“A STUDY ON LIFE TIME SUPER PLAN OF ICICI PRUDENTIAL LIFE INSURANCE CO. LTD”.

Exam No.: MBA06004046

Roll No.:

KARNATAK

UNIVERSITY

DHARWAD Shri. B.V.V.Sangha’s

INSTITUTE OF MANAGEMENT STUDIE’S, BAGALKOT 2006-2007 PROJECT TITLE “A STUDY ON LIFE TIME SUPER PLAN OF ICICI PRUDENTIAL LIFE INSURANCE CO. LTD”. External Guide:

Internal Guide:

Mr. Naveen Kumar Naidu

Mr. Subramaniam

SUBMITTED BY Miss. Sapna N Pattanshetti

SHRI B.V.V.SANGHA’S

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 1

INSTITUTE OF MANAGEMENT STUDIES BAGALKOT-02

CERTIFICATE OF APPROVAL

PROJECT REPORT 2006-2007

This is to certify that the project report entitled “A

Study on LIFE TIME SUPER

plan of ICICI Prudential

Life Insurance Co.Ltd.”. Is being submitted by Miss. Sapna N.Pattanshetti satisfactorily fulfillment

of

,a

student

completed MBA

of

MBA

the project

Course

under

first

year.

She

work for the Karnataka

has

partial

University,

Dharwad.

INTERNAL: Prof. SUBRAMANIAM

DIRECTOR: Prof. SUBRAMANIAM

Examiners: 1.

2.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 2

DECLARATION I here by declare that this project report titled “ A study on Life Time Super plan of ICICI Prudential Life Insurance Co.Ltd.”, under taken at ICICI Prudential Life Insurance Co, LTD, Hubli, submitted by me in partial fulfilment for the degree of

“ Master of

Business Administration” of Karnataka University ,Dharwad for the academic year 2006- 07 is genuine and bonfied work. To the best of my knowledge and belief the matter is not submitted earlier for the award of any degree either to Karnataka University, Dharwad or any other University. DATE: PLACE:

SAPNA N. PATTANSHETTI MBA II Semester

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 3

ACKNOWLEDGEMENT This project gives me an opportunity to express my heartly thanks to those who helped me directly or indirectly in the completion of project report. I would like to express my gratitude Mr. SHRINIVAS JANGAL for their kind permission to take this project at their esteemed organization. I express my sincere gratitude to Mr. Naveen Kumar Naidu, UNIT MANAGER of ICICI Prudential Life Insurance Company Ltd. Hubli.They guided me in each and every step, and also helped to make the project report successfully and I also thank the Staff of ICICI Prudential Life Insurance Company. I would like to express my deep sense of gratitude to our beloved director and my guide Prof. SUBRAMANIAM ,for his excellent guidance and constant inspiration and support. And also I would like to thanks all the faculties of the institute. I express my sincere thanks and dedicate my work to my parents and friends who have been always a moral support and strong pillars at all works of my life.

SAPNA N. PATTANSHETTI MBA II Semester

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 4

CONTENTS Part-I i.

Executive summary

ii.

Company Profile

iii.

Objective of the study

Industry Profile

Part-II

Functional Analysis Plan Analysis

Part- III 1. Findings 2. Suggestions 3. Conclusion. 4. Annexure

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 5

PART I

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 6

EXECUTIVE SUMMARY India's Number One private life insurer, ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies and Prudential plc- a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

Life Time Super policy is a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable to meet long-term financial objectives. In addition, Life Time Super also provides the protective benefit of an insurance cover, which keeps family secure, always. In this plan the policy holder has the flexibility to do withdrawal at the different lifestages depending upon the needs.

From the study suggest the investors that , as the Life Time Super is a better tool for integrated financial planning investing in Life Time Super creates asset by providing flexible choice of funds to invest, it accumulates the asset by having the flexibility of increasing investor accumulation by putting in extra premium whenever investor have some money to put in. It also provides some other features like riders which protects the health of the investor and meets the needs of Life stages. It has different benefits like switching options, maturity benefit and death benefits. From the study conclude that Life Time Super is a better as compared to any other plans. It takes care of the investment and provides the protection against the health hazards. Thus Life Time Super is the product that satisfies totally a different set of needs and death benefit as a multiple of the annual premium .Thus, this is how Life Time Super helps an investor to create, protect, and accumulate his investments.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 7

OBJECTIVE To study how Life Time Super plan is an Asset Creation,Asset Protection and Asset Accumulation for investor. DATA COLLECTION APPROACH: Primary Sources:

a)

Interaction with policyholder

Secondary Sources: a)

Company Websites

b)

Company Magzines , reports and publications

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 8

INDUSTRY PROFILE Life Insurance Market in India 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 standards adopted by some players against the consumers, nationalised 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 players to usher in competition and bring more choice to the consumer.

