Anita Project

8/2/2019 Anita Project

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RESEARCH PROJECT REPORT

ON

National Distribution of Financial Services-

Life Insurance & Mutual Funds

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

of

PUNJAB TECHNICAL UNIVERSITY

By

ANITA RANI

MBA 3rd SEMESTERUNDER THE SUPERVISION OF

MRS. GAURAV KHURANA

CHANAKYA INSTITUTE OF MANAGEMENT,GHARUAN

2010-12


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Certificate of Supervisor

This Is To Certify That Ms. Anita Rani D/O sh. Rajinder pal,student of chanakya

institute of management village Gharuan,near kharar tehsil distt. Mohali

140413 Punjab, has undergone 6 weeks training withLEAP FINANCIAL

SERVICES{WWW.DAIABANK.COM} at Mohali, from 2nd june 2011 to 13th may2011.she has worked on the project national distribution of financial services

life insurance and mutual funds.

Supervisors signature:

Supervisors name:

Supervisors Designation:

Date:

Place:


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Declaration

I, hereby declare that the research project report titledNATIONAL

DISTRIBUTION OF FINANCIAL SERVICES LIFE INSURANCE AND MUTUAL FUNDS

is my own original research work and this report has not been submitted to any

University/Institute for the award of any professional degree or diploma.

ANITA RANI

M.B.A (Sem.) :- 3 Rd

ROLL NO. : -

CHANAKYA INSTITUTE OF MANAGEMENT, GHARUAN

Date:

Place:


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OBECTIVES OF THE PROJECT

The objective behind the conducting project exercise was to get useful insight

about the insurance sector. I have prepared this report with some specific

objectives. The objective is as under:

1. Proper understanding and analysis of life insurance industry.2. Conduct market survey on sample selected from the entire population andderive opinion on that research.

3. To help company in establishing a network of life insurance advisor and topromote the benefits those are provided by ICICI Prudential Life Insure. Co. ltd to

its life insurance advisor.


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PREFACE

For management career, it is very important to develop managerial skills. In

order to achieve positive and concrete results, along with theoretical concepts,the exposure to real life situation, existing in a corporate world is very much

needed. To fulfill this need, practical training is required.

I underwent summer training in LEAP FINANCIAL

SERVICES{WWW.DAIABANK.COM},MOHALI. It was my fortune to get training in

this organization. I got great opportunity to view the overall working of the

organization. In the forthcoming pages, I have attempted to present a report

covering different aspects of my training.

TABLE OF CONTENTS

CHAPTER

NO.

CONTENTS PAGE

NO

1. INTRODUCTION TO BANKING SECTOR


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INSURANCE SECTOR

INTRODUCTION TO INSURANCE SECTOR

Insurance is a cover used for protecting oneself from the risk of a financial loss. It

is important to understand that risk is a part of any persons life and that it

increases as a person increases in age, responsibility and wealth. Insurance is risk

coverage against financial losses and should not be taken as an investment

instrument.

There are mainly two parties involved in this the insurer and the insured. The

insurer is the insurance company who will provide the cover to the insured

against any financial losses. The insured may be an individual person or a group of

people like an employer, members of a society, etc.

A policy is the contract between the insurer and the insured, which states the

risks covered, the exclusions, if any, and the benefits reimbursed on the

happening of an event like death, illness etc. The policy is paid through what is

called a premium, which is a set amount that must be paid by the insured on a

monthly, semi-annual or annual basis. On the happening of an event like death,

disability, fire, etc, for which the insured is covered, the benefit amount stated in

the policy contract can be claimed by the insured.


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Classification of Insurance

There are mainly two broad classes of Insurance Life and Non Life.

Life insurance products include Term Life policies, which give a pure riskcoverage of only the death benefit, whereas endowment or money backpolicies have a risk as well as savings component i.e. death as well as

maturity benefit. Also coming under the life insurance umbrella are the

Unit Linked Policies in which there is a risk component and a savings

component, which is invested in equity, debt or gilt funds, depending on

the insurance company.

Non Life insurance products include property or casualty, health insuranceor house, fire, marine insurance etc. This insurance class deals with all the

non-life aspects of an insured like his/her house, health, land, office, cargo,etc which might bring financial loss.

Life Insurance Process Flow

The simplest life insurance business cycle looks like this:

The client approaches the insurer through an agent with a proposalcontaining his personal details, income details, medical history, products (

the product describes the features provided by the insurer like maturity

bonus, claims allowed etc. These features vary from product to product),

sum assured (the amount for which the client is covered), term (number of

years for which the client is to be covered) and premium amount


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(installment amount to be paid by the client to the insurer). The agent who

brings this proposal is termed as a base/servicing agent for the proposal.

The proposal will go through various stages of approval and risk evaluationby the Central Processing Centre of the Insurance Company. Upon final

approval, a legal agreement, termed as policy, between the insurer and the

client is prepared whereby the insurer covers the client for the sum

assured. The client is also entitled for some additional benefits, if any,

depending on the features of the product taken in the policy. The base

agent gets a commission for the policy.

The client pays a premium at regular intervals. These subsequent premiumsare termed as renewal premiums. The base agent gets a commission on the

renewal premium also.

The client may come back with some alterations to the policy viz.increase/decrease in sum assured, increase/decrease of the term of policy

etc. The insurer will make the relevant changes to the policy and will issue

endorsements stating the alterations made and their effect on the policy.

During the term of the policy, the client can submit claims. The insurermakes payment against the claim after verification. Depending on the type

of claim the policy is either terminated or is kept in force.

At the end of the term of the policy, the client gets the sum assured as partof the maturity benefit under life insurance policies. In addition to this the

client will get the maturity bonus and any other benefits depending on the

product feature.


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Insurance History

The story of insurance is probably as old as the story of mankind. The same

instinct that prompts modern businessmen today to secure themselves against

loss and disaster existed in primitive men also. They too sought to avert the evil

consequences of fire and flood and loss of life and were willing to make some sort

of sacrifice in order to achieve security. Though the concept of insurance is largely

a development of the recent past, particularly after the industrial era past few

centuries yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818.

Oriental Life Insurance Company started by Europeans in Calcutta was the first life

insurance company on Indian Soil. All the insurance companies established during

that period were brought up with the purpose of looking after the needs of

European community and Indian natives were not being insured by these

companies. However, later with the efforts of eminent people like Babu Muttylal

Seal, the foreign life insurance companies started insuring Indian lives. But Indian

lives were being treated as sub-standard lives and heavy extra premiums were

being charged on them. Bombay Mutual Life Assurance Society heralded the birth

of first Indian life insurance company in the year 1870, and covered Indian lives at

normal rates. Starting as Indian enterprise with highly patriotic motives, insurance

companies came into existence to carry the message of insurance and social

security through insurance to various sectors of society. Bharat Insurance

Company (1896) was also one of such companies inspired by nationalism. The

Swadeshi movement of 1905-1907 gave rise to more insurance companies. The

United India in Madras, National Indian and National Insurance in Calcutta and

the Co-operative Assurance at Lahore were established in 1906. In 1907,

Hindustan Co-operative Insurance Company took its birth in one of the rooms of

the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The

Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were

some of the companies established during the same period. Prior to 1912 India

had no legislation to regulate insurance business. In the year 1912, the Life

Insurance Companies Act, and the Provident Fund Act were passed. The Life

Insurance Companies Act, 1912 made it necessary that the premium rate tables

and periodical valuations of companies should be certified by an actuary. But the

Act discriminated between foreign and Indian companies on many accounts,

putting the Indian companies at a disadvantage.


