121783070 Max New York Life Insurance1

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PROJECT REPORT

ON

A STUDY ON CHANNEL DEVELOPMENT OF MAX NEW YORK LIFE INSURANCE

SUBMITTED IN PARTIAL FULFILLMENT OF REQURIMENTFOR THE AWARD OF

MASTER OF BUSINESS ADMINISTRATION

ACADEMIC SESSION2007 2009

SUBMITTED TO : SUBMITTED BY:

VIPUL GUPTAMBA- III SEM.ROLL NO. : 0703570060

Babu Banarsi Das Institute Of TechnologyGhaziabad
http://www.maxnewyorklife.com/Home.aspxhttp://www.maxnewyorklife.com/Home.aspx


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ACKNOWLEDGEMENT

To accomplish a project it involves a lot of effort and contribution from a number

of people. It is thus an opportunity for us to thanks those people who have helped

us generously in the completion of this project.

Exchange of ideas generates a new object to work in a better way. Apart from the

ability, labour and time devotion, guidance and cooperation are the two pillars forthe success of the project, whenever a person is helped or cooperated by others his

heart is bound to pay gratitude to them.

In the chain we are immensely thankful and convey our sincere gratitude to our

project guide Mr. Nirmal Tripathi (Sales Manager) , Max New York Life for his

guidance, constant inspiration and keen interest shown on us during the project.

We deliberate our profound sense of gratitude to him.

We are also highly indebted to Mrs. Meghna Arora , BBDIT for being the

unfailing source of encouragement at pivotal juncture and fruitful guidance helped

us in completions of this project.

VIPUL GUPTA
http://www.maxnewyorklife.com/Home.aspx


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CONTENTS

1. Executive summary

2. Industry profile

3. Company profile

4. Objective of study

5. Conceptual framework

6. History of insurance

7. Types of insurance policies

8. MNYL policies or products

9. About life insurance advisors

10. Channel development

11. Research methodology

12 Recommendations

13. Conclusion

14. Bibliography


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E XECUTIVE SUMMARY


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Executive summary

A well-developed and evolved insurance sector is needed for economicdevelopment as it provides long term funds for infrastructure development and thesame time strengthen the risk taking ability.

Life insurance is also now being regarded as a versatile financial planning tool inIndia. India being a country having a huge population of around one billion

people with only 33.2% of the population in India possessing life insurance. Thecountry has a vast potential that has been left untapped till now.

Therefore what this has led to is the flooding of the life insurance market with anumber of private players which in collaboration with recognized foreigncompanies promises to deliver the best of services at the lest price. All thesecompanies are trying to grasp the maximum of market share in life insurancesector. For that they are recruiting world-class insurance advisors/agents who selltheir product or policies. Who are these advisors/agents? Who can becomeadvisors/agents? How channels are developed? How they are recruited inMNYL? , How much they can earn as an insurance advisors/agents, these aresome questions we have tried to answer in our project report.

This report is trying to give detail about channel development i.e. recruitment andselection process of the life insurance advisors. Thus by going through the reportone will get to know about life insurance and channel development i.e.recruitment & selection process of life insurance advisors/agents in Max NewYork Life Insurance company ltd.


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I NDUSTRYP ROFILE


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Industry Profile

The Insurance landscape in India is undergoing major change. Closed to foreigncompetition since nationalization in 1956, the life insurance had been protectedfrom competitive pressures. Now, with the re-opening of the sector, several new

players have entered the scene.

The game is old but rules are new and still developing. Ensconced in a monopolyrun from the nationalization days beginning in 1956, the insurance industry hasindeed awakened: to a deregulated environment in which several private playershave partnered with multinational insurance giants.

There are lots of life insurance companies in the industry but only few are gettinggood benefits and successfully trying to establish themselves. Life insuranceindustry is an upcoming industry and having a huge potential for making huge

benefits. Some of the life insurance companies are:

LIFE INSURANCE CORPORATION OF INDIA (LIC) MAX NEW YORK LIFE INSURANCE ICICI PRUDENTIAL LIFE INSURANCE TATA AIG LIFE INSURANCE BIRLA SUN LIFE INSURANCE HDFC LIFE INSURANCE

AVIVA LIFE INSURANCE

LIC is a government company so it is one of the biggest life insurance company but if we look at the private players then MAX NEW YORK LIFE IS No. 1among all private life insurance companies. According to GENERALACCEPTED ACOUNTING PRINCIPLE (GAAP) Max New York Life is theonly company, which is in the profit.


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C OMPANY P ROFILE


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Companys Profile

Max New York Life Insurance Company Ltd. is a joint venture between NewYork Life, a Fortune 100 company and Max India Limited, one of India's leadingmulti-business corporations. The company has positioned itself on the quality

platform. In line with its vision to be the most admired life insurance company inIndia, it has developed a strong corporate governance model based on the corevalues of excellence, honesty, knowledge, caring, integrity and teamwork. Thestrategy is to establish itself as a trusted life insurance specialist through a qualityapproach to business.

In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. TheCompany's paid up capital is Rs. 687 crore, which is more than the norm laiddown by Insurance Regulatory Development Authority (IRDA).

Having set a best in class agency distribution model in place, the company isspearheading a major thrust into additional distribution channels to further growits business. The company is using a five-pronged strategy to pursue alternativechannels of distribution. These include the franchisee model, rural business, directsales force involving group insurance and telemarketing opportunities, bancassurance and corporate alliances.

Customers to Max New York Life offer a suite of flexible products. It now has 26life insurance products and 8 riders that can be customized to over 400combinations enabling choose the policy that best fits their need.

Max New York Life is the first life insurance company in India to be awarded theIS0 9001:2000 certifications.

Max New York Life was among the top 25 companies to work with in India,according to 2003 Business World magazine, "Great Workplaces In India", Max

New York Life was ranked at the 20th position. This survey is the local version ofthe "Great Places to Work" survey carried out every year in 22 countries.

We were among top five most respected private life insurance companies in Indiaaccording to a 2004 Business World survey.

We have truly built an enviable sales force. With 201 agents becoming membersof the MDRT in 2005, Max New York Life has moved up in the Top 50 MDRTglobal list.


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ABOUT NEW YORK LIFE

New York Life Insurance Company, a Fortune 100 company founded in 1845,is the largest mutual life insurance company in the United States and one of thelargest life insurers in the world. Headquartered in New York City, New YorkLifes family of companies offer life insurance, annuities and long -term careinsurance. New York Life Investment Management LLC provides institutionalasset management and retirement plan services. Other New York Life affiliates

provide an array of securities products and services, as well as institutional andretail mutual funds.

The mission of New York Life is to maintain its superior 'financial strength',adhere to the highest standards of 'integrity' and demonstrate 'humanity' bytreating its customers, agents and employees with compassion, consideration andrespect.

New York Life is one of the largest and strongest life insurance companies in theworld with more than USD$250 billion assets under management and hasreceived among the highest ratings for financial strength from the life insuranceindustry's principal rating agencies: A.M. Best (AA+), Standard & Poor's (AA+),Moody's (Aa1), Fitch (AAA). According to Moody's, "New York Life's ratingreflects the company's good quality investment portfolio, ample liquidity, andsound capitalization, as well as the good growth potential of its international

business.

As a leader in the insurance industry, New York Life continues to bring to itsoperations new management concepts, advanced technologies, new distributionand training systems and innovative insurance products.

ABOUT MAX INDIA LIMITED

Founded in 1985, Max India Limited is a Public Limited company listed in the NSE and BSE of India with over 37,000 shareholders.