The objective was to improve the penetration of insurance as a percentage of GDP, which remains low in India even compared to some developing countries in Asia. Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which has put in place regulations in line with global norms. So far in the private sector, 12 life insurance companies and 9 general insurance companies have been registered.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 9

COMPANY OVERVIEW

India's Number One private life insurer, ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies-and Prudential plc- a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. They began their operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, their nation-wide team comprises of over 580 offices, over 234,000 advisors; and 22 bancassurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times. As they grow their distribution, product range and customer base, they continue to tirelessly uphold their commitment to deliver world-class financial solutions to customers all over India.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 10

ABOUT THE PROMOTERS ICICI BANK It is India's second largest bank and largest private sector bank with over 50 years presence in financial services and with assets of over Rs 3446.58 bn as on March 31, 2007. The Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, private equity and asset management. ICICI Bank is a leading player in the retail banking market and services its large customer base through a network of over 950 branches and extension counters, 3300 ATMs, call centers and internet banking to ensure

that customers have access to its services at all

times.

PrudentialPlc Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 20 million customers, policyholder and unit holders and manages over £251 billion of funds worldwide (as of 31 December 2006). In Asia, Prudential is the leading European life insurance company with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam. Prudential is the second largest retail fund manager for Asian as at June 2006. Its fund management business has expanded into a total of ten markets : China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 11

What makes ICICI Prudential No. 1 The ICICI Prudential edge comes from their commitment to their customers, in all that they do - be it product development, distribution, the sales process or servicing. Following are the important points to know what makes ICICI Prudential No.1 1. Their products have been developed after a clear and thorough understanding of customers' needs. It is this research that helps them develop Education plans that offer the ideal way to truly guarantee child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after retire, or Health insurance that arms customer with the funds they might need to recover from a dreaded disease. 2. Having the right products is the first step, but it's equally important to ensure that their customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute their products 3.

Risk management and underwriting practices form the core of their business. With clear guidelines in place, they ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process.

4. Entrusted with helping customers meet their long-term goals, they adopt an investment philosophy that aims to achieve risk adjusted returns over the longterm. 5. Last but definitely not the least, their 16,000 plus strong team is given the opportunity to learn and grow, every day in a multitude of ways. They believe this keeps them engaged and enthusiastic, so that they can deliver on their promise to cover customer, at every step in life.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 12

VISION OF COMPANY

To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service.

VALUES OF COMPANY : Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. The success of the company will be founded in its unflinching commitment to these 5 core values. Each of the values describe what the company stands for, the qualities of company people and the way they work

Customer First Own the customer, deliver the promise 1.

Keep customer interest in the center of the all delusions.

2.

Promise what customer can deliver it to finish.

3.

Proactively seek voice of customer and act on it.

Boundaryless Never say “its not my job” 1.

Offer help and ensure business success functions to ensure business success.

2. 3.

Seek and shall ideas freely

Recognize and respect internal customers.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 13

Ownership It is to be , it is up to me 1.

Take responsibility and see tasks through to completion.

2.

Own mistakes, learn from failures.

3.

Be a team player ownership for team performance.

Passion Boundless energy and enthusiasm 1.

Exhibit winning instinct.

2.

Demonstrate speed and urgency for achieving result.

3.

Challenge status quor do things differently.

Integrity Be honest and fair in what you say and do 1.

Practice what you preach.

2.

Stand up honesty and fearlessly for what is right.

3.

