’s first Film Fund India’s first 360 degree content rich online investment portal

Launched the Corporate Services Group-a centralized advisory-led Referral group • • •

Launched Banc invest Channel, a co-managed distribution channel offering3-in-1 product (bank, trading and demat account) Inked India’s first wealth management joint venture with global major Macquire Bank The latest feather in the Religare hat is their foray into the Life Insurance market in partnership with AEGON

CHIEF EXECUTIVE OFFICER Rajiv Jamkhedkar Mr. Rajiv Jamkhedkar joined AEGON Religare Life Insurance Company Limited as its Chief Executive Officer in July 2007.

Rajiv Jamkhedkar has two decades of experience in Retail Financial Services in India. He has worked in all parts of the country – the North, South and Western India. Mr. Jamkhedkar started his career as a Management Associate at Citibank N.A. During the course of more than a decade, he worked in Service, Sales and Product management roles in a variety of businesses in Consumer Banking. During his last assignment at Citi, Mr. Jamkhedkar was head of Personal lending & SME segment, Citibusiness. His main achievement was that he quadrupled the balance-sheet in 5 years and made these as two of the most profitable businesses for the bank. Mr. Jamkhedkar has been involved in start-ups including a three year stint in HSBC, where he started up the Retail Assets division of HSBC in India. Mr. Jamkhedkar has a B.Tech Degree in Electronics Engineering from IT - BHU and an M.B.A. degree from Faculty of Management Studies, Delhi University.

BOARD OF DIRECTORS

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CHIEF EXECUTIVE OFFICER RAJEEV JAMKHEDKAR

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CHIEF FINANCIAL OFFICER & APPOINTED ACTUARY

K.S GOPALAKRISHNAN

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CHIEF INVESTMENT OFFICER SAIBAL GHOSH

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CHIEF MARKETING OFFICER YATEESH SRIVASTAVA

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AUDIT RISK & COMPLAINCE OFFICER DEBMALYA MAITRA

MAJOR COMPETETORS OF AEGON RELIGARE LIFE INSURANCE COMPANY

1. LIFE INSURANCE COMPANY LIMITED (LIC)

2. BIRLA SUN LIFE INSURANCE COMPANY LIMITED

3. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED

4. HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

5. TATA AIG LIFE INSURANCE COMPANY LIMITED

6. MAX NEW YORK LIFE INSURANCE COMPANY LIMITED

7. OM KOTAK MAHINDRA LIFE INSURANCE COMPANY LIMITED

8. AVIVA LIFE INSURANCE COMPANY LIMITED

9. ING Vysya LIFE INSURANCE COMPANY LIMITED

10. SBI LIFE INSURANCE COMPANY LIMITED

11. METLIFE INDIA LIFE INSURANCE COMPANY LIMITED

12. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED

STAR CHILD PLAN

PREMIUM GAIN PLAN

PROTECT GAIN PLAN

WEALTH PROTECT PLAN

PREMIUM GAIN PLUS PLAN

INVEST MAXIMISER PLAN

PENSION PLAN

Star Child AEGON Religare Star Child Plan To be able to meet your children’s needs and aspirations is what you always strive towards. AEGON Religare Star Child Plan aims to help you in doing just that. It not only makes provisions for your children’s future but also ensures that their future remains secured. This plan not only make provisions for your child’s future but also ensures that their future is remains secures in the event of your unfortunate demise, we assure a lump sum premium and waive off of future premium till maturity.

Features Waiver of Premium In the event of your unfortunate demise we assure a lump sum payment and waive off all future premiums till maturity. Invest Protect Option If you opt for Invest Protect option, it will not only help you gain from your investment but also minimize the risk of returns as your policy nears maturity. It aims to protect your money by systematically shifting the Fund from the Enhanced Equity Fund to the Secure Fund during the last 3 policy years. Auto-rebalancing At the end of every policy year, this feature automatically rebalances the allocation of your investments in various funds to the original proportions you had chosen.