Today, Max India Limited is a multi-business corporate, driven by the spirit ofEnterprise, focused on Knowledge, People and Service oriented businesses of:


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Healthcare (Max Healthcare) Life Insurance (Max New York Life Insurance) Information Technology

Max also maintains interests in:

Specialty Plastic Products for the packaging industry (Max SpecialtyProducts)

Healthcare Staffing (Max Health Staff)

Prominent shareholders are Mr. Analjit Singh and a leading private equity firm,Warburg Pincus that accounts for 28.7% of the total shareholding. The public andInstitutional Investors hold the balance shareholding.

Till 1999, the companys main interests and partnerships were the following:

Business Partners

Bulk Active Pharmaceuticals DSM Gist Brocades

Electronic Component Distribution Motorola, USA

Electronic Component Distribution Avnet Inc., USA

Mobile Telephony Hutchison Telecom Ltd.

Hong Kong

V-SAT Communications Comsat Investment Inc.,

USA & Lockheed Martin,

USA

Plating Chemicals Atotech, Germany

Information Technology Mind Crossing, USA


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In 2000, the Company reinvented and restructured itself to focus on the businesses of Life under the theme, LifeOur Focus.

Max New York Life Insurance, founded as a Joint Venture between Max IndiaLimited and New York Life, a Fortune 100 company, is one of the leading privatelife insurers in India.

Max Healthcare, a subsidiary of Max India Limited is Indias first provider ofcomprehensive, standardized, seamless, and integrated world-class healthcareservices.

Neeman Medical International (NMI) is an International Clinical Research provider operating across three locations spanning North America, Asia and LatinAmerica. Each location is backed by comprehensive infrastructure and highlyskilled and experienced personnel.

Board of Directors- Max India Limited

Dr Bhai Mohan Singh Lifetime Chairman Emeritus, Max India

Mr. Analjit Singh Chairman, Max India

Dr S S Baijal Former Chairman, ICI Ltd.

Mr. N C Singhal Former Vice Chairman & MD, SCICI

Mr. N Rangachary Former Chairman, IRDA

Mr. Nitin Sibal Vice President, Warburg Pincus India Pvt. Ltd.

Mr. Piyush Mankad Former Secy., Ministry of Finance, Govt. of India

Mr. Ashwani Windlass Former Managing Director, Hutchison Max

Mr. Bharat Sahgal Managing Director, Warburg Pincus India Pvt. Ltd.

Mr. B Anantharaman Jt. Managing Director, Max India


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V ision , M ission &

Values

o f M NYL


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Vision of MNYL

To become the most admired life insurance Company in India.This we hope to achieve by:

o Understanding the needs of customer and offering them superior products and services.

o Leveraging technology to service customers quickly, efficiently andconveniently.

o Providing an enabling environment to foster growth and learningfor our employees.

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

We do believe that we are on the threshold of an exciting new opportunity, wherewe can play a significant role in redefining and reshaping the sector. Given thequality of our parentage and the commitment of our team, there are no limits toour growth.

MISSION OF MNYL

Become one of the top quartile life insurance companies in India

Be a national player Be the brand of first choice Be the employer of choice

Become principal of choice for agents.

VALUES OF MNYL

This vision to become India's most admired life insurance company will be

realized through our unique set of values, which are as follows:

Knowledge

Knowledge leads to expertise; and our expertise is in helping people protect them.Perfectly combining global expertise with local knowledge, we are India's lifeinsurance specialist. Max New York Life believes that for knowledge to be ofvalue it must be focused, current, tested and shared.


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Caring

Max New York Life is redefining the life insurance paradigm by focusingon customers first. The service process is responsive, personalized, humane andempathetic. Every individual who represents the company is for us our brandchampion.

Honesty

Honesty is the heart of the life insurance business. It is all about trust.Transparency, integrity and dependability form the cornerstones of the Max NewYork Life experience. The company ensures that everyone who representsthe brand carries a promise: we care in word as well as deed.

Excellence

Excellence at Max New York Life implies the ability to perform at a consistentlyhigh level. Focused on the value of continuous improvement in people, processesand the organization, the company strives for the highest standards of quality inevery aspect of its business.


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O BJECTIVE O F T HE STUDY


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Objective of study

To understand the procedure of channel development in MNYL.

To know about Life Insurance, its benefits and needs.

To find out possible advantage of Insurance advisors in MNYL.


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C ONCEPTUAL F RAMEWORK


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Conceptual Framework

What is life Insurance?

Life insurance is a contract providing for the payment of a sum of money to the person assured or failing him to the person entitled to receive the same on thehappening of cetin event.

Uncertainly of death is inherited in human life. It is this rise, which gives rise tothe necessity for some form of protection against the financial loss arising fromthe death. Insurance substitutes this uncertainty by certainly.

The objective of Insurance is normally to provide

A. Family protectionB. Provision for old age

Why Life Insurance?

You think twice before taking the plunge into buying life insurance. Is buyinginsurance is necessity now? Spending an extra amount as premium at regularintervals where do you not see immediate benefits does not seem a necessity atthe moment. May be later.

Well you could be wrong. Buying insurance cannot be compared with any otherform of investment. Insurance gives you a life long benefits and the returns will

definitely come but only when you need it the most i.e. at the right time. Besides buying insurance early in life is one of the wise decisions you could take.

Insurance is not about how much more it can offer you when the stock market isat the peak. It may not be an attractive investment option. But weight pros andcons and consider how much more it can offers at a small price.

Most important of all it provides you with the unique sense of security that noother form of investment provides. It gives you a sense of financial support


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specially during that time of crises irrespective of the fluctuation in the stockmarket. Insurance provides for your career goals right from the childhood years.

If the eating member of the family is no more your childs educational need willnot suffer. In fact his higher education too will be provided for. You need notspend sleepless night thinking about how to save for childs marriage. Lifeinsurance will take care of that typical once-in-a-life-time spending on marriage.

An accident or a disability may be devastating but a life insurance policy can beof utmost support for the family during such times too. Besides it provide for

addition benefits such as bonuses. You need not worry about retirement years.The rising prices, taxes and your lifestyle will be taken care of easily. And youcan relax and spend your old age in comfort and peace.

Life insurance todays plays a major role in once life at various stages.Considering the benefits it offers one cannot give a thought to buying aninsurance policy the earliest.

Need for Insurance

The need for life insurance comes from the need to safeguard our family. If youcare of your familys need you will definitely consider insurance.

Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, a system in which a sense of financial security was alwaysthere as there were more earnings members.

Times have changed and nuclear family has emerged. Apart from other pitfalls ofa nuclear family, a high sense of insecurity is observed in it today besides, thefamily has shrunk. Needs are increasing with time and fulfillment of these needsis a big question mark.

How will you be able to satisfy all those needs? Better lifestyle, good education,and your long desired house. But again you just cannot fritter away yourearnings. You need to save a part of it for the future too a wise decision. This iswhere insurance helps you.


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Factors such as fewer numbers of earning members, stress, pollution, increasingcompetition, higher ambitious etc are some of the reasons why insurance hasgained importance and where insurance plays a successful role.

Insurance provides a sense of security to the income earner as also to the family.

Buying insurance frees the individual from unnecessary financial burden that can

otherwise make him spend sleepless night. The individual has a sense ofconsolidation that he has sometime to fall back on.

From the very beginning of your life, to your retirement age insurance can take

care of all your needs. Your child needs good education to mould him into a goodcitizen. After his schooling he needs to go for higher education, to gain a professional edge over the others a necessity in this age where cutthroatcompetition is the rule. His career needs have to be fulfilled.

Insurance is a must also because of the uncertain future adversities of the life.Accidents, illness, disability etc are the facts of life, which can be extremelydevastating. Other than the hospitalization, medication bills these may run up itsthe aftermath of the accident, the physical well being of the individual that has to

be taken into consideration. Will the individual be in a position to earn as before?A pertinent question. But what if he is not? Disability can be taken care of by

insurance. Your family will not have to go through the grind due to your presentinability.

