Birla Sun Life insurance

A

Project report

On

“Performance evaluation of Birla Sun Life Insurance products in comparison with Life Insurance Corporation (LIC)”

C.T INSTITUTE OF MANAGEMENT AND I.T

{Affiliated to Punjab Technical University, Jalandhar}

In Partial fulfillment of requirement of degree of

MBA (2008-2010)

SUBMITTED TO: SUBMITTED BY:

Mr. HARISH MEHTA RAHUL ARORA

(Project’s Guide) MBA-3RD SEM.

Roll no. 81407317128

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GUIDE’S CERTIFICATE

This is to certify that the project entitled “”Performance evaluation of Birla Sun Life

Insurance products in comparison with Life Insurance Corporation (LIC)

is being submitted in partial fulfillment of the requirement for the award of master’s

degree of business administration of Punjab technical university. It is a confined research

work carried out by RAHUL ARORA under my supervision. Any part of research work

has not been submitted for any other degree. The assistance and help received during the

execution of the project has been fully acknowledged.

MR. HARISH MEHTA

CTIMIT, JALANDHAR

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ACKNOWLEDGEMENT

I take this opportunity to express my acknowledgement and deep sense of gratitude

for rendering valuable assistance and guidance to me by following personality for

successful completion of my project.

I am highly obliged to my project guide Prof. Harish Mehta for his personal

encouragement, prompt assistance and help provided to me in completion of my

project. He has helped me a lot by giving suggestions and guidance whenever needed.

His contribution has been extremely useful and is greatly appreciated. I honor his

knowledge and competence in the field of management.

RAHUL ARORA

81407317128

MBA-3RD SEM

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PREFACE

To achieve partial and concrete results, it is necessary that theoretical knowledge

must be supplemented with practical environment.

Keeping this view in mind, I have

completed my research work regarding “Performance evaluation of Birla Sun Life

Insurance products in comparison with Life Insurance Corporation (LIC)” By

doing this research work I have learnt a lot of things which would be really helpful

for me in future. This experience in decision making and practical application of

knowledge has contributed greatly to my growth.

RAHUL ARORA

4

DECLARATION

I hereby declare that the survey entitled, “Performance evaluation of Birla Sun Life

Insurance products in comparison with Life Insurance Corporation (LIC), that no

part of research work has been submitted for any other degree. I also undertake that work

is purely academic and no part has been copied or taken from any where. The motive

behind the research project was “Performance evaluation of Birla Sun Life Insurance

products in comparison with Life Insurance Corporation (LIC)

RAHUL ARORA

81407317128

MBA – 3rd SEM.

5

INDEX

Serial No. Particulars Page No.

1 Introduction to Insurance 8

2. Company profile 15

3. Major competitor LIC 24

4. Various life insurance plans of BSLI 25

5. Various plans of LIC 27

6. Major plans of BSLI 30

7. Major plans of LIC 37

8. Objectives 45

9. Research Methodology 46

10. Data Analysis 49

11. Findings 60

12. Suggestions 62

13. Limitations 64

14. Conclusion 66

15. Bibliography 68

16. Annexure 70

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INSURANCE

The meaning of insurance: Insurance is a policy from a large financial institution that offers a person, company, or other entity reimbursement or financial protection against possible future losses or damages.

A simple example will make the meaning of insurance easy to understand. A biker is always subjected to the risk of head injury. But it is not certain that the accident causing him the head injury would definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts as insurance by protecting him/her from any possible danger. The price paid was the possible inconvenience or act of wearing the helmet; this i.e. equivalent to the insurance premiums paid.

Major types of insurances are as mentioned below:

Life insurance: Descendant’s family receives financial benefits. Life insurances also offer paid proceeds to the beneficiary.

Automobile insurance: Usually automobile insurances cover damages and legal financial expenditures of the automobile driver.

Health insurance: Health insurance covers the expenditures associated to treatment and medical expenditures.

Credit insurance: Borrowers often fail to repay debts, loans and mortgages due to certain unavoidable circumstances, credit insurances can be of great help during such crisis.

Property insurance: Property protection insurance provides protection from risks associated to theft, fire, floods etc.

Life insurance

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence 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 called a premium at regular intervals or in lump sums.

How life insurance works

There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy

(policyholder), although the owner and the insured are often the same person. For example, if Mr. Rajan

buys a policy on his own life, he is both the owner and the insured. But if Mrs. Anita, his wife, buys a

policy on Rajan’s life, she is the owner and he is the insured. The owner of the policy is called the

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grantee (he or she will be the person who will pay for the policy). Another important person involved is

the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the

death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may

change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable

beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of

cash value.

The policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk

assumed. Special provisions apply, including a suicide clause wherein the policy becomes null if the

insured commits suicide within a specified time for the policy date (usually two years). Any

misrepresentation by the owner or insured on the application is also grounds for nullification. Most

contracts have a contestability period, also usually a two-year period; if the insured dies within this

period, the insurer has a legal right to contest the claim and request additional information before

deciding to pay or deny the claim.

The face amount of the policy is normally the amount paid when the policy matures, although policies

can provide for greater or lesser amounts. The policy matures when the insured dies or reaches a

specified age. The most common reason to buy a life insurance policy is to protect the financial interests

of the owner of the policy in the event of the insured's demise. The insurance proceeds would pay for

funeral and other death costs or be invested to provide income replacing the deceased's wages. Other

reasons include estate planning and retirement. The owner (if not the insured) must have an insurable

interest in the insured, i.e. a legitimate reason for insuring another person’s life. The insurer (the life

insurance company) calculates the policy prices with an intent to recover claims to be paid and

administrative costs, and to make a profit.

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http://en.wikipedia.org/wiki/Beneficiary

MAJOR PLAYERS OF INDIA IN INSURANCE

Reliance Life Insurance is a part of the Reliance group. It is one of the partners of Reliance Capital Ltd

which is a Anil Dhirubhai Ambani Group. Reliance Capital is one India's most dominant private sector

financial services companies. They offer insurance products which help you with savings as well as give

you protection.

Canara HSBC Life is a joint venture of Canara Bank, HSBC Insurance (Asia pacific) & Oriental bank

of Commerce. The Company got its approval from IRDA in June 2008 and from that commencing its

business. They have more than 4100 branches all over India.

DLF pramerica Life Insurance Company Ltd. is a joint venture between DLF Limited & Prudential

International Insurance Holdings Limited. DLF Pramerica believes in delivering a secure & enrich life to

there customers.

MetLife One of the fastest growing insurance company in India is MetLife. The company started its

operations in between 2000-2001. They have a range of various products to offer.

ICICI Prudential ICICI Bank with Prudential plc, both well known & strong financial institutions came

together in December 2000 to form an insurance company - ICICI Prudential Life Insurance.

Max New York Life Max India’s leading multi business corporation & New York Life joined there

hands in 2000.The company started there operations in 2001. The company is involved in Life & health

products.

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Bajaj Allianz Bajaj who are into iron & steel, finance, insurance & etc and Allianz who provides

financial services when came together they formed Bajaj Allianz Life Insurance Company.

Bharti AXA Bharti AXA Life Insurance is a joint venture between Bharti & AXA. The company started

its functionality in December 2006 and they always believe to be a strong financial institute.

HDFC Standard Life HDFC Standard Life Insurance is a joint venture between Housing Development

Finance Corporation Limited & a Group of Standard Life Plc.The Company started commencing its

business in December 2000.

AEGON Religare AEGON Religare Life Insurance Company Ltd is a joint venture with AEGON,

Religare and Bennett, Coleman & Company a part of Times Group. AEGON Religare Life Insurance

company was launched in July 2008.

Kotak Mahindra A joint venture of Kotak Mahindra group & Old Mutual plc is known as Kotak

Mahindra Old Mutual Funds. The Company started commencing its business in 2001. The company aim

is to help customers in making there financial decisions.

Future Generali Life Future Generali is a joint venture between Future Group of India & Italy based

Generali Group.Future Generali in India is into both Life & Non Life businesses in India. The company

wants to provide a financial security to all.

SBI Life SBI Life Insurance Company Limited is a joint venture between State Bank of India and BNP

Paribas Assurance. It is present in more than 41 countries across the world. SBI Life offers a variety of

plans in life insurance and pension.

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Shriram Life Shriram Life Insurance Company is a joint venture between Shriram Group and Sanlam

Group.Shriram Group is one of India’s most esteemed financial services & Sanlam Group is one of the

largest life insurance providers of South Africa.

TATA AIG The TATA Group and American International Group Inc together formed Tata AIG Life

Insurance Co. Ltd.Tata Group holds 74% stake in the insurance venture with AIG holding the balance

26%. They started their operations in April 2001

Aviva Aviva, one of UK's largest insurance company and world's 5th largest insurance group. It was one

of the first international insurance company to set up its office in India in the year 1995. They introduced

the concept of banc assurance in India.

IDBI Fortis IDBI Fortis Life Insurance Co. Ltd is a joint venture between three financial institutes; they

are IDBI Bank, Federal Bank and Fortis. They introduced there plans in March 2008. IDBI owns 48%

equity while Federal Bank and Fortis own 26% equity each.

Sahara The Sahara Pariwar stepped into the insurance business by launching Sahara India Life Insurance

Co. Ltd. They received the IRDA license in February 2004 and started their operations in October 2004.