Act in a consistent and aquitable manner.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 14

Company hopes to Achieve • Understanding the needs of customers and offering them superior products and service

• Leveraging technology to service customers quickly, efficiently and conveniently • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders

• Providing an enabling environment to foster growth and learning for our employees

• And above all, building transparency in all our dealings.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 15

Organization chart of ICICI Prudential Life Insurance

Branch manager

Sales Manager

Unit

Unit

Sales Manager

Unit

Unit

Unit

Manager Manager

Manager

Manager Manager

Advisor

Advisor

Advisor

Advisor

Advisor

Unit Manager

Advisor

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 16

MANAGEMENT COMMITTEE Board of Directors The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K. V. Kamath, Chairman Mr. Barry Stowe Mrs. Chanda Kochar Mrs. Kalpana Morparia Mr. H.T. Phong Mr. M. P. Modi Mr.R Narayanan Mr. Keki Dadiseth Mrs. Shika Sharma, Managing Director Mr. N.S.Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 17

Management Team Mrs. Shika Sharma , Managing Director & CEO Mr. N.S. Kannan Executive Director Mr. Bhargav Dasgupta Executive Director Mrs. Anita Pai , Chief customer service And Techonology Mr. Azim Mithani , Chief Actuary Mr. Puneet Nanda Chief Investments Officer Mr. Binayak Dutta, Chief – Sales And Distribution

Distribution ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. As of January 31, 2007 the company has over 540 offices across the country and over 200,000 advisors. The company has over 20 bancassurnace partners, having tie-ups with ICICI Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Idukki District Co-operative Bank, Jalgaon Peoples Co-operative Bank, Shamrao Vithal Co-op Bank, Ernakulam Bank and 9 Bank of India sponsored Regional Rural Banks (RRBs). It has also tied up with NGOs MFIs and corporates for the distribution of rural policies

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 18

PART II

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 19

DEPARTMENTS OF ICICI PRUDENTIAL 1.1

Sales & Distribution This section is divided into four parts: •

Managers Utilities – in section one will find important announcements for

managers, tools like pre-recruitments profiling, managers related initiatives, etc. •

Advisor Utilities – this section will hold advisor related tools like,

electronic benefits illustration, advisor Initiatives, Important announcements, statutory changes that affect advisor, etc. •

Contests – details off all current contests that are running will be found

under this heading. •

Contests Updates & Results – Updates of all contest & results declare will

be available for view in this section •

Group – information on the group products, printable pre quote &

application forms, etc.will be hosed in this section.

1.1.

Bancassurance & Alliances Bancassurance or Banca as is it is commonly known includes our Bank

partners. The corporate agents and the alliance partners from the other member of the team. The business philosophy at B&A is to leverage distribution synergies with their partners and value to the business of both.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 20

1.2

Finance

MIS reviews current roles, Planning evaluation next goals, Internal audit assesses that rules are met, Compliance handles the Regulatory net, CCU advisor cost trends, Distribution payouts handles Sales spends, EPU keeps customers thrilled, Investments Operation measured the coffers filled, Accounts provides the overall view, That’s the 9-jewels team for you; The CFO is at the helm, Now, let’s get to know each of them!!! Planning & MIS – monitoring of Organization performer Sales, Quality, trends – on a continuous basis. With insights into MIS, socio economic factors & competitors behavioral patterns, they contribution to sales targets, strategic initiatives, projected branches, projected work force …the ahead!!! Internal Audit – Risk Management, Business Continuity Plan, Best practices, policy manuals are not mere words on paper ….adhere to them. We ensure ‘practice what you preach’!!!! Compliance –‘We ensure that every action is within the regulator framework!!!’ CCU-‘we ensure that every rupee is spent economically, prudently, cost effectively!!!’ Distribution payouts – ‘we roll out commission payouts, referral, bonuses, contest spends & effectiveness…. Basically the sales goodies!!!’ EPU- Cost discipline, expense processing vender payments, reimbursement, salary payouts….they handles E-TRACK!!!

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 21

Investment operation –they being the custodian of investments, benchmark our performance with the best in the industry. They manage the cash flow!!! Accounts – financial Accounting, Expense provisioning, Income Accruals…they strive on the excellence & transparency of our systems & controls, to keep the auditors, customers & shareholders assured that the financial story is said right!!! ‘Driven by sheer professionalism, we strive relentlessly towards our Organization Vision.’ Together we can….and will make a difference!!!

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 22

1.4 Human Resource:

•

Performance Management They are committed to creating a performance driven culture through effective management of performance of all staff members in a way that is mutually beneficial. They drive the same by linking individual performance objectives to business objectives and evaluating performances consistently and fairly.