Moreover, retirement, an age when every individual has almost fulfilled hisresponsibilities and looks forward to relaxing can be painful if not planned

properly. Have you consider the increasing inflation and taxes? Will youinvestment offer you attractive return under such circumstances? Will it take ofyour family after you? An insurance policy will definitely take care of thesethings. Insurance today has opened up new vistas a lot of potential. Consideringhow dependent our agriculture system is on the monsoon, the farmer sees a dimfuture. The uncertainty of the monsoon too can be taken care of by insurance.

Looking at the advantage of the insurance policy a number of farmers have goneinto insurance. Insurance has become a necessity today.

When is the right time to buy Insurance?

Buying life insurance cannot ever be compared with other investment decisionssince it is very much contrast with those stock market investments where you wait


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for the right time to buy and sell. Neither is this like receiving tips on particularscrip doing well in the market and holding great future prospects.

Buy life insurance at the earliest. Do you think when you will fall ill? Are yousure about future income earning potential? Are you sure you will never meet an

accident? If not buy insurance now.This is because the future is always uncertain. Just as buying insurance is anecessity so also buying insurance early in life is important too. With proper

financial planning one can work out as to how much money an individual isentitled to after the end of a particular term. A policy that fulfills your childs

future education needs would have to be timed appropriately so that he receivesthe policy amount at the time when he needs it the most.

What does the life insurance provide?

The proceeds accruing from life insurance policy can be utilized for:

A. Final expenses resulting from death.

B. Guaranteed maintenance of lifestyle.

C. Replacement of income.

D. Mortgage or Liquidation payment.

E. Cost of education.

F. Estate and other taxes.

G. Continuity and security of interest.

Why is insurance superior to other form of saving?

An immediate estate is created in favor of the policyholder.


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Protection in case of death.

Liquidity in case of need easy loans are available.

Tax relief income tax, wealth tax, etc.

Policies can be offered as collateral security.

Policies can be taken under M.P.W Act 1874, to protect against creditors.

H ISTORY oFI NSURANCE


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History of Insurance

The story so Far

Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear riskof the caravan trade by giving loans that had to be repaid with interest when thegoods arrived safely. In 2100 BC, the code of Hammurabi granted legal status tothe practice.

That perhaps, was how insurance made its beginning.

Life insurance, on the other hand, had its original in ancient Rome, where citizensformed burial clubs that would meet the funeral expenses of its members as wellas help supervisors by making some payment.

As European civilization progressed, its social institutions and welfare practicesalso got more and more refined. With the discovery of new lands, sea route andthe consequent growth in trade, medieval guild took it upon themselves to protecttheir members traders from loss on account of fire, shipwrecks and the like.

Since most of the trade took place by sea, there was also the fear of pirates. Sothese guilds even offered ransom for members held captive by pirates. Burial

expenses and supports in times of sickness and poverty were other servicesoffered. Essentially, all these revolved around the concept of insurance of riskcoverage.

ENTRY OF COMPANIES


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The first stock companies to get into the business of insurance were chartered inEngland in 1720. The year 1735 saw the birth of the first insurance company inthe American colonies in Charleston.

However, it was after 1840 that life insurance really off in a big way.

THE GROWING YEARS

The 19 th century shows huge development in field of insurance, with newer products being advised to meet the growing need of urbanization andindustrialization.

In 1835, the infamous New York fire drew peoples attention to the need to provide for sudden and large losses. Two years later, Massachusetts became thefirst state to require companies by law to maintain such reserves. The greatChicago fire of 1871 further emphasized how fires can cause huge losses indiversity populated modern cities. The practice of reinsurance, wherein the risksare spread among several companies, was devised specifically for such situations.

There were more offshoots of the process of industrialization. In 1897, the Britishgovernment passed the Workmens compensation act, which made it mandatoryfor a company to insure its employees against industrial accidents.

With the advent of the automobile, public liability insurance, this first made itsappearance in the 1880s gained importance and acceptance.

In the 19 th century, many societies were founded to insure the life and health oftheir members, while fraternal orders provided low costs, members-onlyinsurance.

Even today, such fraternal orders continue to provide insurance coverage tomembers as do most labour organization. Many employees sponsor groupinsurance policies foe their employees, providing not just life insurance, butsickness and accident benefits and old age pensions. Employees contribute acertain percentage of the premium for these policies.

In India

Insurance in India can be traced back to the Vedas. For instance, yogakshema, thename of Life Corporation of Indias corporate headquarters, is derived from Rig


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Veda. The term suggests that a form of community insurance was prevalentaround 1000 BC and practiced by Aryans.

Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children.

Bombay Mutual Assurance society, the first Indian Life Assurance society, wasformed in 1870. Other companies like Oriental, Bharat and Empire of India werealso set up in the 1870-90s.

It was during the swadeshi movement in the early 20 th century that insurancewitnessed a big boom in India with several more companies being setup.

As these companies grew, the government began to exercise control on them. TheInsurance Act was passedin1912, followed by a detailed and amended InsuranceAct of 1938 that looked into investments, expenditure and management of thesecompanies.

As a result, the government decided nationalizes the life assurances business inIndia. The Life Insurance Corporation of India was sat up in 1956 to take overaround 250 life companies.

For years thereafter, insurance remain monopoly of the public sector. It was onlyafter seven years of deliberation and debate- after the R.N Malhotra Committeereport of 1994 became the first serious document calling for the reopening up ofinsurance sector to private players- that the sector was finally opened up to the

private players in 2001.

SOME OF THE IMPORATANT MILESTONES IN THE LIFE INSURANCE IN INDIA ARE:

1912: The Indian Life assurance Companies Act enacted as the First statue toregulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the Governmentto collect Statistical information about both lives and Non-life Insurance

business.

1938: Earlier legislation consolidated and amended to by the Insurance Act withthe objective of protecting the interest of the insuring people.


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1956: 245 Indian and foreign insurers and provident societies taken over by the

central government and nationalized, LIC formed by an Act of parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crorefrom the government of the India.

Effect Of Liberalization

The winds of liberalization have initiated vast changes in the functioning of theindustry today. Increasing number of multi-national partnership with privateinsurers have paved the way for radical shift in insurance selling through a

number of new distribution channels besides bringing about more awareness inthe need for insurance and stressing on the important role technology can play.

With major trade barriers, gone the Indian insurance industry is slowly openingitself from a protected environment to e-business, incorporating newer technologyin insurance.

The opening up of the sector is paving way for:

o Faster decision making

o Easier claim settlement

o Bank assurance

o Improved customer service

Utilizing the extensive network of banks for selling insurance will over a period bring about an increase in insurance density improving insurance penetration inrural areas where in a large unexploited potential exists.

INSURANCE SECTOR REFORMS

In 1993, Malhotra committee, headed by former Finance Secretary and RBIGovernor R.N Malhotra, was founded to evaluate the Indian insurance industryand recommended its future direction.


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The Malhotra committee was set up with the objective of complementing thereforms initiated in the financial sector.

The reforms were aimed at creating a more efficient and competitive financial

system suitable for the requirements of the economy keeping in minds thestructural changes currently.

Underway and recognizing that insurance is an important part of the overallfinancial system where it was necessary to address the need for similar reforms.

The committee emphasized that in order to improve the customer services andincrease the coverage of the insurance industry should be opened up tocompetition. However, at the same time, the committee felt the need to exercisecaution as any failure on the part of new players could ruin public confidence inthe industry.

Hence, it was decided to allow competition in a limited way by stipulating theminimum capital requirement of Rs. 100 crores. The committee felt the need to

provide greater autonomy to insurance companies in order to improve their performance and enable them to act independent companies with economicmotives. For this purpose, it had proposed setting up an independent regulatory

body.