Switch This feature helps you shift your investments from one fund to another. Four switches are free in a policy year. Maturity On maturity, you receive the fund value existing on maturity. If you do not wish to take the entire maturity amount at one go, you can avail of the Settlement Option. 4 Fund Options You have the option of choosing from 4 funds – Secure, Debt, Balanced and Enhanced Equity Fund. Partial Withdrawal You or the nominee after death of the Life Assured can partially withdraw your money after first 3 policy years. The maximum amount of partial withdrawal in any policy year is 50% of the fund value at the beginning of that policy year. You can also avail of AEGON Religare Star Child Plan’s Systematic Partial Withdrawal facility by which we redeem units periodically from your unit account and credit the money to your bank account. You can opt for systematic partial withdrawal frequency, say monthly or quarterly for the duration you choose.

Benefits • • • • • •

Choice of investment fund. Option of withdrawals. Option of transfer fund Option to top-up investments Liquidity as per requirements Tax benefit

Get the dual benefit of securing your family financially as well as saving for a brighter future with our ULIP plans

AEGON Religare Protect Gain Plan Your life has many phases and it changes with time. But it doesn't have to be a financial roller coaster ride for you. Life, if systematically managed,

can constantly keep changing for better, leading only to a more secured tomorrow. AEGON Religare Protect Gain plan aims to do just that for you. Protection plans are Term Plans which provide only life cover. These plans can help you get adequately covered and secure your family financially in case of unfortunate event. These are low cost life insurance plans. If you opt for Invest Protect option, it will not only help you gain from your investment but also minimize the risk of returns as your policy nears maturity. It aims to protect your money by systematically shifting the Fund from the Enhanced Equity Fund to the Secure Fund during the last 3 policy years.

Features and Benefits Auto-rebalancing feature, at the end of every policy year, automatically rebalances the allocation of your investments in various funds to the allocation proportions chosen by you.

Special Units You will earn additional special units if your policy term is 15 years or more. The special units will be added to your account at the end of 10th year and every 3rd year thereafter. The value of special unit would be equal to 1.50% of the average fund value of the last 36 months before the allotment of special units.

AEGON Religare Wealth Protect Plan A plan that ensures, that you never miss an opportunity to maximise the gains and shields it during down turn. AEGON Religare Wealth Protect Plan guarantees that the returns will not dip below 80% of highest NAV during the policy term.

Key Features

NAV Protector Fund - The NAV Protector Fund aims to maximise gains from your investments and at the same time protect such gains from eroding. The premiums allocated to the NAV Protector Fund will be invested in a mix of equity and money market instruments. The proportion of equity will be dynamically managed according to a predefined rule. Reset Days - Every Friday will be the reset day for the Wealth Protect Plan. Special NAV - Special NAV is 80% (Eighty percent) of the highest NAV declared on any reset day. Refer to the Terms & Conditions to understand how a special NAV is calculated for Regular Premium and Top-Up Premium. Special fund value - Special Fund Value is calculated as, higher of the NAV as on date or the Special NAV multiplied by the number of units in your unit account i.e. (Higher of NAV as on date or Special NAV) x Number of Units.

Key Benefits On Maturity - On maturity, you receive the Special Fund Value (as explained above) as on maturity date plus Special Addition. Partial withdrawal - You can partly withdraw your money after the first 3 policy years. The minimum amount of partial withdrawal is Rs. 5,000 and the maximum amount of partial withdrawal allowed in any policy year is 20% of the fund value at the beginning of that policy year.

Surrender - You can surrender the policy any time after the first 3 policy years. Surrender Value is Special Fund Value minus the surrender charges. Death - In case of your unfortunate demise during the policy term, your nominee will receive the Sum Assured or the Special Fund Value, whichever is higher. For further details, refer to Terms and Conditions.

AEGON Religare Premium Gain Plan You've always worked hard to give your family nothing but the best. But growing expenses, never-ending price hikes and inflation make most of your plans difficult. Which is why, it becomes all the more important to invest and set aside that little something for whatever may come your way. AEGON Religare Premium Gain Plan helps maximise your investments and gives you the best possible returns.