They are the first solely owned private sector insurance company in India.

ING VYSYA ING Life was established in 2001 as a joint venture between ING Insurance International

B.V. (INGI), ING Vysya Bank Limited and GMR Industries Limited. At present, INGI, Exide Industries

Limited, Ambuja Cement Ltd, Enam Group are the joint venture partners.

Star Union Star Union Dai-ichi Life Insurance Co.Ltd. is formed by three various financial institutions.

Bank of India, Union Bank of India and Dai-ichi Mutual Life Insurance Company This firm was

incorporated in the year 2007 and got their IRDA license on the 26th Dec 2008.

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Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

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Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla Group, one of the largest business houses in India and Sun Life Financial Inc., a leading international financial services organisation. The local knowledge of the Aditya Birla Group combined with the expertise of Sun Life Financial Inc., offers a formidable protection for your future.

The Aditya Birla Group has a turnover of close to Rs. 119000 crores, with a market capitalisation of Rs. 133875 crores (as on 31st March 2008). It has over 100,000 employees across all its units worldwide. It is led by its Chairman - Mr. Kumar Mangalam Birla. Some of its key companies are Hindalco, Grasim and Aditya Birla Nuvo.

Sun Life Financial

Sun life financial –based in Canada-started in 1865.

It operates in all the important markets of the world like Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.

Sun Life Financial Inc. has assets under management of over US$404.7 billion (as on 31st March, 2008). It is a leading performer in the life insurance market in Canada.

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Brands Of Aditya Birla Group

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Birla Sun Life Insurance (BSLI) has been operating for 9 years. It has contributed significantly to the growth and development of the life insurance industry in India. It pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. It was the first player in the industry to sell its policies through the Bancassurance route and through the Internet. It was the first private sector player to introduce a Pure Term plan in the Indian market. BSLI has covered more than 2 million lives since it commenced operations. And its customer base is is spread across more than 1500 towns and cities in India. The company has a capital base of Rs. 1274.5 crores as on 31st March 2008.

With an experience of over 9 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top 5 private life insurance companies in the country.

Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit. It was the first Indian Insurance Company to introduce “Free Look Period” and the same was made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on monthly basis. These category development initiatives have helped BSLI be closer to its policy holders’ expectations, which gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products, health plan and retirement plan) that the company offers.

Add to this, the extensive reach through its network of 600 branches and 1,75, 000 empanelled advisors. This impressive combination of domain expertise, product range, reach and ears on ground, helped BSLI cover more than 2 million lives since it commenced operations and establish a customer base spread across more than 1500 towns and cities in India. To ensure that our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the best Turn around Time according to LOMA on all claims Parameters. Such services are well supported by sound financials that the Company has. The AUM of BSLI stood at Rs. 8165 crs as on February 28, 2009, while as on March 31, 2009, the company has a robust capital base of Rs. 2000 crs.

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Achievements of BSLI

1st to introduce ULIP fund options.

1st to launch illustrations so that customers understand the products better before they buy.

1st to issue NAVs of funds for better transparency.

1st to disclose portfolio on a monthly basis.

1st to introduce “Free Look Period” and the same was made mandatory by IRDA for all other Life Insurance Companies.

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SWOT ANALYSIS OF BSLI

STRENGTH:

Multi-channel distribution and one of the largest distribution

networks in India.

1 Million Policies sold within 3 and half years.

Training process of the company is very strong.

According to the change in surrounding environment like changes in

customer requirement.

WEAKNESS:

Company does not penetrate on the rural market at a time.

There is no plan for the low income group.

Fees for the advisor is high than the other companies.

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OPPORTUNITY:

Insurance market is very big, where company can expand its business

easily.

It has many ULIP plans so it can grow in near future.

THREATS:

‘OLD HABITS DIE HARD’: Its still difficult task to win the confidence of

public towards private company.

The company is facing major threats from LIC etc. -which is an

government company.

Plans for all income groups are not available which can create adverse effect later on the market share of the company.

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MAJOR COMPETITOR AT A GLANCE LIC (LIFE INSURACE CORPORATION)

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate 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 another 10 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, 100 divisional offices, 7 zonal

offices and the Corporate office. LIC’s Wide Area Network covers 100 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. LIC’s 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 has crossed 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.

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

various aspects of life insurance business.

Birla Sun Life Insurance Co. Ltd

Following are the Life Insurance plans that Birla Sun life Insurance Company Ltd.

1.)Birla Sun Life Insurance Term Plan - This plan can take care of your financial commitments of yours towards your family by providing large cover at low cost. Minimum age of entry for this plan is 18-55 and maximum maturity age is 70 years.

2. Birla Sun Life Insurance Premium Back Term Plan - This is a low cost life cover promises you to refund the entire premium on maturity or death. Two options are also there to choose 100% premium back or 125% premium back. Maximum term period for this plan is 20 years.