The Insurance Regulatory And Development Authority(IRDA)

Reforms in the insurance sector were initiated with the passage of the IRDA Billin Parliament in December 1999. The IRDA since its incorporation as a statutory

body in April 2000 has fastidiously struck to its schedule framing regulations andregistering the private sector insurance companies.

The other decision taken simultaneously to provide the supporting to theinsurance sector and in particular the life insurance companies were the launch ofthe IRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured thatthe insurance companies would have a trained work force of insurance agents in

place to sell their products.


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Since being set up as an independent statutory body the IRDA has put in aframework of globally compatible regulations. In the private sector, 12 lifeinsurance and 6 general insurance companies have been registered.

The important functions of IRDA are as follows:

To exercise all powers & functions of controller of insurance.

Protection of the interest of the policyholder.

To issue, renew, modify, withdrawn or suspend certificate of registration.

To specify requisite qualification & training for insurance intermediaries& agents.

To promote & regulate professional organization connected with

insurance.

To conduct inspection/investigation etc.

To prescribe methods of insurance Accounting.

To regulate investment of funds & margins of solvency.

To adjudication upon disputes.

To conduct inspection & audit of insurers, intermediaries & otherorganization concerned with insurance.

Current Status

The IRDA Bill had been introduced in the Lok Sabha during the Vajpayeegovernment last tenure with the expected mixed reactions. The bankingRegulations act is to be modified to allow bank to become active players in theinsurance sector. This comes as a major move.

The takeout of the amendment made to section6 (0) of the banking RegulationAct, 1949 is this: the current act does not permit to handle insurance products.The proposed change will permit banks to either distribute or to market insurance


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products. In addition to this, banks will also be allowed entry to the insurancesector through the joint venture route and banks assurance. It is understood thatonly strong banks with three years track records will be allowed to enter the

business-entry is a strict no-no to the weaker banks. The Insurance Regulatoryand Development Authority (IRDA) bill provides for three levels of players-an

insurance company, insurance broker and agents. Banks will work as agents and brokers in this proposed structure.

This an attempt to make the insurance sector more dynamic- this is likely tohappen as banks will us their formidable branch network to market and distributethe insurance products.

The Indian insurance industry, which until now was a controlled sector, with onlytwo players for the last four and half decades, has suddenly turned itself into a

battleground. Though the sector remained in the strong clutches of thegovernment enterprise, the growth has been slow. A number of players, both

domestic and international, characterize the industry competing for the hugeuntapped market.

The Indian insurance sector is witnessing a slow and steady change. Though thesector is yet to come out of the government control completely, the newconstraints are hopeful of competing head-on with the state-owned monopolies

and create a niche for themselves.


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T YPES O F I NSURANCE

P OLICIES


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Types Of Insurance Policies

Though there are lots of policies available in the market under different namesand by different companies, the policies can broadly be classified into followingcategories:

Term Insurance policy

Whole life policy

Money back policy

Endowment policy

Pension plans or Annuities

Term Insurance Policy


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Term insurance provides life insurance coverage for a specific period of time.Presently one year, ten year, and fifteen year are the periods one can buy term lifeinsurance policy. If the insured person dies during the period the insurance is inforce, the insurance company pays off the face value of the policy. If the insuredlives longer than the term of the policy, the policy is no longer in effect and

nothing is paid.Term insurance is the least expensive form of life insurance. It is commonly usedwhen the insured needs temporary protection or cant afford the premiums for theother forms of life insurance. The other reason an insured may want terminsurance is to purchase life insurance and invest the difference between the term

policy and cash value policy elsewhere.

Term insurance comes in several forms. There is renewable & non-renewable. Non-renewable means that on the expiry of your policy you must go underanother physical test and filling out another questionnaire. On the other hand, with

renewable policy you do not need to undergo these formalities again and youautomatically re-qualify to continue your policy.

Then there is convertible & non-convertible policy is the one which can beconverted into a permanent policy, whereas non-convertible is the one which cannot be converted into a permanent policy or in other words the policy can not beconverted into any form of life insurance policy.

WHOLE LIFE POLICY

The whole life policy provides insurance coverage for the entire life of the insuredregardless of how many years the insurance to pay. Premiums may be paidthroughout the insured entire life or for a portion of his life. Additionally the

premium can be paid in one lump sum money when the policy is taken out. Thisis referred to as single premium whole life policy.

When the premium is paid throughout the life it is known as straight life policy, but when the premium is paid for a specified period of time it is known as limitedlife policy.

The premiums are higher for whole life policy as opposed to term insurance. Thereason for this is that the policy has investment features as well as death benefits.The cash value portion of the whole life policy insurance belongs to the insured.One can take it out in the form of the policy loan or cash the policy in. anotheradvantage of whole life policy is that the premium are fixed, i.e. regardless ofyour income, you pay the same amount for the coverage each year.


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Universal life insurance policy

Universal life insurance is a variation of whole life. The difference is that withUniversal life insurance part is spread from the investment portion of the policy.

The cash value portion of the policy is tested, as an accumulation fund andinvestment is credit to the accumulation fund.

Money Back Policy

Money back policy provides the periodic payments of partial survival benefitsduring the term of the policy, as long as the policyholder is alive.

An important feature of this type policy is that in the event of the death at anytime within the policy term, the death claims comprises the full sum assured,without deduction of any of the survival benefit amount, which may have already

been paid as money back components. Similarly the bonus is also calculated onthe entire sum assured.

Endowment policy

An Endowment policy covers the risk for a specified period, at the end of whichthe sum assured is paid back to the policyholder, along with the bonusaccumulated during the term of the policy. This feature of payment of endowmentto the policyholder when the policies term is complete is responsible for the

popularity of endowment policies.

The amount received on maturity can either to buy an annuity policy to generate a

monthly pension for the rest of the policy, or put it into any other suitableinvestment of our choice. This is one important benefit, which the endowment policy offers over a whole life insurance policy.

Overall, endowment policies are the most suitable of all insurance plans forcovering the risk to a family breadwinners life. Not only do these policies

provide financial risk cover for the family, were the policy holder to die prematurely but the insurance amount is also repaid once this risk is over.


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Alternately, the endowment sum is available for a suitable investment geared to providing an income for the remainder of once own life. These types of plans are particularly suitable to those who other than having risk cover is also interested ina saving component simultaneously.

Pension Plan Or Annuity

An annuity is an investment that we make, either in a single lump sum or throughinstallments paid over a certain numbers of years, in return for which we receive aspecific sum every tear, every half-years of every month, either for whole life or afixed number of year.

After the death of annuitant or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, perhaps along with a smalladdition, calculated at that time. Annuities differ from all other form of life

insurance in one fundamental way-an annuity does provide any life insurancecover but instead offers a guaranteed income either for life or a certain period.

Typically annuities bought to generate income during ones retired life, which iswhy they are also called pension plan. Annuity premiums are payments are fixedwith reference to the duration of human life.

Settlement Option

When the life insurance policy becomes payable, the insured or the beneficiariesmay elect to take-to-take payment in one lump sum. However, when the insuredor the beneficiaries, elect not to take lump sum payment, there are several otheroptions available to him for receiving his payment, which are as follows:

Interest Option

According this option, the entire proceeds are left with the insurance companyand it pays a guaranteed interest rate on your amount. At any time in the future,the beneficiary can withdraw the money.


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Fixed Amount Option

In this option the beneficiary receives a fixed amount of money each month untilthe proceeds are exhausted.

Fixed Period Option

The fixed period option will pay the beneficiary equal payments over a fixed period of time, which may be 10 years, 20 years or even just 5 years. Excessinterest earned will increase the amount of these payments.

Life Income Option

This option provides the beneficiary with the proceeds paid over the rest of hislife. However when the beneficiary dies the balance of the policy is consideredused up.