Advantage It will not only help you gain from your investments but will also minimize the risk on your returns as your policy nears maturity.

It aims to protect your money by systematically shifting the units from Enhanced Equity Fund to the Secured Fund during the last three policy years.

BENEFITS • • • • •

Choice of investment funds Option of withdrawals Option to transfer Funds Option to top-up investments Tax benefit

Have money but no time to spend it? Ensure that it is not the other way round tomorrow. Know how much pension you would require when you retire and start saving for your retirement today.

AEGON Religare Premium Gain Plus Plan You've always worked hard to give your family nothing but the best. But growing expenses, never-ending price hikes and inflation make most of your plans difficult. Which is why, it becomes all the more important to invest and set aside that little something for whatever may come your way. AEGON Religare Premium Gain Plus Plan helps maximize your investments and gives you the best possible returns.

AEGON Religare Invest Maximiser Plan AEGON Religare Invest Maximiser Plan aims to maximize your investment with the lowest possible premium allocation charges. AEGON Religare

Invest maximiser not only maximizes investment but also provides you necessary protection.

AEGON Religare Pension Plan Today, you are living comfortably. There is a regular inflow of income and your bills are paid on time. However, the future will be different. Rising inflation will affect the price of the smallest of items. AEGON Religare Pension Plan provides you with a regular pension that will help you take care of the much needed basic necessities, post-retirement.

AEGON Religare Intra Pension Plan All your life, you strive hard and make sure you earn enough and more to ensure that you and your family get the best of everything. Why should your post-retirement life be any less? It will not only help you gain from your investments but will also minimize the risk on your returns as your policy nears maturity. It aims to protect your money by systematically shifting the units from Enhanced Equity Fund to the Secured Fund during the last three policy years. Critical Illness Rider, Accidental Death, Disability, Dismemberment Rider

BENEFITS • • • •

Choice of investment funds Option of withdrawals and to transfer Funds Tax benefit Option to top-up investments

SWOT analysis of the Company STRENGTHS: • • • • • • • •

AEGON has over 160 years of experience in the insurance business Religare is one of India’s leading integrated financial services group in India Highly successful ad campaign K.I.L.B. Advance information technology in extensive use

Has strong commands &popularity in pension plan. Joint venture with Bennett & Coleman gives prestige to popularity of co. Worldwide distribution network Provides a good range of unit linked products(ULIP) to its customers

WEAKNESSES: •

• Loose departmental Structure • Being a new entrant in India the awareness is low about co No decentralization of AEGON Life Insurance Co. • Less number of offices in the country

OPPORTUNITIES:

• • •

Wide geographical reach Still large numbers of people are required to be insured in India. Since India is a developing country, it can be seen as a high potential area

THREATS: • • • •

Close competition in premium and commission charged Large Competition Being a late entrant in India, the life insurance market has been already exhausted by others The brand is yet to gain popularity

METHODOLOGY Data Collection Method In the present research data was collected mainly through Questionnaire method. However being a qualitative research, it demanded face-to-face information to some extent. So the data was collected partly through the interview method. A questionnaire relevant to the research problem was developed .The questionnaire included questions on investment objective, type of plan, duration of investment, preferred area of investment, considerations while choosing a fund etc. The finalized questionnaire was personally explained to each customer through personal visit to them. Thus the structured questionnaire and unstructured interview were used as the instruments of data collection.

Sampling Convenience Sampling Method has been used in the research, at hand. Firstly I selected the UNIVERSE which comprised of the surrounding areas of the location of AEGON Religare Life Insurance Co.-Maldahiya Varanasi. The sample units (customers) were selected randomly from the whole universe. The sample unit was selected individually by me in order to impart maximum accuracy in the research work.

Sample size The size of the sample (random) was 100. The sample comprised of 100 individuals comprising in the income group of more than or equal to Rs.3 lakh p.a. and has crossed the age of 25 years. This characteristic was purposely selected, because of following reasons:

•

A person falling in such income group has the ability to save and invest

•

A person of 25 years or more has specified objectives to pursue in his life

Fieldwork The fieldwork was performed in the form of data collection.