3. Birla Sun Life Insurance Guaranteed Bachat Plan - It’s an non participating endowment plan offers you guaranteed returns and chance to earn survival benefit from the 3rd year onwards. You can withdraw this benefit each tear or can use it as to pay the premium dues.

4. Birla Sun Life Insurance Money Back Plus Plan - This is also a non-participating endowment plan, which gives you maturity and survival both benefits. One remarkable point is that on every policy anniversary it increases your cover by an equal amount of your base premium.

5. Birla Sun Life Insurance Gold-Plus II - It’s an investment plan offering nine-funding option to choose and 100% equity fund option also. Free unlimited switches are given to you to manage your investments. This plan offers good liquidity to you.

6. Birla Sun life insurance Platinum Plus - It is a unit linked, non participating insurance plan. In this plan, the investment risk is borne by the policyholder but not if this policy is detained till maturity.

7. Birla Sun Life Insurance Saral Jeevan Plan - In today’s fast life it’s really easy to buy an insurance plan, which you immediately can purchase just by providing three health statements to the company. Bsli Saral Jeevan is the best option to go for.

8. Birla Sun Life Insurance Supreme-Life - It’s a unit linked non-participating plan providing 8-fund options to choose. It gives a choice of two death benefits.

9. Birla Sun Life Insurance Dream Plan - It’s a unit-linked policy, which provides you guaranteed returns, 0% allocation charges, and option to double or triple the guaranteed maturity.

10. Birla Sun Life Insurance ClassicLife Premier - It will give you guaranteed additions in the form of guaranteed units and a good choice of 8 investment funds are also there. You are free to choose the term period of 10,20,30 or whole life.

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11. Birla Sun Life Insurance SimplyLife - It ensures a lifetime of tax-free investments to fulfill the needs of your dear ones. It’s a market related plan provides you a good death benefit amount.

12. Birla Sun Life Insurance PrimeLife Premier - It’s a single time investment with top up options. It keeps you hassle free and provides you guaranteed returns at regular intervals.

13. Birla Sun Life Insurance PrimeLife - It is a single premium policy gives you the benefit of life insurance and investments as well. It’s a non-participating ULIP policy. 14. Birla Sun Life Insurance Flexi Cash Flow - For this policy you can pay lump sum premium payment at regular intervals. It will give you 3% guaranteed returns on net policy charges.

15. Birla Sun Life Insurance Flexi Save Plus - This plan will give you the choices of 3 fund options, maturity ages & guaranteed returns of 3%.

16. Birla Sun Life Insurance Flexi Life Line - This would provide you a life long cover till 100 years of age and will give you the option of tax-free partial withdrawals.

17. Birla Sun Life Insurance Single Premium Bond - This plan gives you the opportunity to make one time investment with no medical tests and will also gives you the facility of high entry age. It’s a short term investment plan provides you the option of 5 years or 10 years term period.

18. Birla Sun Life Insurance Freedom 58 - It’s a non- participating ulip plan. It helps you accumulate your premiums and the investment return there of into a corpus of your retirement.

19. Birla Sun Life Insurance Flexi Secure Life Retirement Plan II - This will provide you the option to take a life cover or not. You can choose your retirement age yourself whether you want to prepone/postpone it.

20. Birla Sun Life Insurance Children's Dream Plan - It’s a unit-linked policy, which provides you guaranteed returns, 0% allocation charges, and option to double or triple the guaranteed maturity.

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Various Plans offered by LIC are as follows :

Endowment Assurance Plans

1. Jeevan Amrit : This plan is designed for a higher cover at a lower cost. In this plan premium payment is limited to 3 or 4 or 5 years and the premium payable during the first year is higher than the premiums payable in subsequent years.

2. New Janaraksha Plan : Is an Endowment Assurance plan that provides financial protection against death throughout the term of plan. It pays the maturity amount on survival to the end of the term.

3. Jeevan Mitra(Double Cover Endowment Plan) : Is an endowment plan which takes care of the financial needs even if death of the policyholder for the whole term of the plan.

4. Jeevan Mitra (Triple Cover Endowment Plan) : Is an endowment plan where thrice the Sum Assured plus all bonuses on the basic sum assured to date is payable in a lump sum upon the death of the life assured.

5. The Endowment Assurance Policy : This policy has a provisions for the family of the Life Assured in event of his early death and also assures a lump sum at a desired age.

6. The Endowment Assurance Policy-Limited Payment : In this policy the payment of premium can be limited either to a single payment or to a term shorter than the policy.

Children Plans

1. Jeevan Anurag : Is plan designed for the children educational requirements . This plan can be taken on the parent’s life. The basic sum assured is given immediately on the death of the life assured during the term of the policy.