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M NYL P OLICIES

O R P RODUCTS

Mnyl Insurance Policies/Products

Whole Life Participating Policy

Whole Life Participating Policy provides an insurance cover that is guaranteed foryour entire life. This policy also builds cash value, which you can use during yourlifetime to fund any unforeseen needs by taking a loan. In addition this policy isalso eligible for bonuses.

KEY BENEFITS


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On death of life insured: Sum Assured plus accrued bonuses.

On Maturity (attaining age 100): Sum Assured plus accrued bonuses.

Bonus: From 3rd policy year, we will declare bonuses every year.

Tax benefits:

o Your premiums are eligible for deduction u/s 80C up to Rs.100, 000/-every year.

o Your DD rider premiums are eligible for an additional deduction u/s80D up to Rs.10, 000/- every year.

o Your claim amounts (from death, through surrenders or on maturity)are eligible for tax exemption u/s 10(10D).

Children's Endowment 18 & 24 Policy

Child Endowment to Age 18 enables you to provide for higher education of yourchild. Child Endowment to Age 24 enables you to provide for the best possiblewedding of your child and also builds cash value, which you can use during tofund any unforeseen needs by taking a loan. In addition this policy is also eligiblefor bonus.

KEY BENEFITS

On death of life insured: Refund of premiums plus interest plus accrued bonus.

On Maturity: Sum Assured plus accrued bonus. On Surrender of Policy: Surrender value. Bonus: From 3rd policy year, we will declare bonuses every year. Tax benefits:


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o Your premiums are eligible for deduction u/s 80C up to Rs.100,000/-every year.

o Your claim amounts (from death, on maturity or through surrenders)are eligible for tax exemption u/s 10(10D).

Life Gain Endowment Policy

Life Gain Endowment Policy provides you with an insurance cover that isguaranteed during the tenure of the policy. This policy also builds cash value,which you can use during your lifetime to fund any unforeseen needs either bysurrendering accumulated or taking a loan. In addition this policy is also eligiblefor bonuses.

KEY BENEFITS

On death of life insured: Sum Assured plus accrued bonus.

On maturity: Sum Assured plus Guaranteed Addition @ 10% of SumAssured plus accrued bonus plus terminal bonus (if any).

On Surrender of Policy: Surrender value.


Tax benefits:

o Your premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year.

o Your DD rider premiums are eligible for an additional deductionu/s 80D up to Rs.10, 000/- every year.

o Your claim amounts (from death, on maturity or throughsurrenders) are eligible for tax exemption u/s 10(10D).

Easy Life Retirement Plan

Easy Life Retirement Plan (Participating) Policy helps you to save money foryour retirement, and also provides you with an opportunity to take home a regularretirement income (i.e. pension) for your entire life from your chosen date of


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retirement. This income is a guaranteed amount, guaranteed when your annuitystarts. In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured: Refund of accumulated premiums plus cashvalue of additional pure endowments purchased from bonuses.

On the chosen retirement date: Sum Assured plus additional insurancecoverage purchased in way of bonuses.

On Surrender: Surrender value (minimum guaranteed @ 55% of premiums paid).


Tax benefits:

o Your premiums are eligible for deduction u/s 80CCC (1) up toRs.10, 000/- every year.

o Your claim amounts (from death, on maturity or throughsurrenders) are eligible for tax exemption u/s 10(10D).

Unit linked

The journey of life is full of wonderful dreams. To make them come true, yourneed for protection, investment, and financial liquidity keeps changing at differentstages of life. The birth of a child will require you to increase your insurancecover; a marriage in the family will require additional money. Similarly on a

promotion you may want to increase your investments, to create a large kitty for

future expenses. Usually you would require multiple financial products to meet allyour needs and would have to actively manage them. However with the LifeMaker Unit Linked Investment Plan you can meet all your financial needs,without the tedium of managing multiple products.

How does the Life Maker Unit Linked Investment Plan work?


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In the Life Maker unit linked plan; the premiums you pay are invested in fundsoffered by us. You will determine the appropriate ratio of investments into thesefunds in consultation with your Agent Advisor. These funds are invested in assetssuch as equities, money market instruments, investment grade corporate bonds,and government securities. These funds offer a wide range of returns. You can

choose to invest your premiums in one or more of these funds, basis your risktaking ability.

In turn, we issue units, which represent the value of your policy i.e. you can "see"the value of your policy on any day by multiplying the number of your units bythe value of units on that day. The value of these units is called the Net AssetValue (or NAV) and is normally published in newspapers on a daily basis. The

NAV is based on the market value of the underlying investments in that fund i.e.equities, company bonds, government securities, etc.

KEY BENEFITS

Flexible Protection: You have the flexibility to choose from twoinsurance covers - as per your need.

o Level insurance cover: In the unfortunate event of death thenominee shall receive higher of the insurance cover or valueof units.

o Increasing insurance cover: In the unfortunate event ofdeath the nominee shall receive the sum of insurance coverand the value of units in the plan. You can change your typeof cover from increasing insurance cover to level insurance

cover during the plan tenor after age 60 by writing toMNYL.

Flexible Investment: You have the option of investing your money inAny ratio in four attractive funds. The choice ofyour funds is derived from your investor risk

profile which looks at factors such as age, abilityto invest & risk appetite.

Secure Fund - Invests 100% in high quality fixed income securitiesissued by the Government of India, or companies orother bodies corporate with a high credit rating. This fundwill have low level of risk and return.
http://www.maxnewyorklife.com/Products/Individual/Life%20Maker%20Unit%20Linked%20Investment%20Plan.aspx#f1#f1http://www.maxnewyorklife.com/Home.aspxhttp://www.maxnewyorklife.com/Products/Individual/Life%20Maker%20Unit%20Linked%20Investment%20Plan.aspx#f1#f1


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Conservative Fund - Invests largely in high quality fixed income securities

issued by the Government of India or companies orother bodies corporate with a high credit rating. Thisfund will have a low to moderate level of risk and

return.

Balanced Fund - Invests in both high quality fixed income securities issued by the Government of India or companies or other bodiescorporate with high credit rating, as well as in high qualityIndian equity stocks. This fund will have a moderate level

of risk and return.

Growth Fund - Invests largely in high quality Indian equity stocks. A small portion of the fund may be invested in high quality fixedincome securities issued by the Government of India orcompanies or other bodies corporate with high credit rating.This fund will have a moderate to high level of risk andreturn.

High Customization: We understand your need to adjust yourinvestment portfolio based on factors likechanging interest rates or the volatility in theequities market or a change in your life stage.The Life Maker plan allows you to switch

between funds in any ratio. The switch allows

you to change your risk return profile of yourexisting investments. In every policy year, thefirst two switches are free. The switch option weoffer is one of the most powerful and flexibleones in the market where money from one fundcan be switched to multiple funds in a singleswitch .

Life Mak er allows you to re -direct your future premiums. You can invest yourfuture premiums in a fund different from your earlier fund, or to multiple funds ina ratio different from your earlier ratio (provided the amount paid into each fundmeets our minimum in-force requirement). Re-directing helps you change the risk- return profile of your future investments. In every policy year, the first re-direction is free Invest more through fund top-ups to match your cash flows.


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You can invest extra money in your plan through occasional top-ups at anytime

post the policy commencement dates. However, cumulative top ups will beallowed up to only 25% of the cumulative Annual Target Premium. Top upswont effect any change in Sum Assured.

Guaranteed free units as loyalty bonus: In the last policy year, you canget free additional units, knownas persistency units. These areequal to 2.5% of your annualtarget premium multiplied bythe policy term, but notexceeding one annual target

premium.

Attractive Tax Benefits: .All premiums (including all top-ups) paid areeligible for a tax rebate under Section 80C ofthe Income Tax Act of 1961.