•

Training & capability Development Programs The focus of training & capability Development Programs is to develop key competencies & skill among staff members so as to facilitate attainments of full people potential. The various capability Development programs are fast tax. Advantages, Grand Slam specifically designed for UMS, FSCs and Executives respectively. •

HR Policies & Procedures The Policies and procedures laid down here promote the philosophy of the Company with regard to standards of excellence; terms of employment; employment Development; and employment services. The objective of the section is to inform the policies related to Travel, Compensation, Med claim, Transfers etc…

1.5 Information Technology Various IT initiatives under taken at ICICI Prudential are aimed at strengthening the bond between the business and the use of technology. There are 4 solution groups which are aligned with the different function of the company.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 23

The Life Asia Solution Group Team managing Life Asia is core policy system. Life Asia is a proven, reliable system operating on robust software, and on a hardware platform providing ease of use. It provides the flexibility in designing better product offerings to end – user. This solution group also, manages the group solution software packages. A critical aspect of our every day work lives is IT infrastructure and that is managed by sub group in the Life Asia solution group. All the forward thinking business are headed for web, as web presence integrated with back end system allows for a strong self-service paradigm to be built for customers and partners. We have solutions Group- Web which is constantly trying to provide realtime information to our CRM initiative using the Goldmine packages, catering to the Sales Force for lead management, and to customer’s services, for handling quires/complaints/request. Our group also has an architect who is in charges of developing and maintaining a blueprint for the enterprise as a whole. This team works as an in house R&D Solution group, exploring various tech initiatives for the future. Finally, our Corporate Solution Group caters to the information needs of the corporate function like HR and financial. This team also works towards running initiatives to drive up usages and derive returns on our IT investments.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 24

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 decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA’s online service 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.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 25

Insurance plans at a glance Broadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail of both segments.

Unit Linked Insurance Product ULIPs have gained high acceptance due to attractive features they offer. These include: 1. Flexibility •

Flexibility to choose Sum Assured.

•

Flexibility to choose premium amount.

• Option to change level of Premium /Sum Assured even after the plan has started. • 2.

Flexibility to change asset allocation by switching

between funds

Transparency •

Charges in the plan & net amount invested are known to the customer

•

Convenience of tracking one’s investment performance on a daily basis.

3.

Liquidity

• Option to withdraw money after few years (comfort required in

case of

exigency)

4.

•

Low minimum tenure.

•

Partial / Systematic withdrawal allowed Fund Options •

A choice of funds (ranging from equity, debt, cash or a combination)

•

Option to choose your fund mix based on desired asset allocation

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 26

Traditional Plans These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1.

Steady Investment



Major chunk of investible funds are in debt instruments



Steady and almost assured returns over the long term 2. Features  Death benefit is Sum Assured + guaranteed & vested bonus  Helps in asset creation as they are for a long tenure  Premium to Sum Assured ratios are fixed for each plan and age.  Generally withdrawals are not allowed before maturity

Products Insurance Solutions for Individuals

ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions

These solutions give the customer the dual benefit of protection along with the potentially higher returns of market-linked instruments.

CashPlus

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 27

It is a transparent, feature-packed savings plan that offers 3

levels of protection as well

as liquidity options

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 28

Save'n'Protect It is a traditional endowment savings plan that offers life protection along with adequate returns.

CashBak It is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years

LifeTime Super & LifeTime Plus These are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options - Preserver, Protector, Balancer and Maximiser. Life Time Super policy is a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable to meet long-term financial objectives. In addition, Life Time Super also provides the protective benefit of an insurance cover, which keeps family secure, always. LifeTime Plus-is the only unit-linked plan that provides the family with both, Sum Assured AND Fund Value. Both these amounts ensure customer loved ones remain financially secure, regardless of life's uncertainties. This ideal wealth creation plan also serves as a protective insurance cover.

LifeLink Super It is a single premium unit linked insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. It works best for investors who have in mind long-term financial goals, such as the education of a child or the purchase of a larger home.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 29

Premier Life Gold It is a limited premium paying plan specially structured for

long-term wealth

creation. It Is one of the finest wealth creation plans available, Premier Life Gold provides with the benefit of paying premiums for a brief period but enjoying the benefits of cover and potentially higher returns over the long run. simply, Premier Life Gold ensures customer to enjoy long-term benefits even when they make short-term investments.

Invest Shield Life New It is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation.

InvestShield Cashbak It is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options

Protection Solutions LifeGuard It is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 30

HomeAssure It is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

Child Plans Education insurance Under the SmartKid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. SmartKid plans are also available in unit-linked form - both single premium and regular premium.

Features and benefits of SmartKid SmartKid offers an exclusive choice of 3 education insurance plans: SmartKid New Unit-linked Regular Premium, SmartKid New Unit-linked Single Premium and SmartKid Regular Premium. 1.