2. Jeevan Kishore : Is a plan which can be availed by the parent or grand parents of the children. It is an endowment assurance plan for children of less than 12 years of age.

3. Jeevan Chhaya : It is a plan where financial protection is given against death during the term of the plan. It is an Endowment Assurance plan. Besides this benefit one-fourth of Sum Assured is payable at

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the end of each of last four years of policy term irrespective if the life assured dies or survives the duration of the policy.

4. Komal Jeevan : Is a Money Back Plan which can be bought by the parent or grand parent for their child from the age of 0-10years. This plan gives financial protection against death during the duration of the plan with periodic payments on survival at specified durations.

5. Child Future Plan : A policy where the future needs like education, marriage and other requirements are taken care of. This plan provides a benefit which not only takes care of the risk cover of the child during the policy but also after 7 years of the policy being expired.

6. Child Career Plan : A plan to meet the educational and other needs of the child. It provides the risk cover on the life of child during the policy term as well as 7 years after the policy has expired. There are also Survival benefits given to the life assured at the end of a specific duration.

7. Child Fortune Plan : Is a unit linked plan which offers long term capital appreciation.

8. Marriage Endowment Or Educational Annuity Plan : This is an Endowment Assurance plan that provides for benefits on or from the selected maturity date to meet the Marriage/Educational expenses of the named child.

Money Back Plan

1. Bima Bachat : Is a money-back policy which offers financial security and assurance to the policy holder and his family. The policy holder has to pay only one premium.

2. Money Back-20 years : Is an endowment plan where periodic payments of partial survival benefits are paid during the term of the policy till the policy holder is alive.As the policy name goes this plan 20% of the sum assured is payable after 5,10,15 years and the balance 40% accrued bonus is payable at the 20th year.

3. Money Back 25 years : Is the same as the above plan only in this plan the 40% accrued bonus is payable at the 25th year.

Pension plans

1. New Jeevan Dhara - I : is a Deferred Annuity plans that allows the policyholder to make provision for regular income after the selected term.

2. New Jeevan Suraksha - I : Is a deferred annuity plan.

3. Jeevan Nidhi : Is a deferred annuity plan with profits.

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4. Jeevan Akshay - VI : By paying a lump sum amount this immediate annuity plan can be bought.

Unit Plans

1. Child Fortune Plus : Is a plan for children and to meet their educational needs. Its a unit linked plan with long term capital appreciation.

2. Fortune Plus : It is a unit linked assurance plan where premium payment term (PPT) is 5 years and the premium payable in the first year will be 50% of total premium payable under the policy.

3. Market Plus : Is a unit linked pension plan where after a specific period the pension is paid.

4. Money Plus - I : Is a unit linked Endowment plan which has investment plus insurance during the term and you can pay regular premiums.

5. Profit Plus : It is a unit linked Endowment plan where the premium payment term (PPT) is limited to single lump sum, or uniformly over 3, 4 or 5 years.

Whole Life Plans

1. Jeevan Anand : Is a combination of two plans- Endowment Assurance and Whole Life plan.

2. Jeevan Tarang : This is a with-profits whole of life plan which provides for annual survival benefit at a rate of 5½ % of the Sum Assured after the chosen Accumulation Period.

3. The Whole Life Policy : Is a plan mainly to provide for payment of sum assured plus bonuses on the death of the policyholder.

Golden Jubliee Plan

New Bima Gold : Where the premiums are paid back during the policy term in installments , besides that life insurance cover is given during the also at the extended term of the plan.

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Some main Plans of BSLI:

(1) Birla Sun life insurance Platinum Plus - It is a unit linked, non participating insurance plan. In this plan, the investment risk is borne by the policyholder but not if this policy is detained till maturity.

Policy parameters

Entry age 18-70

Minimum annual premium Rs. 50000

Minimum sum assured 5*annual premium

Policy term 10 years

Premium paying term 3 years

Premium and sum assured

You can pay your policy premium annually, half-yearly, quarterly or monthly, subject to a minimum installment premium of:

Rs. 50,000 per annum

Rs. 25,000 half-yearly

Rs. 15,000 quarterly; or

Rs. 10,000 per month (3 monthly installments required at issue)

You choose your Sum Assured (minimum 5 x annual premium).

Risk profile

0-40% in money market & cash 0-100% in debt instruments & derivatives 0-100% in equities & equity related securities.

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Maturity BenefitOn maturity, your Fund Value will be paid to you.In addition, we will pay an amount equal to:

the number of units under your policy at that time; times the excess, if any, of the Guaranteed Maturity Unit Price over the then prevailing unit price

Death Benefit

In the unfortunate event of the death of the life insured prior to the maturity date of the policy, we will pay to the nominee the greater of (a) the Fund Value or (b) the Sum Assured reduced for partial withdrawals as follows:

Before the life insured attains the age of 60, the Sum Assured payable on death is reduced by partial withdrawals made in the preceding two years.