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The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 crores, it

rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During

the mushrooming of insurance companies many financially unsound concernswere also floated which failed miserably. The Insurance Act 1938 was the first

legislation governing not only life insurance but also non-life insurance to provide

strict state control over insurance business. The demand for nationalization of life

insurance industry was made repeatedly in the past but it gathered momentum in

1944 when a bill to amend the Life Insurance Act 1938 was introduced in the

Legislative Assembly. However, it was much later on the 19th of January, 1956,

that life insurance in India was nationalized. About 154 Indian insurance

companies, 16 non-Indian companies and 75 provident were operating in India at

the time of nationalization. Nationalization was accomplished in two stages;initially the management of the companies was taken over by means of an

Ordinance, and later, the ownership too by means of a comprehensive bill. The

Parliament of India passed the Life Insurance Corporation Act on the 19th of June

1956, and the Life Insurance Corporation of India was created on 1st September,

1956, with the objective of spreading life insurance much more widely and in

particular to the rural areas with a view to reach all insurable persons in the

country, providing them adequate financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from itscorporate office in the year 1956. Since life insurance contracts are long term

contracts and during the currency of the policy it requires a variety of services

need was felt in the later years to expand the operations and place a branch

office at each district headquarter. Re-organization of LIC took place and large

numbers of new branch offices were opened. As a result of re-organisation

servicing functions were transferred to the branches, and branches were made

accounting units. It worked wonders with the performance of the corporation. It

may be seen that from about 200.00 crores of New Business in 1957 the

corporation crossed 1000.00 crores only in the year 1969-70, and it took another10 years for LIC to cross 2000.00 crore mark of new business. But with re-

organisation happening in the early eighties, by 1985-86 LIC had already crossed

7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional

offices, 8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide


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Area Network covers 109 divisional offices and connects all the branches through

a Metro Area Network. LIC has tied up with some Banks and Service providers to

offer on-line premium collection facility in selected cities. LICs ECS and ATM

premium payment facility is an addition to customer convenience. Apart from on-

line Kiosks and IVRS, Info Centres have been commissioned at Mumbai,Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many

other cities. With a vision of providing easy access to its policyholders, LIC has

launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner

and closer to the customer. The digitalized records of the satellite offices will

facilitate anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of

Indian insurance and is moving fast on a new growth trajectory surpassing its own

past records. LIC has issued over one crore policies during the current year. It hascrossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,

posting a healthy growth rate of 16.67% over the corresponding period of the

previous year.

From then to now, LIC has crossed many milestones and has set unprecedented

performance records in various aspects of life insurance business. The same

motives which inspired our forefathers to bring insurance into existence in this

country inspire us at LIC to take this message of protection to light the lamps of

security in as many homes as possible and to help the people in providing security

to their families.

LIFE INSURANCE IN INDIA

The British companies started life insurance business in India, by issuing policies

exclusively on the lives of European soldiers and civilians. They sometime issued

policies on the lives of Indians by charging extra. Different insurance companies

like Bombay Insurance Company Ltd. (1793) and Oriental Life Assurance Company

(1818) was formed to issue life assurances policies in India. Gradually, the first

Indian Company named as Bombay Mutual Life Insurance Society Ltd. Was

formed in Dec. 1870. By 1971, the total number of companies working in India

was 15, out of which 7 were Indians and the remaining were British companies.


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During the period from 1870 to 1900, a large number of Indian Companies were

formed under the Indian Companies Act; 1866. The business was confined to few

communities and occupations only. During the period from 1900 to 1913, the

insurance business attracted attention among middle class people. As a result

Government of India passed the Insurance Act on the model of British Assurance

Act. During the period from 1912-1930, the insurance business witnessed a set

back.

After several changes have been made for the period from 1930 to 1938, the

government of India passed Insurance Act; 1938. The act still applies to all kinds

of insurance business by instituting necessary amendments from time to time.

The act was amended in 1950 resulting in far reaching changes in the insurance

sector . By 1956, 154 Indian insurers 16 foreign insurers and 75 provident society

were carrying on life insurance business in India then it was taken over by central

govt. life insurance corporation (LIC) was formed in sept. 1956 by an act of

parliament with a capital contribution of Rs. 50 mn.

India already boasts of a good GDS rate of about 22% but less then 5% of it is

spend on insurance. & Premium as a share of GDP is 2 %.


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CURRENT SCENARIO IN INDIA

The privatization of insurance sector in 2008 has ushered in dynamism in thefield. The life insurance corporation of India has been shaken up from its deep

slumber and has been on guard to gear up for competition.

Private companies have entered into the fray with joint ventures with foreign

companies. This has been done to utilize their expertise in the field and give an

opportunity to professionally managed companies to win the confidence of the

people. These companies have launched a number of innovative products after

carrying out deep research on the requirement of the prospective customers.

TYPES OF LIFE INSURANCE

Term insurance plansTerm insurance plans are commonly known as pure protection plans. This is

a pure insurance cover where only the risk of death is covered for a

specified period. If the insured does not die within the specified period,then no payment is made under the term insurance plan. This is also the

cheapest form of life insurance as mortality charges and administration

expenses incurred in booking the policy are the only components of the

premium.

Being the cheapest life insurance policy, one can get a substantially high life cover

(sum assured) with a nominal premium amount. Therefore, a person gets to

protect his family's financial security at a very low cost. By paying an amount as

low as Rs.6000 per year, one can secure their family's future to the tune of

50lakhs.

Whole life insuranceWhole life insurance policies are very similar to term insurance plans. This

is a term plan with an unlimited term. As the name suggests, a whole life
http://www.myinsuranceclub.com/life-insurance/term-insurancehttp://www.myinsuranceclub.com/life-insurance/term-insurance


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policy is an insurance cover against death, where the sum assured is

payable only on death, whenever it may occur.

Under this plan, the policyholder pays regular premiums until his death (till a

claim arises), following which the payment is made to the nominee or the

claimant. Although, in the case of Whole Life policies, the sum assured is payable

only on death, many insurance companies pay the sum assured, when the life

insured reaches a particular age. Earlier a lot of insurance companies used to

make this payment at the age of 100 years and recently many have dropped it

down to 75 years.

Premium is usually paid till the sum assures becomes payable but many insurers

provide an option to pay premiums for a limited period. Such policies would be

called as Limited payment policies. People who are skeptical of the consistency of

their earnings and expect it to discontinue or drop substantially over a period of

time may prefer limited payment policies. This is often the case with professionals

like sports personalities, skilled artists and armed forces personnel. Many a times,

a person has or receives a lump sum amount from somewhere and is not sure

whether he will be able to pay the same amount every year. For such customers,

there is an option to pay the premium only once. Such a policy where the

premium is payable only for one year at the beginning of the policy is called as

a single premiumpolicy. The premium for a whole life insurance policy would

surely be higher than a pure term insurance plan and unlike a term plan where

the cover is for a specific period, a whole life insurance policy doesnt attach a

policy term and is valid till the death of the policy holder, whenever it may occur.

Endowment assurance policyEndowment assurance policy is a combination ofterm insurance plan and a

pure endowment plan, under which the sum assured, is paid on survival of

the specified period or on earlier death. In this type oflife insurance

policy there is both a death benefit or the maturity benefit. In an

endowment assurance policy, the sum assured is payable on survival to theend of the term or on earlier death. Like in the case of the whole life

insurance policy, the premium in an endowment plan is also payable till the

sum assured becomes payable that is, till a claim arises.
http://www.myinsuranceclub.com/life-insurance/term-insurancehttp://www.myinsuranceclub.com/life-insurance/http://www.myinsuranceclub.com/life-insurance/http://www.myinsuranceclub.com/life-insurance/http://www.myinsuranceclub.com/life-insurance/http://www.myinsuranceclub.com/life-insurance/term-insurance


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In this plan, if the policy holder dies before the maturity of the policy, then his

nominee would get the sum assured or the death benefit and the policy

terminates. However, if the policy holder survives till the end of the term, then he

gets the maturity benefit according to the terms and conditions of the policy. So

he stands to gain in both ways.