All maturity benefits are tax free underSection 10 (10D) of the Income Tax Act of1961.

All switches are tax free.

Group Term Life

Easy and convenient administration one single master policy for all employees.

Group size of at least 25 employees. No upper limit on membership.

Policy is valid for one year and can be renewed annually.

Uniform or a graded cover can be provided on any basis chosen by your subjectto a maximum of three years of salary per employee.

In case of death of an employee, due to natural or accidental reasons, the entiresum assured amount is paid to the employer.


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Additional Protection is available through riders for Critical Illness, AccidentalDeath Benefits, Disability and Dismemberment.

New members can join and out going members can leave the scheme at any timewith premium adjustment.

Group gratuity

After an employee has rendered continuous service for at least five years, he/ sheis eligible for 15 of days pay for each completed year of service. The employercan also structure a gratuity benefit that is higher than statutory requirements. Thegratuity benefit is payable on cessation of employment (either by resignation,death, retirement or termination etc), by taking last drawn basic salary as the basisfor the calculation.

Gratuity payment is a statutory liability for an organization and tends to increaseas the salaries and tenure of employment increase annually. In case of big,developing & growing organization, gratuity payout can work out to a substantialamount. If the employer pays gratuity from its current revenue, it may becomedifficult to meet the liability, it is therefore prudent and also beneficial that agratuity fund is set up.

Benefits of the Group Gratuity Plan

Investment management in a conservative manner to ensure steady appreciationin fund income.

Employees can be insured for the future service gratuity for full-anticipatedservice.

Scientific funding of gratuity on actuarial valuation and hence superior planningfor gratuity payments.

Past gratuity liability contribution can be made in installments.

Contributions are exempt under income tax act.

Benefits to the members


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Max New York Life will provide statement of account every quarter.

Free Actuarial Valuation for future gratuity liability.

For a new fund Max New York Life can assist in formation of the Trust and itsdocumentation.

An existing Gratuity Fund can be taken over by MNYL and we will offerassistance in documentation like Deed of variation to the original Trust Deed etc.

Employee deposit linked insurance

All establishments with at least 10 full-time permanent employees and to whomthe Employee's Provident Fund and Miscellaneous Provisions Act, 1952 applies,have a statutory liability to subscribe to Employee's Deposit Linked InsuranceScheme (EDLI), 1976 to provide for life insurance for all their employees. Theorganization has to make a contribution @ 0.51% of each employee's wages(Basic + Dearness Allowance + Retaining Allowance), subject to a maximum ofRs.6, 500 per month, to the Provident Fund Authorities as part of its complianceto the Act. The death benefit payable under this scheme is based on the providentfund account balance of the individual member, subject to a maximum of Rs.60,000.

Under Section 17 (2-A) of the Provident Fund Act, the Central Provident FundCommissioner may, if requested to do so by the employer, by notification in theOfficial Gazette, exempt, whether prospectively or retrospectively, anyestablishment from the provisions of the EDLI scheme, if he is satisfied that theemployees of such establishment, without making any separate contribution or

payment of premium, enjoy life insurance benefits more favorable than the benefits under the EDLI scheme.

Max New York Life Insurance Co. Ltd offers Group Term Insurance Scheme, aunique, simple and flexible scheme, which is a far better alternative to theEmployee Deposit Linked Insurance Scheme (EDLI) because of the benefits itoffers to both the employer and the employee. The Employees Provident Fund

Organization has approved this scheme as an alternative to EDLI scheme.


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The organization will enjoy the following advantages by subscribing to the Max New York Life Group Term Insurance as compared to the EDLI scheme:

The premium payable by the employer under the Max New York Lifegroup Term Insurance Scheme will be usually less than the total

contribution being paid by the employer to Regional Provident FundCommissioner, particularly when average age of the group is low and theemployer is in a low-risk industry.

Flexibility to opt for either a uniform flat cover for all employees or a gradedcover as per notional PF balance.

Well defined and simplified claim process will ensure quicker and hassle-freeclaim settlement.

Administrative convenience for additions and deletions of members with no

elaborate.

Credit shield

Credit Shield is a protection cover, which ensures that the loan amount is paid back to the lender in case of an untimely demise of the borrower.

Convenient Structuring

The plan can be conveniently structured in a way such that the entire loan amountor the balance loan amount is paid up in case of the untimely demise of the

borrower. The premiums can also be adjusted every year according to thereducing loan balance amount.

This plan provides total peace of mind because in case of an untimely demise ofthe borrower, the family is not burdened with the loan.

Unit linked group gratuity

Gratuity is a statutory benefit to the employees under the Payment of Gratuity Act1972. After the employee has rendered continuous service for at least five years,


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he/ she are eligible for 15 days pay for each completed year of service. Thegratuity benefit is payable on cessation of employment (either by resignation,death, retirement or termination etc), by taking last drawn basic salary as the basisfor the calculation.

Gratuity payment is a statutory liability for an organization and tends to increaseas the salaries and tenure of employment increase annually. In case of big,developing & growing organization, gratuity payout can work out to a substantialamount. If the trust pays gratuity from its current revenue, it becomes difficult tomeet the liability, it is therefore beneficial that a gratuity fund is set up for prudentfinancial planning.

Apart from being used as an effective tool to reward loyal employees, Gratuitycan be considered as a powerful tool to retain employees as well. This can bedone by structuring a higher gratuity benefit than the statutory requirements. Max

New York Life has made the Group Insurance portfolio more robust by launching

the Unit Linked Gratuity Plan.Max New York can now offer you two options of:

Non-unit Linked or Traditional Group Gratuity Plan : Which facilitatessystematic and steady funding of the liability?

Unit Linked Group Gratuity Plan : This facilitates steady funding and theopportunity of increased returns on investment.

Benefits of the Unit Linked Group Gratuity Plan

Opportunity for growing the fund safely and prudently by managing the fundinvestments properly and maximizing the returns on the investments andthereby bringing down the costs of the funding liability in the future.

Multiple Flexible Investment options based on the risk taking ability of thetrust.

Life covers for full-anticipated service.

Contributions are exempted from Tax.

Total Transparency in charges and the returns declared.


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Complete range of services provided: Taxation, Legal, and Investment.

Max Suraksha Policy

Max Suraksha Policy is designed by us keeping in mind our social responsibility.The policy is used to provide protection to social and rural segments. It providesan insurance cover for 5 years.

KEY BENEFITS

A. On death of life insured: Sum Assured

B. On Maturity: Return of 100% of premiums.

C. Tax benefits:

I. Your premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year .

II. Your claim amount (from death) is eligible for tax exemption u/s10(10D).

Super Saver Bond Policy

Super Saver Bond Policy will keep paying you a part of the Sum Assured atregular intervals, to take care of your periodic foreseen needs, and the balancekeeps growing to take care of your long term saving needs, as well as providesinsurance coverage till maturity.

KEY BENEFI TS

On death of life insured: Sum Assured (without deducting any money back benefits already paid) plus additional death benefit equal to SumAssured in case of accidental death.

On survival / maturity:

4th year 10% of Sum Assured6th year - 10% of Sum Assured


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8th year 10 % of Sum AssuredAt Maturity 140% of Sum Assured


Tax benefits:

o Your premiums are eligible for deduction u/s 80C up toRs.100, 000/- every year.

o Your claim amount (from death, on maturity or throughsurrender) is eligible for tax exemption u/s 10(10D).

Amsure Bonus Builder Policy

Amsure Bonus Builder Policy provides an insurance cover that is guaranteed foryour entire life. This policy also builds cash value, which you can use during yourlifetime to fund any unforeseen needs either by surrendering accumulated ortaking a loan. In addition this policy is also eligible for bonuses.