Once the life insured attains the age of 60, the Sum Assured payable on death is reduced by all partial withdrawals made from age 58 onwards.

Partial withdraw

Partial withdraw after 3 complete policy years.

Minimum partial withdraw rs.5000

Policy surrender After 3 policy years and you will get 100% fund value at that time.

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(2) Birla Sun Life Insurance children’s Dream Plan –

Policy parameters

Entry AgesLife Insured (parent): 18 years – 60 yearsNominee (child) : 30 days – 13 years

Term 18 years less the age of child at entry

Premium paying frequencyRegular policy premiums can be paid yearly, half-yearly, quarterly or monthly (for ECS only)

Addition of riders Accidental Death & Dismemberment Benefit (ADD)

The annual policy premium is based on:

The guaranteed maturity benefit and option you choose. The enhanced sum assured you desire. The plan term and your gender and age at entry.

Guaranteed Fund Value

Equals all premiums paid, less charges and guaranteed maturity benefit(s), accumulated at 3% per annum

Partial Withdrawals Allowed after 3 complete policy years

Investment Funds Protector, Builder, Enhancer

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AT Death Benefit

The sum assured is paid to the nominee upon the death of the life insured (parent)The new life insured is the child and new owner is appointed as per your wishes.The policy is continued as usual except:•All riders and risk charges will cease•Only the policy administration charge and fund management charge continue, and•BSLI will start paying the Maturity Continuation Benefit on a monthly basis until the policy matures.In case of death of the new life insured (child) prior to the end of the Term, higher of 105% of the Fund Value or the Guaranteed Fund Value will be paid and the policy will be terminated.

Charges of policy

Premium allocation charges

Fund management charges

Mortality charges

Surrender charges etc.

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(3) Birla Sun Life Insurance Saral Jeevan Plan – The saral jeevan plan provides

the dual benefit of protection and investment. So it is the ideal policy if you want to secure your life and build wealth at the same time.

Poicy parameters

Entry age 18-55

Policy term 10, 15, and 20 years

Age at maturity 65 or less

Mode of Premium Payment - Annual, Semi Annual, Quarterly, Monthly.

Maturity Benefit

Maturity benefit will be sum assured plus fund value at the end of maturity time.

Death Benefit – Your nominee will receive both sum assured and fund value in the unfortunate event of death.

Investment Funds

Protector Builder Enhancer

Charges of Policy

Premium Allocation Charge- Nil (This means all of your policy premium will be invested in the investment funds of your choice).

Fund Management Charge Mortality charges Surrender charges etc.

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(4) Birla Sun Life Universal Health Plan-

The universal health plan is in addition to the benefit amount payable under each health benefit. This unique benefit helps you and your family with out of pocket health related expenses.

Policy parameters

Entry Ages 18 years – 65 years

Term 3 years

Premium paying frequency policy premiums can be paid yearly, half-yearly, quarterly or monthly

Premium According to age of the insured person. (e.g. for 25 – Rs. 4756 p.a., for 45- Rs. 6725 p.a., for 55- Rs. 9724 p.a.).

Benefits –

1. BSLI pay a fixed benefit amount of Rs. 1000 per day in Hospital plus Rs. 1000 per day in Intensive Care Unit (ICU).

In case of an admission for surgical management :

2. if the surgery is listed in covered surgeries: BSLI pay a fixed benefit amount based on the grade of the covered surgery-Rs. 100000, Rs. 50000, Rs. 25000, Rs. 15000 and Rs. 10000 for grade 1(major) to 5(minor) respectively.

3. if the surgery is not listed in the covered surgeries: BSLI pay a fixed benefit amount of Rs. 2000 per day in hospital plus Rs. 1000 per day in ICU.

Tax benefit

The premium paid by you up to 15000 (Rs.20000 for senior citizens) p.a. to insure yourself and/or your family, is eligible for tax benefit under section 80D of the income Tax Act, 1961, which is subject to amendments from to time.

Death/Maturity benefit

This plan has no death benefit or maturity benefit. Furthermore, this plan provides for no cash surrender value nor any policy loans.

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(5) Birla Sun Life Retirement plan

Policy parameters

Entry Ages18 years – 80 years

Term

Premium paying frequency policy premiums can be paid yearly, half-yearly, quarterly or monthly

Premium Minimum Rs. 9600 p.a.(premium should be multiple of Rs. 1200)

Benefits

In the unfortunate event of death of the policyholder the nominee will receive the higher of:

75% of the base premium and all renewal base premiums paid. OR the surrender value at the time plus all accumulated survival benefits.