An endowment policy is also a form of financial saving, as in if the person covered

remains alive beyond the term of the policy. he gets investment benefits, usually

referred to as guaranteed additions, in addition to the sum assured. A term

insurance plan with a pure endowment plan of double the value is called a Double

Endowment Assurance plan. Then there are other types of endowment, like

a marriage endowment plan, which stipulates the date on which the sum assured

will be pad if the life insured dies early. This policy enables the policy holder to

choose the date of maturity to coincide with a specific age of his/ her child, tomake available the sum assured at a particular time for their marriage. Another

endowment plan option is the Educational Annuity plan, where the sum assured

would be paid in installments, commencing from a date which may be chosen as

the likely date when the child is pursuing higher or professional education.

Earlier, the maturity period of the endowment policy used to be at a certain age

say 75, but of late insurance companies have come out with a fixed term

endowment policy or limited term endowment plans, for example a 20-year

endowment policy or a 25-year endowment assurance plan.

Often, insurance companies introduce an endowment assurance plan in 2

variants, that is, a with profit or without profit policy. With profit policy also

known as participating policy enjoys the right to participate in the growth of the

insurance company and is eligible for bonuses. On the other hand, Without profit

or Non-participating policy is not entitled to any bonus declared by the insurance

company and hence are not very popular too. But one has to pay an extra

premium in the participating endowment policy as compared to the non-

participating endowment policy.

Money back insurance policyMoney back insurance policyIn the insurance terminology this is

called Anticipated Endowment Plan, meaning that the customer can

anticipate when the sum assured would be paid to him. In money back


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insurance policy, a certain percentage of the sum assured comes back to

the policy holder on survival after say every 3 or 5 years, as pre-

determined. This is also referred to as a survival benefit. The common

example used is, consider 20% of the sum assured is paid every 5 years and

40% on survival for a 20-year term and full sum assured is paid in case ofdeath at any time during the 20 years. If the policy holder dies before the

policy matures, then the entire sum assured is paid to the family as death

benefit, irrespective of the survival benefits paid or not. It is effectively a

combination of a term insurance plan for 20 years for full sum assured and

4 different pure endowment plans, that is, 20% sum assured for 5 years,

20% sum assured for 10 years, 20% sum assured for 15 years and 40% sum

assured for 20 years.

children plans

As the name suggests, child insurance policy or children plans means an

insurance policy on the lives of children, who are not majors. Since the age

of child is below 18 years, the proposal will have to be made by a parent or

a guardian. One of the advantages of child insurance plans is that the

premium which will be considered at the commencement of the policy is

relatively lower because of the young age. Usually, a child insurance plan

can be purchased when the child is 3 months old (or 91 days of age).

However, the risk cover on the life of the insured child will commence only

when the child attains a specified age. This clause is according to the rules

ofIRDA (Insurance Regulatory and Development Authority). Such a time

gap between the date of commencement of the insurance policy and the

commencement of the risk is called the Deferment period. The date, on

which the risk will commence, at the end of the deferment period is called

the Deferred Date.

Let us explain the basic concept of a child plan with Ranjans example. He is

27 years old, married with a 2-year old daughter. He purchases a child plan

for his daughter Sameera. Ranjan has now covered his daughter under thechild insurance plan but her life cover doesnt start till she is 7 years old.

However, the plan continues as usual and no mortality charge is deducted

till Sameera reaches 7 years of age; this is because her life cover doesnt

start till such time. The day her life cover starts, i.e. the first policy

anniversary after her 7th birthday, is called the Deferred Date. From this
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day onwards the life cover of the child Sameera starts, i.e. if she dies after

the deferred date her family would get the entire sum assured. But if she

had died before the deferred date, her family would only get back the

premiums paid and no sum assured would be payable. When Sameera

attains 18 years of age or any later date as may be chosen, the title of thepolicy automatically passes on to her name. This process is called

as Vesting. Therefore, the day on which the policy contract is transferred

from Ranjan to Sameera, i.e. the first policy anniversary after her 18th

birthday, is called the Vesting Date. After vesting, the insurance policy

becomes a contract between the insurance company and Sameera.

This life insurance policy covers the risk of the childs life. This is a

distinctive plan as the entire amount payable gets transferred in the name

of the child once he/ she is 18 years old. Thus it becomes a big asset for the

childs future to take care of various financial commitments and pursue

higher education, professional courses, develop skill sets, travel places, plan

other investments and many others.

Retirement planRetirement plan Pension plan or retirement plan is useful to save money

during a persons income-earning days to provide for regular periodical

payments during his/ her retirement days. Pension payments are also

known as annuities and are paid as long as the recipient is alive. In certainpolicies, even after the pensioners or the recipients death, the pension or

annuity is paid to the spouse or nominee. In an annuity, the insurer agrees

to pay the insured a certain sum of money at regular intervals. The purpose

of an annuity is to protect against the risk of living too long as well as

provide money in the form of pension periodically. In practice, there is no

medical underwriting done in case of annuity contact since there is no

death risk cover attached.

One may interpret the concept of annuity as a reverse of life insurancecontract. In a life insurance contract, the person agrees to pay regular

payments, that is, premiums, in consideration for a lump sum amount to

him on maturity or his nominee on death. On the contrary, in a retirement

plan (annuity contract), the person agrees to pay a specific amount (also

referred to as capital) to the insurance company and in return the
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insurance company promises to make regular periodic payments to him as

long as he/ she is alive.

A lot of basic policy formations discussed theoretically may have many

variations in actual practice. For example, the capital for a retirement plan

need not be paid in lump sum at the start of the policy; it can also be paid

in installments like insurance premiums over a period of time before the

vesting date or start receiving annuity and continue paying premiums.

Unit linked Insurance Plan (ULIP)Unit linked Insurance Plan (ULIP) is a type of life insurance plan that

provides benefits of protection against risks and flexibility to manage the

investments of premiums. Part of the premium paid by the customer goes

towards the sum assured and the balance is invested in venues ofinvestment desired by the policy holder. There are usually three different

venues for investment which are equities, debt instruments and liquid

assets; the policy value at anytime keeps varying as per the value of the

assets chosen by the insured or insurance company. Based on the

combination of assets invested in, the investment corpus after deducting

the charges is broken into smaller units and these units carry a price or a

value which it has attained called as the Net Asset Value (NAV). Thus NAV is

the price per unit. The net investment corpus which remains after

deducting the various charges from premiums and adding returns, if any, iscalled as the Fund value

When people see how investments in the capital market have grown in the

last few years, they prefer to use their funds to participate in the boom of

the capital market. With ULIP plans, Insurance companies combine the

benefits of life insurance as well as give options to reap benefits from the

growth of the capital market. ULIPs are basically insurance plans along with

an investment component. The investment is done according to the risk

profile of the customer and the choice of the customer. The risk ofinvestment is borne by the customer and the returns are marked to the

market and hence are not guaranteed.


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Usually, every ULIP has at least 4 funds to choose from. The most common fund

options are - Equity/ Growth, Balanced, Debt and Secure/ Liquid Fund. The

objective of each fund would differ and you as a customer would get to choose

from one or more funds. The equity fund would have about 60 to 100% exposure

in equity depending on the speculation of the fund

managers about the markets. The debt fund invests primarily in

government bonds, securities and fixed deposits, and other fixed interest

securities. The balanced fund is a combination of equity and debtinstruments. Finally, the liquid or secure fund invests in the money market.