SmartKid New Unit-linked Regular Premium

SmartKid New Unit-linked Regular Premium is a unit-linked plan, which enables parent and their child to accumulate wealth by virtue of the performance of the underlying market-linked instrument.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 31

Features Premium: The minimum premium to be invested is Rs. 10,000 per annum. After deducting premium allocation charges from the premium, the remaining amount will be invested in a fund of their choice. Sum Assured: The minimum Sum Assured that the policyholder can opt for is Term * Annual Premium/2, subject to minimum of Rs 1 lac. Policy term: The term of the policy will be calculated as the difference between child's current age and the age of child when the policy matures. Mortality, Policy Administration charges: These and other charges will be deducted from the units in the fund. 2.

SmartKid New Unit-linked Single Premium SmartKid New Unit-linked Single Premium works in much the same way as

SmartKid New Unit-linked Regular Premium policy mentioned above. The only different feature is the premium amount will be required to pay only a single premium, which starts at as low as Rs. 50,000

3. SmartKid Regular Premium Flexible investment option: Choosing the amount of premium with which you wish to safeguard child's education. Flexible policy tenure: The tenure of the plan will be calculated as the difference between child’s current age and his or her age at which the policy matures. Flexible premium options: The premium will be calculated based on 3 factors: Sum Assured, policy tenure and your age.

Guaranteed bonus: A guaranteed bonus of 3.5% per annum is declared for the first 4 premium paying years plus an annual vested bonus declared in subsequent years.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 32

Retirement Solutions ForeverLife It is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually.

LifeTime Super Pension It is a regular premium unit linked pension plan that helps one accumulate over the long term and offers an annuity option (guaranteed income for life) at the time of retirement.

LifeLink Super Pension It is a single premium unit linked pension plan.

Health Solutions Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 33

Cancer Care: It is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions.

Diabetes Care: Diabetes Care is the first ever critical illness product specially for individuals with Type 2 diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover

Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for

companies seeking to

enhance benefits to their employees.

Group Gratuity Plan: ICICI Pru's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations.

Group Superannuation Plan: ICICI Pru offers both defined contribution (DC) and defined benefit (DB) superannuation schemes to optimise returns for the members of the trust and rationalise the cost. Members have the option of choosing from various annuity options or opting for a partial commutation

of

the

annuity

at

the

time

of

retirement.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 34

Group Immediate Annuities: In addition to the annuities offered to existing superannuation customers, we offer immediate

annuities

to

superannuation

funds

not

managed

by

us.

Group Term Plan: ICICI Pru's flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options Riders are extra benefits attachable with the main policy, which provides added protection against specific risks at a nominal extra cost.

Features of Riders  Riders can be attached to policies from the beginning or on policy anniversary date.

 Once attached, a rider can be discontinued at a later date.  The combined premiums of all riders attached to a policy cannot be greater than 30% of the premium of the basic plan

 The sum assured of an individual Rider cannot Exceed Rs.10 Lakh and cannot exceed the sum assured of the basic plan.  Riders are pure risk covers and hence have no maturity benefits. ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 35

Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while travelling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.

Critical Illness Benefit: It protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.

Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmarKid and CashPlus.

Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with LifeTime Super, LifeTime Super Pension and CashPlus.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 36

Life Time Super Life Time Super policy is a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable to meet long-term financial objectives. In addition, Life Time Super also provides the protective benefit of an insurance cover, which keeps family secure, always.

Key Benefits of LifeTime Super  Potentially higher returns over the long term by investing in unit-linked funds

 Additional allocation of units at regular intervals to boost investment  Option to withdraw money systematically over a period of 5 years on maturity of the policy  In case of an unfortunate event of death, the family will receive Sum Assured or Fund Value, whichever is higher

 Cover Continuance option available which ensures continuance of life insurance cover, even if customer wish to take a temporary break in premium payment

 Tax benefits on premiums paid and benefits received under the policy, as per the prevailing Income Tax Laws

Policy works in the following manner 1. Customer need to choose the premium amount, term and Sum Assured for which he wishes to take the policy.