KEY BENEFITS

On death of life insured: Sum Assured plus accrued bonus.

On Maturity (attaining age 100):

Sum Assured plus accrued bonuses. Money back benefits 5% of SA every year from Age 61 to 80.



Tax benefits:

Your premiums are eligible for deduction u/s 80C up toRs.100, 000/- every year.

Your DD rider premiums are eligible for an additionaldeduction u/s 80D up to Rs.10, 000/- every year.


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Unique features in this policy:

Cash Bonuses: You can use your bonuses in the following ways:

o Withdraw in cash: bonus will be paid to you by cheque.o Pay your premiums: bonus will be used to pay the next

premium.o Increase your Sum Assured: bonus will be used to buy

additional layers of insurance cover in the existing policy by buying Paid up Additions (PUA).


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ABOUT L IFEI NSURANCE

ADVISOR


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About Life Insurance Advisors or Agents

Who is life insurance advisor or agents?

An agent is the representative of an insurance company who sells different policies or products to its clients. Another term used for insurance agents isAdvisors.

Today in life insurance companys advisors are known to be the backbone of thewhole system. Advisors/agents do not work on monthly payroll basis; theyreceive a certain commission on the policies they sell to the clients.

The eligibility required to become an advisors/agents is that he/she should be 12 th pass to operate in urban area and 10 th pass for rural areas. Before a person becomes advisors/agents he/she has to undergo 100 hrs training according toIRDA norms, which is compulsory.

70-75% of profits gained in life insurance business are through advisors/agents.

Who can become Insurance advisors/agents?

Any person who is 12 th pass and having a minimum age of 18 years can becomeinsurance advisor but an insurance company wants such persons who are having avery zeal to earn more and more and should have a very good communicationskill, which can satisfy the customer. Relationship skill is must in insuranceadvisor/agents.

MNYL wants mainly five things in an insurance advisor:

Confidence Self motivation Persuasion Urge to be financially independent Relationship skills


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Most preferred profiles to recruit as an insurance advisors/agents

Full time advisors: Non life insurance advisor, Credit card dealers, post officeagents, Mutual fund agents, Person having very wellconvincing power.

Part time advisors: Chartered accountants, Investment consultant, TaxConsultant, Property dealers, Doctor, Advocates, Directselling agents (DSA), Teachers, etc.

Role of an Insurance advisors/agents

To provide ongoing financial advice for his/her clients:

Identify future clients Making appointments Conduct financial review meetings with prospects/clients Close sale Get referrals Provide service to clients

Follow internal sales and reporting system

Working environment of company for an insurance advisors

o To be part of a world class sales team o Work from own office or residence o

Work full time or part time o Earn commission, bonus and incentives o No upper limit on earnings o Flexible career

Opportunity for an insurance advisors/agents

o No startup capital requiredo Flexible working environment


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o Be your own bosso Unlimited earning potentialo To be part of a world class team

Benefits jar an insurance advisors/agent

o A premium product portfolio that caters to a wide range offinancial needs.

o Excellent back-end support o Attractive payments and benefits o Round the clock customer service o Extensive for that edge over advisors competition

Recognition programs for an insurance advisors/agents

o Foreign trips and seminars o MDRT membership

Companys support to the advisors

o Field visits o Training on products and selling skills o

Regular on product and selling skills o Regular business reviewso Be a coach and Mentor o Recognize high performance o Help you become financially independent

Companys expectation from their advisors/agents

o Achieve sales targetso Participate in all meetingso Attend all training programso Weekly reviews at the officeo Follow the sales processo Follow weekly reporting process

Payments & benefits- Commission structure


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C HANNEL

DEVELOPMENT


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Channel Development

Channel development is basically to convince the potential customer to becomeadvisors. Now these advisors will convince some other people and that howchannel is made. Now the channel development involves a recruitment &selection process, which a person has to undergo in order to become an advisor.

Max New York Life has identified individual agents as its primary channel ofdistribution. The Company places a lot of emphasis on its selection process. Theagent advisors are trained in-house to ensure optimal control on quality oftraining.

Max New York Life invests significantly in its training programme and eachagent is trained for 152 hours as opposed to the mandatory 100 hours stipulated

by the IRDA before beginning to sell in the marketplace. Training is a continuous process for agents at Max New York Life and ensures development of skills andknowledge through a structured programme spread over 500 hours in two years.This focus on continuous quality training has resulted in the company havingamongst the highest agent pass rate in IRDA examinations and the agents havethe highest productivity among private life insurers.

201 agent advisors have qualified for the Million Dollar Round Table (MDRT)membership in 2005. MDRT is an exclusive congregation of the worlds topselling insurance agents and is internationally recognized as the standard ofexcellence in the life insurance business.

Having set a best in class agency distribution model in place, the company isspearheading a major thrust into additional distribution channels to further growits business. The company is using a five-pronged strategy to pursue alternativechannels of distribution. These include the franchisee model, rural business, directsales force involving group insurance and telemarketing opportunities, bancassurance and corporate alliances.


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Recruitment and selection of insurance advisors

As we know that Recruitment involves seeking and attracting a pool of people,from which qualified candidates for the job vacancies can be chosen. Recruitmentsets out the necessary stages to clarify what kind of person is required, wherehe/she might found and how to make right choice.

Recruitment of life insurance agent is also a very impressive criterion because inthis process we need to recruit and select those persons who bear some specialcharacteristics, which are very necessary to sell insurance. Life insurance is anintangible product and it needs insurance advisors who are having tremendousskills to sell an intangible product.

The key to good selection is preparation. So many people are found of theirability to pick a good sales person and so often, that person is good but not at the

particular job which needs to be done. It is vital to be clear about what job needsdoing and what kind of person would do it best; and then to find that person. Oncethe plan has been decided, the choice of candidate should be made carefully.

The effectiveness of the unit manager is dependent to great extent on theeffectiveness of the team of advisors supporting him, because an advisors worksunder a unit manager. So it is very important to recruit a very good team of lifeinsurance advisors who can give their best to increase the effectiveness and the

profit of the company. MNYL give very much stress on it and to recruit onlythose people as a life insurance advisor who is having some key skills specifies bythe company.

Further we will show the recruitment and selection procedure of life insuranceadvisors in MNYL insurance company ltd, and try to analyze whether it is the

best process of recruitment or company can do certain new modifications toenhance their recruitment processor for the increment of companys effectiveness.From the next page, we will see the recruitment and selection procedure of lifeinsurance advisors.


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Sequence of Recruitment process of Advisors in MNYL

Before an organization begins recruiting applicants, it should form a checklist ofquestion, which outlines a chronological sequence for the recruitment andselection process. Same is to be done with the MNYL recruitment and selection

procedure, it also forms a checklist of questions, which are termed as the initialstarter for the recruitment procedure. The questions are given below with thespecifications along with them:

1. What kind of the job is to be filled?

This question has a wide spectrum of answers. Hence, to answer this questionin to tally following sub-questions are to be answered.

Name of the job: Life Insurance Advisor Who is the boss: No boss Job objective: To sell life insurance policies or product and achieve

sales targets. How far the job is personally responsible for achieving results: Job

holder will not be responsible for achieving the sales targets because inthis kind of the job there is no salary paid, no boss over them and it istotally commission based job, so it is on the advisor whether he thinkhimself responsible or not.

This job is principally dealing with the end users who are interested to be insured.

MNYL looking for the persons who fulfill this job for life long becauselife insurance business is a life long business and will not end till thehuman being is there on the earth.

Salary and remuneration: It is totally commission based job andMNYL do not provide any fixed salary for this. There is much scope of


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getting a huge collection of incentives in the form of gifts, trips andother services.

After getting the answer of these questions, we will move towards next question.