It invests in instruments like commercial papers, treasury bills etc.

The policy holder also has the option to partially withdraw money from his

fund after completion of 3 years. Every year the policy holder also gets the

option to contribute extra money over and above his premiums to his

investment corpus, referred to as top-up premium. There are many flexible

features offered to the policyholder to allow him derive maximum from his

investments.

Some plans offer a minimum guarantee of return on death or maturity but

most of the plans dont offer any guaranteed benefit. The death benefit in

ULIPs is equal to the sum assured, where the minimum return is the sum

assured but the maximum return may vary according to the fund

performance.


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Advantages of Life Insurance

Risk Cover - Life today is full of uncertainties; in this scenario Life Insurance

ensures that your loved ones continue to enjoy a good quality of life against anyunforeseen event.

Planning for life stage needs - Life Insurance not only provides for financialsupport in the event of untimely death but also acts as a long term investment.

You can meet your goals, be it your children's education, their marriage, building

your dream home or planning a relaxed retired life, according to your life stage

and risk appetite. Traditional life insurance policies i.e. traditional endowment

plans, offer in-built guarantees and defined maturity benefits through variety of

product options such as Money Back, Guaranteed Cash Values, Guaranteed

Maturity Values.

Protection against rising health expenses - Life Insurers through riders or standalone health insurance plans offer the benefits of protection against critical

diseases and hospitalization expenses. This benefit has assumed critical

importance given the increasing incidence of lifestyle diseases and escalating

medical costs.

Builds the habit of thrift - Life Insurance is a long-term contract where aspolicyholder, you have to pay a fixed amount at a defined periodicity. This builds

the habit of long-term savings. Regular savings over a long period ensures that a

decent corpus is built to meet financial needs at various life stages.

Safe and profitable long-term investment - Life Insurance is a highly regulatedsector. IRDA, the regulatory body, through various rules and regulations ensures

that the safety of the policyholder's money is the primary responsibility of all

stakeholders. Life Insurance being a long-term savings instrument, also ensures

that the life insurers focus on returns over a long-term and do not take risky

investment decisions for short term gains.

Assured income through annuities - Life Insurance is one of the best instrumentsfor retirement planning. The money saved during the earning life span is utilized

to provide a steady source of income during the retired phase of life.

Protection plus savings over a long term - Since traditional policies are viewedboth by the distributors as well as the customers as a long term commitment;

these policies help the policyholders meet the dual need of protection and long

term wealth creation efficiently.


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Growth through dividends - Traditional policies offer an opportunity toparticipate in the economic growth without taking the investment risk. The

investment income is distributed among the policyholders through annual

announcement of dividends/bonus.

Facility of loans without affecting the policy benefits - Policyholders have theoption of taking loan against the policy. This helps you meet your unplanned life

stage needs without adversely affecting the benefits of the policy they have

bought.

Tax Benefits-Insurance plans provide attractive tax-benefits for both at the timeof entry and exit under most of the plans.

Mortgage Redemption- Insurance acts as an effective tool to cover mortgagesand loans taken by the policyholders so that, in case of any unforeseen event, the

burden of repayment does not fall on the bereaved family.

Mental peace-The most important benefit of life insurance is that it assuresmental peace. When a person goes for life insurance, he and his family are

relieved from worries of future. Thus, it ensures mental peace.

Financial Security-The policy of life insurance provides economical security to thefamily of the policy holder in case of death of the breadwinner. On occurrence of

this unfortunate event, the family is forced with a cash crunch. But by availing a

life insurance policy, this problem of cash crunch is solved by a lump sum amount

paid by the insurer.

Loan in case of need-There are circumstances in life when the individual needsfunds but is unable to get from various sources. The life insurance policy alsoprovides a solution to this problem as loan can be taken against the policy and

need not be repaid as the loan amount is deducted from the police value on

maturity.

Cover for whole life-The life insurance policy provides coverage for the whole lifeof the policyholder. It also provides protection in cases of serious illness.

Tax-free source of savings-In addition it is a source of savings which is completelytax-free

Source of mitigating certain liabilities-The life insurance policy provides a greatsource to satisfy certain needs and liabilities like loans and mortgages.

Maintenance of living standard-The life insurance policy helps in maintaining theliving standard of the family even after the death of the breadwinner by providing

financial benefits to the family.

Enhanced coverage-The policy provides enhanced coverage by providing formedical benefits.


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Disadvantages

Expensive-The life insurance can prove to be a costly affair, particularly whensuffering from illness and regarded by insurers as High Risk due to some reasons

like old age etc.

Irrelevant in case of no-family person-The life insurance policy is irrelevant for anindividual who is not having any family or dependents

Increasing premiums-The premium payable increases with the increase in age.But the income gradually decreases which makes it difficult to strike a balance.

No benefit in case of long life-Some policies do not provide any cash benefit onthe policy holder surviving the policy term. In that case, amount paid for

premiums is wasted.

Objective

As Income Replacement: In the event of your death, your family will lose theirfinancial support especially if you are the major bread-winner of the family. When

you die, you lose the wages as well as the retirement savings contributions which

you would get. he role of the life insurance here serves as an income replacement

which would get your family to move on with their lives without any financialstress.

House mortgage and Debt payoff: Life insurance can be applied to pay off yourmortgages, credit card debts or any other types of debts , which will definitely

become a burden for your family if you have no plan to settle them after you are

gone.

Children Education fees: If you have children who will be in college in the next 10-20 years, then planning on how you can leverage Life insurance coverage for part

of your children's education needs, or all of them are essential. Bear in mind that

education is very crucial for anyone in this society. It is the one last thing whichyou should help your children with if while you still can.

Emergency Fund: Emergencies include health and medical expenses, layoffs,retrenchments which are not planned. Life insurance is definitely a great savior

here in time of emergencies and critical situation


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Charitable Giving: If you don't have any family or any debt obligation, you canalways use your permanent life insurance for some great means of yours such as

charitable giving. Identify those charity organizations which you would like to

make contributions to and identify them as your beneficiaries.

Final Expenses for yourself: These can be those final expenses which need to betaken care of even after you are gone from this world. Such as the charges for

your funeral and Burial arrangement, your large medical or nursing home bills

during the last 2-3 months of your life if you are dying with serious illness. Life

insurance is a fine candidate as far as these unexpected bills is concerned.

Guidelines

Calculate the amount of life insurance coverage you and your family wouldtruly need in the event a tragedy occurs. What would be required in order

for your dependents to maintain a reasonable standard of living?

Buy low-load insurance policies which pay minimal up front commissions toan agent as this will help minimize your overall insurance expenses and

keep the ratio of commissions to premiums as low as possible. Work with

an independent insurance agent who does not work for only one insurance

carrier, youll want an agent who represents many different companies as

this will help assure you the least expensive, highest quality policy

available. Also take advantage of any online resources to assist you in your

shopping and price comparisons and be sure to check insurance company

ratings as you want to ultimately buy your policy from a solid highly rated

company.

Buy a policy of insurance that covers only the period of time during whichyou are exposed to risk. For a period of 30 years or less, term life

insurance is likely your best, most cost-effective coverage option.


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When unsure of the time frame you require for coverage, it may be wise topurchase a policy with a conversion option that would allow you to convert

from a standard term policy to a policy of whole life. Be aware that the

trade off involved in having the conversion option is of course a higher cost.

Create and customize your own whole life policy by purchasing a policy ofterm life and using the savings or spread in your premiums to invest in an

IRA or to pay off any high interest debt youve accumulated.

Only use whole and universal life as a tax-sheltered investment vehicle ifyou have exhausted all other sources of tax-advantaged savings (i.e. IRAs,

401(k) and the like).