The exercise

involved, filling up of the questionnaires by the customers, detailed face-toface conversation, on the spot interviewing and simultaneously reading the reactions of the respondents.

All the details were recorded objectively. On the whole, the fieldwork was done unto maximum accuracy from my side but some discrepancy might have crept in which has already been mentioned under the heading - limitations.

Analysis After the completion of data collection, the analysis of data took place. Under this section in-depth and elaborate analysis of the data as well as of the gathered information was done which was followed by the interpretation and recommendations. The interpretation of data has been presented in report in the form of case studies of individual clients. Most of the items of the questionnaire are related to the attitude measurement of customers towards Unit Linked Insurance Plans (ULIPs).

HOW MANY INVEST

no 34%

yes 66%

Analysis After analyzing the information, of data collected from visited customers, it was found that out of 100 people only 66 invest their savings, while 34 do not invest and keep cash idle in their lockers. Those who are investing do not have complete information about various financial products available in the market.

PREFERENCE OF INSURANCE FOR INVESTMENT PURPOSE

no 52%

yes 48%

Analysis After analyzing the information, of data collected from visited customers, it was found that out of 100 around 48 preferred insurance for making investments.

Whereas the others, viz., 52 did not liked insurance as the area of their investments.

AWARENESS ABOUT AEGON RELIGARE LIFE INSURANCE COMPANY

yes 22%

no 78%

Analysis

After analyzing the information, of data collected from visited people, it was found that out of 100 people, 22 were aware about AEGON Religare while others have hardly heard about the company,

OBJECTIVE OF INVESTMENT IN ULIP

Retirement 28%

Child Education/ Marriage 20%

Analysis

Dream Home 13%

Tax Planning 39%

After analyzing the information, of data collected from visited people, it was found that the major objective for investments in ULIPs is tax planning, while retirement and child education/marriage are secondary.

TIME HORIZON FOR MAKING INVESTMENT 35 29

30 24

25

22

under 2 years

20

2-5 years 16

15

6-10 years 11-15 years over 15 years

10

9

5 0 1

Analysis After analyzing the information, of data collected from visited people, it was found that most people either chose 2-5 years or 6-10 years or 11-15 years time period for investing their funds.

While hardly 25% chose the extreme less than 2 years or over 15 years time period for investing their funds.

OPINION WHILE MAKING INVESTMENT

37

consultant

18

family

friends

own

11

34

Analysis After analyzing the information, of data collected from visited people, it was found that out of 100 people 37 take the opinion of financial

consultants, while 34 do not take opinions from anyone. Only 29 consult their family and friends.

PREFERRED FORM OF MAKING INVESTMENT 30 25

27 24 20

20 16

14

15 10 5 0 Traditional Plans

Analysis

Mutual Funds

FDs

Shares

ULIP

After analyzing the information, of data collected from visited people, it was found that still FDs are popular in Varanasi followed by traditional plans and shares, while mutual funds and ULIPs are new for them.

FACTORS CONSIDERED WHILE SELECTING A FUND Fund's Objective 27%

Fund Manager 16%

Fund House 24%

Past Returns 33%

Analysis

After analyzing the information, of data collected from visited people, it was found that past returns is the important factor while selecting a fund. Whereas the objective of the Fund and the reputation of Fund house are also the relevant considerations while selecting a fund.

FACTORS CONSIDERED WHILE MAKING INVESTMENT IN ULIP

Tax Saving 32%

Risk Cover 16%

Analysis

Returns 28%

Safety 24%

After analyzing the information, of data collected from visited people, it was found that tax saving and returns on investment are major considerations while making investment.