2. After deducting premium allocation charges, the balance amount is invested in the investment fund(s) of their choice. 3. Customer can opt for add-on riders available under the policy.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 37

4. On survival, the maturity benefit is paid to the policyholder. In the unfortunate event of death, the nominee receives the higher of Sum Assured or the Fund Value. ICICI Prudential Life insurance Company offer customer 4 investment funds. They have the option to choose how they want their investments to grow, based on the objectives of each of the funds. Given alongside are the investment objective and asset allocation of each of the funds:

Fund

name

and

its Asset allocation

Min

Max

objective

Potential Risk-

Maximiser: Long Term Equity Capital Appreciation

&

Equity 75%

Related Securities

Reward 100% High

0%

25%

Equity 0%

40%

Debt, Money Market & Cash Fund

name

and

its Equity

objective Balancer: growth

&

Related Securities Balance and

60%

Moderate

100%

of Debt, Money Market &

steady Cash

returns Protector:

Accumulate Debt

Instruments, 100%

100% Low

steady income at a lower Money Market risk

& Cash

Preserver: Protection of Debt Instruments

0%

50%

capital through very low Cash & Money Market

50%

100% Preservation

risk

Capital

investments

Investments upto 20% can be allocated to this fund. Max.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 38

Potential Risk-Reward Fund name and its objective

SWITCHING OPTION Under this option you can switch your investment between the funds at any time (provided the policy is in force), depending on your financial priorities and investment objective. In any policy year, 4 switches can be done free of charge. The minimum switch amount is Rs.2,000.

Maturity Benefit

On maturity of this policy, you will be entitled to receive the Fund Value at the time of maturity. Alternatively, you can opt for the Settlement Options available

Settlement Options On maturity of the policy, you can choose to take the Fund Value as a structured benefit. With this facility, you can opt to get payments on a yearly, half-yearly, quarterly or monthly (through ECS) basis, for a period 3 of 1,2,3,4, or 5 years, post maturity (settlement period) . At any time during the settlement period, you have option to withdraw the entire fund value.

Death Benefit In the unfortunate event of death during the term of the policy, the nominee shall receive the higher of Sum Assured (net of permissible 1 partial withdrawals) and the Fund Value.

Cover Continuance option This option ensures that your life insurance cover continues in case you are unable to pay premiums, any time after payment of first three years' premium. All applicable charges

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 39

will be automatically deducted from the units available in your fund. You need to opt for cover continuance, if 4 you wish to avail of this benefit

Additional Protection with Riders .

Riders Accident and Disability

Benefit In the event of death or disability due to

Benefit Rider (ADBR)

an accident, the rider benefit amount

Critical Illness Benefit

would be paid accordingly In the event of the Life Assured being

Rider (CIBR)

diagnosed for any of the specified critical illness, the rider benefit amount would be

Waiver of Premium

paid. In the event of total and permanent

Rider (WOPR)

disability due to an accident, all further premiums till maturity would be paid by the company.

.

Rider charges for opted riders will be recovered by cancellation of units.

surrender values Policyholder can surrender their policy. Surrender values are available to them after deducting surrender charges and would depend on the number of completed policy years. Following are the surrender values applicable after payment of full 3 years' premium.

No.of Completed years of the Surrender value as a % of fund policy 3 years 4 years 5 years and above

value 98% 99% 100%

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 40

Life Time Super at-a-glance Minimum / Maximum Entry Age 0 - 65 years Maximum Age at Maturity

18-75 years

Minimum / Maximum Policy 10 - 75 years Term Premium Payment Frequency

Yearly, Half-yearly, Monthly

Minimum Premium

Rs.18,000 per annum

Minimum Sum Assured

Annual Premium x Term/2, subject to a minimum of Rs.1,00,000.

Tax Benefit

Premium paid for the policy and critical illness benefit rider will be eligible for tax benefit under section 80C & 80D respectively.

Any

benefit

amount

received under this policy will be eligible for the tax benefit under section 10 (10D), as per prevailing Income Tax laws.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 41

Positioning Of Life Time Super It is necessary to understand few terms before going through the various financial planning ways.

Save :

This is an activity that helps in the Asset Accumulation”. It has both short term

and long term perspective. The short term Perspective: is putting aside the extra money after expenses into one place like a bank. The long-term perspective is when savings is done keeping in mind certain specific goals.

Invest : This is an activity that focuses “Asset Creation”. It involves making money from money. The focus here is on capital growth. This has a long –term perspective; for example the money, which you save after having met your expenses, they put in various long-term securities to gain returns and thereby creating financial assets. For example they create assets by putting our savings into equity investments, thereby creating a financial asset over a long-term or a by buying a property thereby creating a physical asset. Where they invest depends on the level of risk tolerance.