Before purchasing whole or universal life compare the associatedinvestment options of the policy to all other tax-sheltered investment

vehicles to determine which options will truly help you meet your long

range objectives.


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LEAP FINANCIAL SERVICES

FINANCIAL SEARCH.SIMPLIFIED

With 96 Banks, 48 Mutual Fund Companies and 23 Life Insurance companies in

India, the choice available to a consumer is high and so is the challenge in finding

the most suitable product. Dial-A-Bank has been created with the objective of

helping clients overcome this challenge and make their Financial Life EASY.

Dial-A-Bank is promoted by a group of senior corporate executives having a

combined experience of over 45 years in the financial services sector. The

understanding of financial products and experience of managing client

relationships helps make the offering practical and valuable.

The Service is available on Phone and Internet and is backed by a detailed

research of the products available from leading providers across Banks, Mutual

Funds and Insurance Companies. The Tele Relationship Managers are trained tounderstand client requirements and provide information on relevant and suitable

offers available in the market.


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PRODUCTS AND SERVICES

PROPERTY

LOAN

PERSONAL

LOAN

BUSINESS

LOAN

LIFE

INSURANCE

OTHER

PRODUCTS

PROPERTY LOAN

Types of Home Loans

The Housing Finance Companies (HFCs) now offer individuals with various

alternatives to choose from while buying a home loan. And the availability of

Home Loans offered is as varied as their requirements.

Home Purchase loans: This is a basic type of Home Loan for the purchase of a

new home. This type of home loan is for the purpose of buying a flat in a society

or purchasing an already built house.

Home Construction Loan: these home loans are provided for the construction of

a new home. If you have purchased this plot within a period of one year beforeyou started construction of your house, most HFCs will include the land cost as a

component, to value the total cost of the property.

Home Improvement Loan: These loans are given for implementing repair works

and renovations in a home that has already been purchased by you. It may be

requested for external works like structural repairs, waterproofing or internal

works like tiling and flooring, plumbing, electrical work, painting, etc.

Home extension Loan: An extension loan is one which helps you to meet the

expenses of any alteration to the existing building like extension/ modification of

an existing home; for example addition of an extra room etc.


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Home Conversion Loan: This is available for those who have financed the present

home with a home loan and wish to purchase and move to another home for

which some extra funds are required.

Land Purchase Loan: Land Purchase Loans are available for purchase of land forboth home construction or investment purposes. So, you can be granted this loan

even if you are not planning to construct any building on it in the near future.

Stamp Duty Loans: These loans are sanctioned to pay the stamp duty amount

that needs to be paid on the purchase of property.

Bridge Loans: Bridge Loans are designed for people who wish to sell the existing

home and purchase another. The bridge loan helps finance the new home, until abuyer is found for the old home.

Refinance Loans: These loans help you pay off the debt you have incurred from

private sources such as relatives and friends, for the purchase of your present

home.

NRI Home Loans: This is tailored for the requirements of Non-Resident

Indians who wish to build or buy a home or property in India.

Dialabank.com helps you find the most suitable offer for

Home Loan

Personalised Service: Our trained Relationship Managers will understand your

requirements and your profile and help you find the most suitable Home Loan

offer.

Rate Comparison: We help you understand the details of all costs involved in

taking a Home Loan and help you find the Cheapest Offer.


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Research: Benefit from our detailed research on all the products from the leading

Home Loan players in the market and make the right choice.

Zero Charges: Dialabank offers personalised service to its customers at zero fees.

Use our services to find the right Home Loan deal at no extra cost.

Unbiased and Transparent Search: Our objective is to simplify your Home Loan

search and we provide information in an unbiased and transparent manner

Types Of Interest On Home Loan

Fixed interest rate home loans allow the repayment in fixed equal monthly

installments over the entire period of the loan. The interest rates in such a case

are fixed and dont change with market fluctuations. A fixed rate home loan is

excellent for those who are good at budgeting and want a fixed monthly

repayment schedule, which is easy to budget and doesn't fluctuate.

Floating interest rate home loans are tied up to a base rate plus a floating

element thereof. So, if the base rate varies the floating interest rate also varies. If

the floating rate goes over the fixed rate, it will be for some period of the loan not

for the entire tenure. The interest rates will surely fall over a long period and thus

floating interest rate brings a lot of savings.

Income Tax deduction on Interest paid on the Home

Loan

As per Sec 24(b) of the Income Tax Act, 1961 a deduction up to Rs. 150,000

towards the total interest payable on the home loan towards purchase /

construction of house property can be claimed while computing the income from

house property. (The deduction stands reduced to Rs 30,000 in case of loans

taken prior to March 1, 1999). The interest payable for the pre-acquisition or pre-

construction period would be deductible in five equal annual installments

commencing from the year in which the house has been acquired or constructed.


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Tenure Of The Home Loan

Loans are usually for a maximum period of 15 years (which may go up to 20 years

in some cases). Longer tenure loans have smaller monthly installments. You can

still get a large loan on a relatively small monthly salary by choosing to take alonger period loan. However, longer period loans maybe more expensive (higher

rate of interest) even though the monthly installment payment is lower.

Documents Required

Most importantly, all Home Loan deals and offers agreed upon are supported by

relevant papers. Self employed and salaried require different documents to

support the deal.

So make sure you always ask for a letter on the banks letterhead mentioning the

likes of, exact rate of interest, processing fees, pre-payment charges along with

interest-schedule.

Before signing the Home Loan documents, make sure you recheck all terms and

conditions.

Do make sure you understand and agree with each of the clauses in the

documents. Do not sign any blank documents.

Documents required for Home Loan are different for salaried and self employed:

Salaried Individuals Self-Employed/Businessmen If a flat is purchased from the builder If the property is being purchased is in Cooperative Society If constructing on own land

Home Loan Eligibility

When computing loan eligibility, banks take into account the age of the applicant,

his salary, repayment/credit history, savings, profession, location of property, and

other debts. Some professions are categorized as negative or risky by the lenders

while some jobs fall in the preferred list. As a thumb rule, the EMI for your home

loan must not exceed 40 percent of your gross monthly income.


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Following are other factors helping in evaluation of home loan eligibility:

Nature of Job of Individual: Nature of Job of the Individual: Most home financingcompanies carry a list of 'negative' professions. This can cause a lot of hassles for

the individual coming from such professions before being finally getting the loan

amount

Location of the Property: Likewise, they may consult another list known to carry'negative areas'. Any individual applying for the loan to get a home in such

areas may not be granted the loan by home finance companies. The same is the

case with the property falling within the geographical limits as defined by the

home financing institutions. Personal Details of individual: Personal details of the individual are another

factor that is taken into account by home finance companies. It may or may not

contain credit history of the individual as per the formalities to be filled with the

concerned institution. All these factors help the lenders in deciding the

individual's home loan eligibility.


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Charges For Home Loans

Before applying for home loan, know the rate of charges, penalty or fee charged

by your lending company or bank for default in monthly EMI. Know the processing

charge and in case you decide to switch your loan from current lender to new

lender, current lender will charge penalty or fee for pre-closure of your loan.

Name Of The Bank Interest Rates Apply

State Bank Of India

8.75%- 10% Apply For SBI HomeLoan

HDFC Ltd. 9.75%- 10.25% Apply For HDFC

Home Loan

AXIS Bank 9.75%- 10.25% Apply For AXIS

Home Loan

ICICI Bank 9.50% - 10.00% Apply For ICICI

Home Loan

Standard CharteredBank

9.75% Apply For SCBHome Loan

DHFL 10.25%- 11.00% Apply For DHFL

Home Loan

Bank Of Baroda 10.00% - 11.50% Apply For BOB

Home Loan

Reliance Consumer

Finance

10.25% - 10.50% Apply For Reliance

Home Loan

HSBC

10.00% - 13.00% Apply For HSBCHome Loan

Citibank

10.00% - 10.75% Apply For Citibank

Home Loan
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PERSONAL LOAN

Dialabank.com helps you find the most suitable offer for

Personal Loan


requirements and your profile and help you find the most suitable Personal Loan

offer.


taking a Personal Loan and help you find the Cheapest Offer.