Tax benefits

Under section 80CCC and 10(10A)

Partially withdraw

You can do partially withdraw min. Rs.5000

Some main plans of LIC

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(1) Marriage Endowment Or Educational Annuity Plan : This is an Endowment Assurance plan that provides for benefits on or from the selected maturity date to meet the Marriage/Educational expenses of the named child.

Entry age 18 (min.) 60(max)

Sum assured 50000 (min) no limit (max)

Term 5 (min) 25 (max)

Mode of payment monthly, qtly, half yrly, yly,

FEATURES

The Marriage Endowment/ Educational annuity plan provides a sum assured to be kept aside for the expenses of marriage or higher education of the policyholder's children. Premiums payable for selected term or till death of the life Assured. Benefits will be given only after the selected term.

Maturity benefits

Sum Assured + Bonus

Accident:

Accident benefit equivalent to basic sum assured would be available by paying appropriate additional premiums in that behalf. An amount equivalent to Sum Assured become payable immediately.

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(2) Jeevan saral plan of LIC

Plan Details: This plan is appropriate for employees seeking life cover through Salary Savings Schemes.

Eligibility:

Minimum Maximum

Age 12 Yrs (completed) 60 Nearest Birthday

Term 10 35

Age at maturity Maximum 70 years

In case of term rider, minimum and maximum age of entry will be 18 and 50 years respectively. Further minimum sum assured will be Rs.1 lakh.

Premium: Minimum premium: Rs 250 per month for entry age up to 49 years and Rs.400 per month for entry age 50 years and above. The premium shall be in multiple of Rs.50 per month.

Premium Mode:Yearly, Half yearly, Quarterly and Monthly under Salary Saving Scheme.

Survival Benefits:The sum payable at maturity however differs for different entry ages and terms. On Maturity the individual will receive maturity sum assured, plus Loyalty additions, if any.The specimen Maturity Sums Assured (MSAs) per Rs.100/- monthly premium are given below for some of the ages and terms:

Age at Entry

Policy Term

10 yrs 15 yrs 20 yrs 25 yrs

20 11,156 19,628 28,039 36,839

40 10,431 17,839 24,598 30,854

50 8,442 13,444 16,164

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Death Benefits:Under this plan death cover will be same irrespective of age at entry and term. On death the nominee will receive 250 times the monthly premium, plus return of premiums excluding extra/rider premium premium.

(3) New Jeevan Suraksha Plan

This pension plan is a vehicle for planning a life long pension and is also tax deferred. Not only can you plan a pension for life with the help of these annuities but these schemes also help you reduce your tax liability.

POLICY PARAMETERS

Min Max

Entry Age 18 70

vesting age 50 79

deferment period 2 years35 years.

Premium Rs. 250 p.m.

Mode of paymentYearly, half yearly, quarterly, monthly

Features

AMOUNT (Rs) >=1,00,000 < 2,00,000 >=2,00,000 < 5,00,000 >= 5,00,000

Rebates Available for Single Premium

3% 4% 5%

Rebates Available for Annual Premium

6% 7% 8%

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Death Benefits

If death occurs within 10 years - 3% (interest on all premium given)

Between 11 to 20 years 4%

After 20 years 5%

(4) LIC's Market Plus Plan

It is a unit linked deferred pension plan. The policyholder can choose the plan with or without risk cover. He can also choose the level of cover within the limits, which will depend on the mode and amount of premium he/she desires to pay. The allocated premium will be utilized to buy units as per the selected fund type.The Policyholder's Unit Account will be subject to deduction of charges. Units will be allotted and cancelled based on the Net Asset Value (NAV) of the respective fund of the date of allotment / cancellation. There is no Bid-Offer spread (both the Bid price and Offer price of units will be equal to the NAV). The NAV will be declared on a daily basis and will be based on the investment performance, Fund Management Charges (FMC) and whether fund is expanding or contracting under each fund type.

Policy parameters

Entry age 18-70

Premium (Min) Rs. 5,000 p.a. for Regular premium and Rs. 10,000 for Single premium

(Max) No limit

Vesting age 40-75

Sum Assured (min) NIL- (when no life cover is opted) Rs. 25,000 for Single premium, Rs. 50,000 for Regular premium (When life cover is opted)

(Max) Regular Premium - 20 times of the annualized premium.