Spend: This is an activity of using the money for your expenses. This can be done to meet your day-to-day expenses or to meet any exigencies. A part of your income goes in spending, which is nothing but protecting your lifestyles. So the act of spending is nothing but protecting your life styles, your lives and hence your assets.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 42

To summarize these three activities can look into the following manner Income

Save

Asset Accumulation

Invest

Asset Creation

Spend

Asset Protection

The following diagram shows, the way to appreciate the need for better and sound financial planning. Income This is situation in most of the house holds, based on the premises of taking care of all Customer expenses first before they can save

Spend Save

anything. More often than not this results into financial Failure over the Long-term.

Financial Failure

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 43

Income Save

This is a situation that is an idea one where the system is to keep aside money for savings and then spend. This does not take into account

Spend

unexpected expenses that may occur time to time. Not feasible all the time when laege expenses occur and this savings gets depleted. This may lead to a situation of financial dependency.

Financial Dependency This

Income

is

a

more

independent

situation

because with savings you are also making investments. This is the difference between asset

Save Invest

accumulation

and

asset

creation

investments create assets, where as savings accumulate assets. You use savings to meet unexpected expenses and investments to meet your long-term goals

Spend

This is the state of financial independence.

Financial Independence This is assumed to be the best possible form of financial planning. But this does not take into consideration the one big Concept-protection.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 44

This may lead to the state of financial failure

Life Time provides Asset Protection, Asset Creation And Asset Accumulation

Income

Save Invest Spend

Protection A/c

Investment A/c

This is the A/c that provides Protection by safeguarding

This is the A/c that provides financial Freedom

Against the 3D effect

with asset accumulation and asset creation in the long run

DEATH, DISABILITY

A unique combination

Life time super offers the

OR CRITICAL DISEASE

of protection and

unique facility of putting

Life time super can protect

investment, that

aside money for asset

Assets in case of death, or

provides with the

creation. It has the option

On contration of critical

benefit of both

of investing in 4 fund

Diseases by paying money

thereby acting as a

options. It also gives the

Without affecting

complete financial

flexibility of withdrawal

Investments, Also it pays

solution

to meet periodic needs

To spend and save in case Of disability .It provides Protection against 9 critical Diseases.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 45

Asset Protection Life Insurance The customer has the flexibility of choosing a sum assured that suits his life stage needs. The customer has the flexibility of increasing the sum assured whenever he wishes. This gives the customer the control to direct his investment in insurance as per the life stage depending upon his needs.

Health Protection The customer has the flexibility of choosing a rider cover that he wishes to take, which can be a maximum of basic Sum Assured or 10,00,000 whichever is lower. Thus if the customer is already covered with a medical policy, he can choose to have a lower Sum Assured under the Health Rider that amount for investment. The customer also avails of the tax benefits available under section 80D for the Critical Illness Rider Premium. The riders are in-force till the age of 65 years, which gives the individuals the health protection in the posy-retirement phase as well. It provides protection against 9 dreaded diseases. These are



Major organ Transplant



Complete renal Failure



Stroke



Paralysis



Heart attack



Valve Replacement Surgery



Major Surgery of the Arota



Coronary Artery Graft Surgery(bypass)

 Cancer

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 46

On death, the policyholder would be paid the sum assured or fund value at that point of time total protection of life

Death

The 3D Effect

Disability

In the unfortunate event of disability due to accident, Life Time Super ensures an annual payment for 10 years for normal sustenance and investment A/c remains intact. Total protection against the unforeseen & protection of assets too.

Dreaded Disease

This is enabled by the flexible feature of the product, where on death the life assured would get higher of the chosen Sum Assured or Fund value

Life Time Super provides protection against 9 dreaded diseases. It works separately from investment a/c pays more money in case of you confront any one of these. total protection against the unfortunate events that may leave one as “Living Dead”.

Life Time Super also covers for the unfortunate event of permanent disability with its ADBR and WOP. This rider pays money for 10 years to take care of expenses in those years of loss income

It also covers for the unfortunate event of “Living Dead” with the attachment of CIBR Rider with it .This rider provides with cover against 9 critical illness without affecting investment A/c at all. Total protection against the eventualities of your life and yet keeping investment growing.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 47

Asset Creation Lifetime Super provides the opportunity for long=term asset creation along with protection. This product provides with flexible features so that customer can grow investments in the long run. It is an established fact that putting aside money regularly leads to long-term wealth creation. The regular premium that customer pay is directed into his investment A/c as per the option chosen by him. The value of this investment grows over time. Customer can track the portfolio regularly and make changes depending on his needs. It helps in asset creation in the following manner. Life Time Super regular Premium

Part of the premium towards the policy expenses

Allotment of UNITS

Various Investment options, facility of Withdrawals and investing back in investment A/c

Insurance Charges

This goes to protection A/c to provide a cover against the 3D effect of “Death, Disability And dreaded Diseases.