Personal Loan players in the market and make the right choice.

Zero Charges: Dialabank offers personalised service to its customers at zero fees.Use our services to find the right Personal Loan deal at no extra cost.

Unbiased and Transparent Search: Our objective is to simplify your Personal Loan

search and we provide information in an unbiased and transparent manner

Types of Personal Loan

Secured Personal Loan

A secured loan is guaranteed by property and, therefore, has a lower interest

rate. For example, a mortgage is a secured loan, guaranteed by the home itself. If

the borrower defaults on the loan, the lender can take possession of the home to

recoup the money on the defaulted loan. The fact that the lender has the

collateral in case of default is part of what drives down interest rates on secured

loans.

Unsecured Personal Loan

Unsecured personal loans are the loans which are provided by financialinstitution without any collateral security, this means that there is no risk on

owned property. A personal loan -- one without collateral -- for the same amount

is not as safe for the lender. Because of this, the lender charges higher interest

rates to balance out the greater risk. Even though the interest rates on personal

loans are higher than those of secured loans, personal loan interest rates are

usually still lower than credit card rates -- at least after the initial teaser rates.


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Bad credit Personal Loan

This Kind Of Personal Loan is the best option when one is stuck in a bad credit

situation. Specially designed for people with blotted credit history, this personal

loan option gives them the opportunity to get out of the financial crisis andimprove their credit history too, but at higher interest rate and a very stringent

repayment plan.

Personal Loan Eligibility

Personal Loan for Salaried:

Applicant should be Indian Citizens. Minimum age required is 21 years and Maximum 58/60 years. Minimum work experience of one month in current company and 3 years

overall.

Minimum net take Home - Rs.20, 000/- per month. Residence-either Owned, rented or company provided. Telephone/ mobile mandatory at residence. Currently most of the banks are providing unsecured personal loans only to

employees of Private Ltd, Limited and Multinational Companies.

Personal Loan for Self Employed:

Applicant should be Indian Citizens Minimum age required is 23/25 years and Maximum 65 years. Minimum 3 years experience in same business. Minimum income Rs. 2.50lakh per annum. Residence/Office -either Owned, rented or company provided either

residence or Office should be self owned. Telephone/ mobile mandatory at residence and office. Partnership firms, Private Ltd. companies and deemed Limited companies

are eligible


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Personal Loan Documentation

Usually the procedure of Approval of personal loans is quick and a loan is

approved with simple documentation.

For Salaried Employees

Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence). Address Proof (Ration card Tel/elect. Bill/ Rental agreement / Passport

copy/Trade licence /Est./Sales Tax certificate)

Bank Statements(latest 6 months bank statement /passbook) Latest salary slip or current dated salary certificate with latest Form 16

For Self - Employed

SelfEmployed Persons and Professional ( Doctors / Lawyers / Engineers /

Architects ), except for the salary statements above, other documents such as tax

return documents, Balance Sheet / Profit Loss Statement of the firm he owns may

be required.


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Personal Loan - Rate of Interest

SALARIED INDIVIDUALS

Name Of

The Bank

CAT A CAT B Others

SBI 16.75% 16.75%-20% 16.75%-20%

HDFC 15.5%- 19% 15.5%-19% 22%

AXIS Bank 16% 18% 19%-23%

Standard

Chartered

16% - 17% 17% - 18% 19% - 22%

Bank Of

Baroda

15.50% 16% N.A.

Citibank 16%-17% 17%-18% 18%-19%

Fullerton

India

19% 21%-23% 21%-28%


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Business Loan

Dialabank.com helps you find the most suitable offer for Business Loan


requirements and your profile and help you find the most suitable Business Loan

offer.


taking a Business Loan and help you find the Cheapest Offer.


Business Loan players in the market and make the right choice.


Use our services to find the right Business Loan deal at no extra cost.

Unbiased and Transparent Search: Our objective is to simplify your Business Loan

search and we provide information in an unbiased and transparent manner.

What is a Business Loan

If you own a business, you will need money to run it smoothly. When you run out

of money, you might face difficulties to run your business. Business loans are

sought for the purpose of expansion and growth of a business.Business loans are

provided by various banks to business people for their short or long term financial

needs. For any business whether in initial stage or in growth phase, capital is

required to keep up the momentum,Acquiring a right kind of office space is

essential for the success of the business. And to fulfil these purposes variousprivate and public sector banks provide business loans to facilitate individuals

realize their dreams.


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Purpose of a Business Loan

Businesses raise their capital by inviting shares and debentures or simply

borrowing from banks and other lending institutions. And the purpose of doing

so could be different

Expansion of an existing business Compensating a deficit in the operating capital Designing a new concept or product in a new business Starting a new business

Types of Business Loans

Secured Business Loans: In secured Business loans, the borrower promiseshis assets as collateral against the Business loan. In return, the creditor

grants the loan. The assets he or she pledges then become a 'secured loan'

or In case of a default, the creditor gets the possession of the collateral. As

a result, the creditor can recover or regain the amount of the money

loaned by selling the collateral.

Unsecured Business Loans: Unsecured Business loans are the exactopposite of secured ones. It is a kind of a loan or debt, which is not

supported by collateral. It is difficult to get an unsecured Business loan;

however, it is cheaper at the same time. Here, the credit rating of the

business matters. It is basically an assessment of the repayment capabilities

of the business.

Professional Loans: Professional loans, as their very name suggests, areprovided to self employed professionals like Doctor, Chartered Accountant,

Interior Decorator, Architect, Company Secretary, etc. Unsecured in nature,

this type of loan is not given to manufacturing, trading or processing units.

The amount of loan varies between Rs. 25000 to Rs. 25lakh, considering the

age of the applicant, his financial standing, his repayment capacity, tenureof the loan (maximum 5 years), etc.

Trade Loans: Trade loans are provided to traders/ businessmen, so as tohelp them either open a new business or operate/expand an existing one.

The amount of loan varies between Rs. 25000 to Rs. 100 lakh, considering


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the age of the customer, his financial standing, his repayment capacity,

tenure of the loan, etc.

Short-term Business Loans: Used for short-term working capitalrequirements and paid within 1 year.

Intermediate Business Loans: Used for new business, to build inventory,buy equipment or increase working capital, and paid between 1 and 3

years.

Long-term Business Loans: Used for well established business, to increasefixed assets, for related business acquisitions or expansion, and paid

between 3 and 5 years. At times, used for start-up business, to purchase

land or buildings, fund construction efforts or finance long-term working

capital.