2. What sort of person would do the job successfully?

It is very important to know that what sort of person would do this job of Lifeinsurance advisor successfully. MNYL specifies some qualities, which must

be there in a life insurance advisor. These qualities suggest some skills that arelisted below:

Confidence: This is the main skill, which an advisor must contain becausetill he will not confident, he would not be able to convince the differentkind of people.

Self-motivation: Self motivation is an essential quality, which must be, possess by an insurance advisor because in this job, rejection is must morethan acceptance, so an advisor has to be very strong from the heart andshould not depressed soon.

Persuasion: It is one of the very effective qualities, which must be therein an insurance advisor. It shows the perceiving ability of an advisor forhis job.

Urge to be financially independent: For a job which is commission based, an urge should be their in an advisor to become financiallyindependent, then only he would be able to generate more money forhimself and for the company.

Relationship skills: This very necessary element of quality shown in anadvisor by the MNYL because these skills help the advisor to make good

relation from his customers, which is very necessary for the future of thecompany.

3. Where will this person be found?

Now, we know what the job is and what kind of person is required for the job-only we need to find this person. The persons for this kind of job of a


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life insurance advisor can be found at many places through manyresources but most of the insurance agents chosen from the relations andwith direct contacts. The following are the sources from where we canfind out the persons who can become good life insurance agent:

Employment agencies: Employment agencies can be used as a widesource for the persons to this job. Advertising: It also plays a very effective role in finding of the persons

for becoming an insurance agent. MNYL also use this source.

Educational institutes: They are also one of the main sources for the

company to find out the person as an advisor. Direct contact with people: MNYL also uses direct contacts with peopleand offers business opportunity to them, company representatives contactto the persons and explains business opportunity presentation to them.

4. Which person is to be recruited?

The simple answer to this is that the one who fits the specification andwho has the essential characteristics as defined should be recruited. Thisimplies a structured approach of three steps. These are:

First, compare companys specification for an advisor with that of the prospects specifications and remove all these who do not meet theessential criteria.Secondly, move on to those areas where the Measuring Instruments andan assessment at interview are needed. For instance,

o Education, which should be at least graduate. o Age, above 30 years. o Married people are given more importance. o Doesnt matter male or female. o Must be living in city for more than 5 years and should possess

high ambitious and zeal to become financially independent.Thirdly, involves the identification pattern of behavior, which will helpin forming judgments.

After all three steps have been followed and care has been taken to see that thecandidate fits into the specific job requirements one can be sure of choosing theright candidate for the right job.


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Selection and Placement of Insurance Advisors

A selection system is a set of successive screens at any of which an applicantmay be dropped from further consideration. The process of selection ofinsurance advisors differs from companies to companies depending upon therequirement. In MNYL the applicant goes through various stages, the chances ofselection get better as more and more stages are cleared.

Selection procedure: The following selection procedure is used by for the

selection of life insurance advisor in MNYL insurance company.

o Preliminary interview: In this interview the applicant have face-to-faceinteraction with the respective Unit Manager and clear out all queries anddoubts about job. After this interview session, the prospects give hisconformation whether he is interesting to join the organization or not.

o Formal application: After the confirmation of the prospects the nextstep is to filling up of application form with the submission of allnecessary documents that are listed below:

--Birth certificate (10 th class passing certificate, driving license, etc)--Address proof (ration card, voter card, telephone bill, etc)--6 passport size color photographs--Highest qualification certificates (mark sheet)--A demand draft of Rs. 610 on the favor of Max New York Life

Insurance.


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After checking the form and all documents the operations department give itsconfirmation that the prospects is genuine and is subject for further process.

o Declaration of date of training and venue: After the previous step,operation department give the details about the details about training date

and about the venue of the training. The training is a necessary part of theselection procedure. This training is under the curriculum of InsuranceRegulatory And Development Authority (IRDA). The duration is 100hours and it can be get in one ways:

Full time training (10;00 AM to 05;00 PM)

o Testing: After completing the training conducted by IRDA, a test isconducted on the same venue. This test is taken based on the training andcontains the syllabus, which is prescribed by the IRDA. The test and

previous training is necessary for every body that wants to become aninsurance advisor.

o Issue of license: After passing out the test conducted by IRDA, alicense is issued from the IRDA. This license is the proof for theinsurance advisor and an advisor can start his work just after getting thislicense. Getting the license is the last step in selection process.

o Assignment to the Unit Manager: The following advisor is assigned to a unit manager to whom he has to report about his work and about anyquery concerning about insurance and about the company.

The above are the following steps which are use to select an insuranceadvisors/agents. The license issued by the IRDA is the only authorized power.This gives the person a right to do insurance. This license is supported to renewafter every three years.


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R ESEARCH

M ETHDOLOGY


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Research Methodology

Research is an art of scientific and systematic search of pertinent information on aspecific topic. In fact research is an art of scientific investigation. The advancelearners dictionary of current English lay down the meaning of research as acareful investigation or inquiry especially through search for new facts in any

branch of knowledge. Redman and Mory define research as systematized effortto gain nee knowledge. Some people consider research as a movement, amovement from the known to unknown. It is actually a voyage of discovery.According to Clifford Woody R esearch comprise defining and redefining

problem, formulating hypothesis or suggested solution; collecting; organizing andevaluating data; make deduction and reaching conclusion; and at last carefullytesting the conclusion to determine whether they fit t he formulating hypothesis.

RESEARCH DESIGN

Research type applied over here is Exploratory Research because the main purpose of such studies is that of formulating a problem for more preciseinvestigation the working hypothesis from an operational point of view. Themajor emphasis in such studies is on the discovery of ideas and insights.

DATA COLLECTION METHOD


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The task of data collection begins after a research problem has been defined andresearch design/plan chalked out. There are two types of data collection method:

Primary Data Secondary Data

PRIMARY DATA

Primary data arte those which are collected afresh for the first time, and thushappen to be original in character

SECONDARY DATA

Secondary data are those have already been collected by someone else and whichhave already been passed through the statistical process.

For the purpose of our study I have used both primary data and secondary data.This method of data collection is quite popular, particularly in case of bigenquiries, as the customer himself/herself becomes an advisors so his /her point ofview is must this can be obtained only with primary data

In secondary data I have used Internet, broachers of the company, companyswebsite magazines, newspaper. Reports and publications of various associationsconnected with industry. I

SAMPLE SIZE

Area of sampling is west Delhi only. The sample size 100 which include agegroup between 25-65 years with minimum Qualifications required being anadvisor in the company.


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ANALYSIS

Are you having an insurance policy?


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From which insurance company is you insured?

0

10

20

30

40

50

60

70

YES NO

70

30

VALUES INNUMBER

YES OR NO


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Do you think that insurance sector is giving agood return?

0

5

10

15

20

2530

35

40

LIC MAX OTHERS

38

12

20

VALUE INNUMBERS

COMPANY'S NAME


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Are you advisor too in any life insurancecompany?

0

10

20

30

40

50

60

70

YES NO

32

68

VALUES INNUMBER

YES OR NO
http://www.maxnewyorklife.com/Home.aspxhttp://www.maxnewyorklife.com/Home.aspxhttp://www.maxnewyorklife.com/Home.aspx


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If get an opportunity in future would you like tobe an advisor with Max New York Life Insurance?

0

5

10

15

20

LIC MAX OTHERS

20

4

12VALUESIN

NUMBER

COMPANY'S NAME


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0

102030

405060

7080

90

YES NO

17

83VALUES INNUMBER

YES OR NO


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R ECOMMENDATIONS

Recommendations

Max New York Life Insurance has to improve its brand image, i.e. ithas to position itself in the minds of prospects in a better way incomparisons to others.


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It should provide better career opportunities for the retention of its potential advisors.

Further it has to provide training to its recruited advisors by good andefficient training methods,

121783070 Max New York Life Insurance1

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