Units that build up your investment value

This is customer investment A/c.The units that are bought with the premium, which the customer paid, first take care of their protection and then remaining amount is put into their investment account. Here they have various options of investments as per their choice and priorities. This is the account where their money grows over a long period of time.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 48

Life Time Super being a regular premium product serves as the right product for disciplined savings over a long period of time. The other benefit of this disciplined saving is that it helps in accumulating units over a period of time at an average cost that is lesser than the average unit value over the same period. This happens because of Rupee-Cost Averaging. Thus the policyholder over a long-term creates value from his investments.

Concept of Rupee-Cost Averaging Rupee-Cost Averaging is achieved by regularly investing a fixed amount of money into a particular fund, over a long-term period, regardless of the state of the market. By doing so , one would effectively, buy more units when the markets are down and he prices are low, and fewer units at lower prices. Thus the average cost of acquisition of the units would be less than the average unit price over the same period. Rupee-Cost Averaging provides the benefit of regular investment to the policyholders. This type of an investment pattern is also known as systematic Investment Plan. This approach helps in decreasing the Cost of acquisition of units as compared to the average during the same period time, there by creating value in the long-term.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 49

ACCUMULATION Asset Accumulation is the last key in financial independence and freedom apart from the other two pillars of Asset Protection and Asset Creation.

Life Time Super works like other Savings Bank A/c. Customer has the flexibility of accumulating their money in Life Time Super just as they would do in a bank A/c.

He has the flexibility to take out money of their account for any of their requirements without having to pay any costs, which is how they use their accumulation account.

They also have the flexibility of increasing their accumulation by putting in extra premium whenever they have the money to put in .This gives them the benefit of getting all the accumulation, all savings done only in one account, which is what a perfect accumulation is all about. A unique opportunity for customer to accumulate all their wealth at one place.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 50

Life Time Super would provide the benefit of doing all the three Asset Protection, Asset Creation and Asset Accumulation in one single policy.

Asset Protection Cover against the 3D Effect. Provides you with Death Benefit+Cover Against Disability+Cov er Against Critical Illnesses

Asset Creation

Asset Accumulation

Asset creation with Rupee-cost Averaging, Opportunity to earn reasonably high returns. Opportunity to invest in various plans of customer choice

An ideal accumulation vehicle for policyholder. Provides the benefit of an account which grows while taking care of theeir your expenses. Provides the benefit of investing more amount of money.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 51

PART III

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 52

FINDINGS o It provides the customers, the flexibility of increasing the sum assured which suits investors life stage needs. o Life Time Super provides health protection by providing a feature like rider o Life Time Super also covers you for the unfortunate event of “Living dead” with flexible features like 6 choice of funds to grow their investments in long-run o This plan has the flexibility to take out money of policyholder account for any of their requirements without having to pay any costs, which is how they use their accumulation account. o The concept of Rupee-cost Average minimizes the timing risk. A sustained investment plan would always create value in the long-term for the policy holders, irrespective of the existing investment market conditions. o The switch option gives the policy holder / investor the control to change the investment patterns with changing needs at different lifestages.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 53

SUGGESTIONS

As the Life Time Super is a better tool for integrated financial planning, investing in Life Time Super creates asset by providing flexible choice of funds to invest, it accumulates the asset by having the flexibility of increasing investor accumulation by putting in extra premium whenever investor have some money to put in. It also provides some other features like riders which protects the health of the investor and meets the needs of Life stages.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 54

CONCLUSION

Life Time Super is positioned as a long term wholesome financial products that takes care of the investment, insurance makes and provides the protection against the health hazards. Thus Life Time Super is the product that satisfies totally a different set of needs and death benefit as a multiple of the annual premium. It also provides the flexibility to control the insurance & savings, according to the needs of the individual at different life stages.

Thus, this is how Life Time Super helps an investor to create, protect, and accumulate his investments.

B.V.V.Sangha’s Institute Of Management Studies, Bagalkot 55