Documents Required For Business Loans

Business Loan Documents For Professional Loans

Proof of Identity (Passport Copy/ Voters ID Card/ Driving License) Address Proof (Ration Card/ Telephone Bill/ /Electricity Bill/ Passport) Bank Statements (latest 6 months bank statement /passbook) Latest ITR, along with computation of income Balance Sheet & P&L Account for the last 2 yrs, certified by a CA Qualification Proof of the Highest Professional Degree Proof of Continuation (Trade license /Establishment /Sales Tax Certificate) Other Mandatory Documents (Sole Proprietorship - Declaration,

Partnership - Copy of Partnership Deed, Apart from Copy of MOA, AOA &

Board Resolution)

Two passport size photographsBusiness Loan Documents for Sole Proprietorship / Partnership Firm

Proof of Identity (Copy of Sales Tax / VAT /Service Tax / Excise RegistrationReceipt OR Registration under Shops and Establishment Act OR PAN ID / IT

Return of the Concern OR Water / Electricity / Municipal Tax Bill in the

Name of the Concern OR MAPIN Card in the Name of the Concern)

Proof of Individual Identity (Copy of Passport/Voter's Identity Card/PhotoPAN Card/Driving License/MAPIN Card)


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Proof of Residence Address (Copy of Passport/Voter's Identity Card/DrivingLicense/Ration Card/Life Insurance Policy/Electricity Bill/Telephone Bill)

PAN Number/Form 60 of the Concern Financial Documents (Copy of P & L Account and Balance Sheet for last two

years, audited by a CA and Copies of IT returns for the last two years) Bank Statements for last 6 month Partnership Deed (Required only in case of Partnership Firm) Proof of Place of Busine Two passport size photographs

Business Loan Documents for Private Limited Company

Proof of Identity (Copy of Sales Tax / VAT /Service Tax / Excise RegistrationOR Registration under Shops and Establishment Act OR PAN ID / IT Return

of the Concern OR Water / Electricity / Municipal Tax Bill in the Name of

the Concern OR MAPIN Card in the Name of the Concern)

Memorandum and Articles of Association (Copy of Certificate ofIncorporation)

Board Resolution (Copy of Annual Return establishing the shareholdingpattern)

Proof of Individual Identity for the authorized signatories and 2 directors,including the managing director (Copy of Passport/Voter's IdentityCard/Photo PAN Card/Driving License/MAPIN Card)

List of Directors Copy of Form 32 filed with ROC PAN Card / Form 60 of the Concern Financial Documents (Copy of P & L and Balance Sheet for last two years,

audited by a CA, and Copies of IT returns for the last two years)

Bank Statements for last 6 months Proof of Place of Business Two passport size photographs


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Eligibility for a Business Loan

Minimum age: 21 years Maximum age: 65 years Minimum income (annual): Rs. 200,000 Minimum loan amount : Rs. 25,000 Maximum loan amount : Rs. 2,00,00,000 Minimum loan tenure : 1 year Maximum loan tenure : 5 years


42/65

Life Insurance Plan

Dialabank.com helps you find the most suitable Life Insurance Plan


requirements and your profile and help you find the most suitable Life Insurance

Plan

Benefit Comparison: We help you understand the details of the benefits offered

by each Life Insurance product and help you find the right product.


Life Insurance players in the market and make the right choice.


Use our services to find the right Life Insurance Plan at no extra cost.

Unbiased and Transparent Search: Our objective is to simplify your search for the

right Life Insurance Plan and we provide information in an unbiased and

transparent manner.

Life Insurance Basics

Life Insurance is a contract between the policy owner and the insurer, where the

insurer agrees to pay a designated beneficiary a sum of money upon theoccurrence of the insured individual's or individuals' death or other event, such as

terminal illness or critical illness. In return, the policy owner agrees to pay a

stipulated amount (at regular intervals or in lump sums). There may be designs in

some countries where bills and death expenses plus catering for after funeral

expenses should be included in Policy Premium.


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The value for the policyholder is derived, not from an actual claim event, rather it

is the value derived from the 'peace of mind' experienced by the policyholder,

due to the negating of adverse financial consequences caused by the death of the

Life Assured.

Parties To Life Insurance Contract

The parties to a life insurance policy are the following parties, the insured, the

beneficiary, the owner and the insurer.

The Insured is the person on whom the life insurance is based. Their life is the

one that is insured. If they die, or if anything happens to the person that is

covered by the insurance then the policy pays out.

The beneficiary is the person, or persons, who are paid the money if the event

happens. They are the people who will suffer otherwise if the person dies and the

monetary compensation is designed to protect them.

The owner of the life insurance policy is the person who pays the premiums and is

responsible for keeping up payment of the policies. Usually this person is the

insured, as they want to take care of the family for which they are the bread

winner.

Life Insurance Premium and Bonus

Premium is the name given to this consideration that the policy holder has to

pay in order to Secure the benefits offered by the insurance contract .it can be

looked upon as a price of insurance policy , where ,In a contract of insurance ,

the insurer promises to pay to the policy holder a specified sum of money ,in

the event of specified happening.

Bonus usually refers to a non-guaranteed benefit added to life insurance policies.

A company will usually have a lot of discretion over the level of bonuses it

allocates to contracts. Once allocated, bonuses may or may not be reversed by

the insurer in case the contract is terminated early. When a traditional life

insurance product mentions with profit policy or participating policy, it simply

means the policy and thereby the policyholder is eligible to receive a bonus. A

bonus is declared out of the surpluses determined after actuarial valuation of the

assets and liabilities of the life insurance company. In other words, surpluses

(bonus) reflect the profitability of the life insurance company.


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Principles of Life Insurance

Consideration: The insureds consideration is the first payment of premium and

then after that the continuing payment of premium. The insurers consideration is

the offer to pay out the sum insured if the life insured was to die during the policy

period.

Consensus of agreement: The parties basically must be in agreement about what

they are contracting for at the time the agreement comes into force.Insurable interest: The life insurance proposer, the person taking the policy out,

must have an insurable interest in the Life Insured.

Capacity to contract: Both parties must be able to contract. Minors under the age

of 18 years are restricted by the Family law Reform Act 1969. Minors under the

age of 18 can enter into a contract but subject to certain restrictions the contract

cannot be enforced against them. That is why most insurers will not issue a policy

to someone under the age of 18.

Offer and acceptance: One party makes an offer and the other party accepts

that offer without qualification. If the acceptance is qualified it simply becomes an

alternative offer.


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Car Loan

Dialabank.com helps you find the most suitable offer for Car Loan


requirements and your profile and help you find the most suitable Car Loan offer.

Rate Comparison: We help you understand the details of all costs involved intaking a Car Loan and help you find the Cheapest Offer.


Car Loan players in the market and make the right choice.


Use our services to find the right Car Loan deal at no extra cost.

Unbiased and Transparent Search: Our objective is to simplify your Car Loan

search and we provide information in an unbiased and transparent manner.

Features of Car Loans

In case of a new car, loan amount is up to 90% of cost of the car. In case of used car, loan amount is up to 80% of the car. The maximum loan amount is up to 3 times the annual salary (for salaried

professionals) or 6 times the annual income (for self employed professionals).

The finance period is usually between 1 to 5 years. Interest is calculated on the basis of compound interest. Equated Monthly Installment (EMI) is worked out for repayment. Early settlement of the pending amount is available.

Documents Required For Car Loans


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While availing for instant Car loans some significant documents are required.

Some of them are mentioned as under:

Identity Proofs in the form of PAN Card, Driving License, Passport or Voters ID

Monthly income evidence in the form of salary receipt for salaried persons andlast three years of IT income for businessmen

Proof of Address in the form of Electricity Bill, Ration Card, Life Insurance Policy,etc.

Bank Passbook transactions of the last 6 months Previous 3 year IT Returns for self employed 2 Passport size photographs

Eligibility Criteria for Car Loans

Minimum Age of Applicant While Applying For Loan: 21 years Maximum Age of Applicant at Loan Maturity: 58 years Minimum Employment: 1 year in current employment and minimum 2

years of employment in general

Minimum Annual Income: Rs 100,000 (net) Telephone: Must at Residence

Vision

Vision brings together a diverse group of professionals ranging from specialists in

investment, pensions, taxation and property to a qualified actuary. It is this blend

of skills and insight that allows us to approach financial planning and wealth

management in a manner unique to the Northern Ireland market.

Mission

To function as an active forum to aid, advise and assist insurers inmaintaining high standards of conduct and service to policyholders.