Conclusions and Recommendations Conclusions 1. There are still large numbers of people who do not invest their savings and keep them idle. 2. Around half of the people consider insurance as a good area for investing their funds. 3. Even being a late entrant in a highly competitive insurance market AEGON Religare is well aware among customers. 4. Tax Planning is the major objective for the purchase of ULIPs followed by Retirement and Child education/marriage. 5. In India people prefer to invest their funds for long terms especially for period above 5 years. 6. The survey has shown that customers are quite concerned about their funds and thus take financial consultant’s advice before making investment. 7. Indian investors are conservative and invest in FDs and traditional plans. 8. But there are a majority of investors who are switching towards Mutual Funds and ULIPs. 9. Today’s investor is educated and invests in ULIP after considering a number of factors like Fund’s objective, reputation of the Fund, past returns, etc. 10.

Safety returns and tax saving ability of a ULIP influence the decision making ability of customers.

RECOMMENDATIONS Awareness about the Company AEGON Religare is quite a late entrant in the life insurance industry, but due to its extensive promotional programs it is gaining awareness. Pre-Purchase Queries For a life insurance company it is useful to allow their prospective customers to remove all their queries before any sale of policies. Customer-Service ULIPs are prone to market changes. Thus, the customer needs to be informed about it regularly through annual report, covering the fund performance market developments etc. which should include fund performance analysis, investment portfolio of the fund, investment strategies and risk control measures adopted. Level of Satisfaction As per the findings of the survey undertaken, the level of satisfaction for AEGON Religare ULIPs is neither too high nor too low. So a great deal of effort is needed to garner the goodwill of the client.

Customer Service 1) ARLC should try to maintain more close and convincing relationship with its customers. It is a very essential element in industrial marketing.

2) The customer should be provided all information in details as well as should be acquainted with the facilities and schemes available such as Annual Reports, Fund’s performance Analysis, etc. 3) The concerned authorities should strictly follow the time schedule regarding the issue of policy. 4) After sales service should be made more regular and sharp. 5) Customer support department should be expanded in terms of expertise and personnel. Simultaneously it should be furnished with new technology in order to make the customer support system more active and improved.

Comments 

Unit Linked Insurance Plans (ULIPs) have emerged as a hybrid

insurance product which combines the features both of an insurance plan and a mutual fund. It has provided customers the insurance cover and an opportunity to participate in the gains of capital market.



ULIPs also provide the tax incentive to its customers. They can be

provided through various product lines viz. child plans, retirement plans, pension plans, etc. to satisfy the different needs of customers. 

Although AEGON has 160 years of experience in pension it is yet to

gain popularity in India.

In the present scenario the competitors of

AEGON Religare Life Insurance Company (ARLC) are coming out as mushrooms. 

In such a highly competitive market ARLC must find a way to get itself

noticed out of the bunch. As far as Retirement Plans and Child Plans are concerned these are well known among customers. The Protect Gain Plan is high return oriented plan and businessmen prefer this plan.

QUESTIONNAIRE 1. Do you invest? Yes

No

2. Will you prefer insurance for investment purpose? Yes

No

3. Do you have any insurance plan? Yes

No

4. If yes, then name the company? ----------------------------------------------------------------5. Are you aware about AEGON Religare Life Insurance Company? Yes No 6. What is your Investment objective in ULIP? Dream Home Tax Planning Child Education/ Marriage Retirement 7. Time horizon in which you have to achieve your financial goal?/how long do you plan to invest your money? Under 2 years 2-5 years 6-10 years Over 15 years 8. Whose opinions do you take while making your investments? Own Friends Family Investment Consultants

9. Most preferred form of investment? Traditional Plans Mutual Funds FDs

Shares ULIP 10. And why? ------------------------------------------------------------------------------------------------------11. What factors you consider before choosing a Fund? Fund Manager Reputation of Fund House Past Returns Investment objective of the Fund 12. Rank the following factors while making investment in ULIP? Returns Safety Risk Cover Tax Saving

BIBLIOGRAPHY Websites



www.AEGONReligare.com



www.IRDA.com



www.insurancemagic.com

BOOKS  Research methods and methodologies-C.R Kothari  Marketing management-Philip Kotler  Insurance Principles and Practices-M.N. Mishra  Principles of Insurance-Motihar  IC-33