Interact with the Government and other bodies on policy matters. Actively participate in spreading insurance awareness in India. Take steps to develop education and research in insurance.


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SWOT ANALYSIS OF LEAP FINANCIAL SERVICES

STRENGTHS

Right products, quality and reliability. Superior product performance vs competitors. Better product life and durability. Some staff have experience of end-user sector. Have customer lists. Direct delivery capability. Product innovations ongoing. Can serve from existing sites. Management is committed and confident.

WEAKNESSES

Customer lists not tested. Some gaps in range for certain sectors. No direct marketing experience. We cannot supply end-users abroad. Need more sales people. Don't have a detailed plan yet. Delivery-staff need training. Customer service staff need training. Processes and systems, etc


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OPPORTUNITIES

Could develop new products. Local competitors have poor products. Profit margins will be good. End-users respond to new ideas. Could extend to overseas. New specialist applications. Can surprise competitors. Could seek better supplier deals.

THREATS

Environmental effects would favour larger competitors. Existing core business distribution risk. Market demand very seasonal. Retention of key staff critical. Could distract from core business. Possible negative publicity. Vulnerable to reactive attack by major competitors.


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OBJECT OF LEAP FINANCIAL SERVICES

To reduce your income taxes To give you better accessibility over your money To lower your financial costs To provide total needs based and value based insurance protection To lower your financial risk To give you a better understanding of how your money is working for you To provide organization of your financial documents and plans To provide a verifiable financial process


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INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who share a

common financial goal. This pool of money is invested in accordance with a stated

objective. The joint ownership of the fund is thus Mutual, i.e. the fund belongs

to all investors. The money thus collected is then invested in capital market

instruments such as shares, debentures and other securities. The income earnedthrough these investments and the capital appreciations realized are shared by its

unit holders in proportion the number of units owned by them. Thus a Mutual

Fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed basket of securities

at a relatively low cost. A Mutual Fund is an investment tool that allows small

investors access to a well-diversified portfolio of equities, bonds and other

securities. Each shareholder participates in the gain or loss of the fund. Units are

issued and can be redeemed as needed. The funds Net Asset value (NAV) is

determined each day.

Investments in securities are spread across a wide cross-section of industries and

sectors and thus the risk is reduced. Diversification reduces the risk because all

stocks may not move in the same direction in the same proportion at the same

time. Mutual fund issues units to the investors in accordance with quantum of

money invested by them. Investors of mutual funds are known as unit holders.


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MUTUAL FUND OPERATION FLOW

INVESTORS

PASSED BACK TO POOL THEIR MONEY WITH

RETURNS FUND MANAGERS

GENERATES INVEST IN SECURITIES


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When an investor subscribes for the units of a mutual fund, he becomes part

owner of the assets of the fund in the same proportion as his contribution

amount put up with the corpus (the total amount of the fund). Mutual Fund

investor is also known as a mutual fund shareholder or a unit holder. Any change

in the value of the investments made into capital market instruments (such as

shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme.

NAV is defined as the market value of the Mutual Fund scheme's assets net of its

liabilities. NAV of a scheme is calculated by dividing the market value of scheme's

assets by the total number of units issued to the investors.

ADVANTAGES OF MUTUAL FUND

The advantages of mutual funds are given below

Portfolio DiversificationMutual funds invest in a number of companies. This diversification reduces the

risk because it happens very rarely that all the stocks decline at the same time

and in the same proportion. So this is the main advantage of mutual funds

Professional ManagementMutual funds provide the services of experienced and skilled professionals,

assisted by investment research team that analysis the performance and

prospects of companies and select the suitable investments to achieve the

objectives of the scheme.


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Low CostsMutual funds are a relatively less expensive way to invest as compare to directly

investing in a capital markets because of less amount of brokerage and other fees.

LiquidityThis is the main advantage of mutual fund, that is whenever an investor

needs money he can easily get redemption, which is not possible in most of

other options of investment. In open-ended schemes of mutual fund, the

investor gets the money back at net asset value and on the other hand in

close-ended schemes the units can be sold in a stock exchange at a

prevailing market price

TransparencyIn mutual fund, investors get full information of the value of their investment, the

proportion of money invested in each class of assets and the fund managers

investment strategy.

FlexibilityFlexibility is also the main advantage of mutual fund. Through this investors

can systematically invest or withdraw funds according to their needs and

convenience like regular investment plans, regular withdrawal plans,

dividend reinvestment plans etc.


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Convenient AdministrationInvesting in a mutual fund reduces paperwork and helps investors to avoid many

problems like bad deliveries, delayed payments and follow up with brokers and

companies. Mutual funds save time and make investing easy.

AffordabilityInvestors individually may lack sufficient funds to invest in high-grade stocks. A

mutual fund because of its large corpus allows even a small investor to take the

benefit of its investment strategy.

Well Regulated

All mutual funds are registered with SEBI and they function with in the provisions

of strict regulations designed to protect the interest of investors. The operations

of mutual funds are regularly monitored by SEBI.

DISADVANTAGE OF MUTUAL FUND

Mutual funds have their following drawbacks

No GuaranteesNo investment is risk free. If the entire stock market declines in value, the

value of mutual fund shares will go down as well, no matter how balanced the

portfolio. Investors encounter fewer risks when they invest in mutual funds than

when they buy and sell stocks on their own. However, anyone who invests

through mutual fund runs the risk of losing the money.


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Fees and CommissionsAll funds charge administrative fees to cover their day to day expenses. Some

funds also charge sales commissions or loads to compensate brokers, financial

consultants, or financial planners. Even if you dont use a broker or other financial

advisor, you will pay a sales commission if you buy shares in a Load Fund.

TaxesDuring a typical year, most actively managed mutual funds sell anywhere

from 20 to 70 percent of the securities in their portfolios. If your fund

makes a profit on its sales, you will pay taxes on the income you receive,

even you reinvest the money you made Management Risk.

When you invest in mutual fund, you depend on fund manager to make the right

decisions regarding the funds portfolio. If the manager does not perform as well

as you had hoped, you might not make as much money on your investment as

you expected. Of course, if you invest in index funds, you forego management risk

because these funds do not employ managers.


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HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the Government of India and Reserve Bank. Though

the growth was slow, but it accelerated from the year 1987 when non-UTI players

entered the Industry. In the past decade, Indian mutual fund industry had seen a

dramatic improvement, both qualities wise as well as quantity wise. Before, the

monopoly of the market had seen an ending phase; the Assets Under

Management (AUM) was Rs67 billion. The private sector entry to the fund family

raised the sum to Rs. 470 billion in March 1993 and till April 2004; it reached the

height if Rs. 1540 billion. The Mutual Fund Industry is obviously growing at a

tremendous space with the mutual fund industry can be broadly put into four

phases according to the development of the sector. Each phase is briefly

described as under.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the

Reserve Bank of India and functioned under the Regulatory and administrative

control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and

the Industrial Development Bank of India (IDBI) took over the regulatory and

administrative control in Scheme 1964. At the end of 1988 UTI had Rs.6,700crores

of assets under management.


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Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public

sector banks and Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund

established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab

National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of

India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual

fund in June 1989 while GIC had set up its mutual fund in December 1990.At the

end of 1993, the mutual fund industry had assets under management of

Rs.47,004crores.

Third Phase

1993-2003 (Entry of Private Sector Funds)

1993 was the year in which the first Mutual Fund Regulations came into being,

under which all mutual funds, except UTI were to be registered and governed.

The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first

private sector mutual fund registered in July 1993.The 1993 SEBI (Mutual Fund)

Regulations were substituted by a more comprehensive and revised Mutual Fund

Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)

Regulations 1996. As at the end of January 2003, there were 33 mutual fun

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