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Minimum Deferment period 5 years

Investment fund types:

Fund Type

Investment in Govt. / Govt. Guaranteed Securities / Corporate Debt

Short-term investments such as money market instruments(Including Govt. Securities & Corporate Debt)

Investment in Listed Equity Shares

Bond Fund Not less than 80% 100% NIL

Secured Fund Not less than 65% Not more than 85%Not less than 15% and not more than 35%

Balanced Fund Not less than 50% Not more than 70% Not less than 30% and not more than 50%

Growth Fund Not less than 20% Not more than 40%Not less than 60% and not more than 80%

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comparison between some main products of BSLI and LIC

1) Comparison between BSLI’s Children dream plan and LIC’s Marriage Endowment Or Educational Annuity Plan:

In BSLI plan policy term is 18 years less the age of child at entry. But in LIC plan policy term is 5-25 years.

Premium paying frequency is almost same i.e yearly , half yearly, quarterly, monthly.

In case of death benefit: in BSLI plan the sum assured is paid to the nominee upon the death of the life insured (parent). The new life insured is the child and new owner is appointed as per your wishes.

In LIC plan if death occurs due to accident then basic sum assured is payable on death immediately and further premiums are not payable.after expiry of the term again basic sum assured + bonus is payable.

In BSLI fund value is guaranteed.o In LIC plan fund value is not guaranteed.

2) Comparison between BSLI’s Saral jeevan plan and LIC’s Jeevan saral plan

In BSLI plan entry age is 18-55 yearsIn LIC plan entry age is 12-60 years

In BSLI policy term is 10, 15, and 20 years.In LIC policy term is 10-35 years.

In BSLI plan max. Maturity age is 65 yearsIn LIC plan max. Maturity age is 70 years.

In BSLI min. premium is 10000 p.a.In LIC plan min. premium is 5000p.a.

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3) Comparison between BSLI’s Retirement plan and LIC’s New Jeevan Suraksha plan.

In BSLI plan entry age is 18-80 yearsIn LIC plan entry age is 18-70 yrs.

In BSLI plan vesting age is 10-40 yrs from entry age (Max. 90yrs.)In LIC plan vesting age is 50-79 yrs.

In BSLI plan min. premium is 9600 p.a.In LIC plan min. premium is 3000 p.a.

Premium paying frequency is same i.e yearly, half yearly, quarterly, and monthly

Death Benefits:

In BSLI plan the unfortunate event of death of the policyholder the nominee will receive the higher of:

75% of the base premium and all renewal base premiums paid. OR the surrender value at the time plus all accumulated survival benefits.

In LIC plan

If death occurs within 10 years - 3% (interest on all premium given)

Between 11 to 20 years 4%

After 20 years 5%

4) Comparison between BSLI Platinum plus plan and LIC Market plus plan

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Entry age in BSLI and LIC is same i.e. 18-70 years.

In BSLI min. annual premium is 50000p.a.

In LIC plan premium is 10000p.a.

In BSLI plan maturity benefit is guaranteed

In LIC plan maturity benefit is not guaranteed

Objectives of study

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To determine and analyze the Market Potential of the Birla Sun Life Insurance

Company in MOGA City.

To study and determine the competitor (LIC) position in the market.

To analyze market share of Birla Sun Life Insurance products in Moga city.

To analyze the customer satisfaction regarding LIC and BSLI.

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RESEARCH METHODOLOGY -

MEANING OF RESEARCH-

Before understanding Research Methodology, we should understand the meaning

of research. Research in common parlance refers to a search for knowledge. One can also

define Research as a scientific and systematic search for pertinence information on a

specific topic. In fact, research is an art of scientific investigation.

DEFINITION OF RESEARCH-

Research is a systematized effort to gain new knowledge”

Redmann & Mory

MEANING OF RESEARCH METHODOLOGY-

Research Methodology, it is a way to systematically solve the research Problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research.

Data Collection: - The objectives of the project are such that both primary and secondary data is required to achieve them. So both primary and secondary data was used for the project. The mode of collecting primary data is questionnaire mode and sources of secondary data are various magazines, books, newspapers, & websites etc.

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Primary data

The primary data are those data which are collected afresh and for the first time, and thus happen to be original in character.

Secondary data

The secondary data on the other hand, are those which have already been collected by someone else and which have already been passing through the statistical process.

Sample size –

100 people of MOGA City were selected

Research ----- Purposive research

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1) Do you think that investment in Insurance sector is good option?

Particulars No. of respondents

Yes 90

No 10

No. of respondents

yes, 90

no, 10

yes

no

Interpretation : 90 people say that investment in insurance sector is good option and 10 are saying not.

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2) Which company’s policy do you have?


BSLI 40

LIC 60

BSLI

LIC

No. of respondents

40

60

0

10

20

30

40

50

60

Interpretation: 40 people have BSLI policies and 60 have LIC.

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3) Which type of policy you have?

Particulars No. of respondents LIC

No. of respondents BSLI

Whole life plan 20 10

Retirement plan 10 4

Children plan 18 22

Health plan 6 4

Golden jubilee plan 6 0

Total 60 40

20

10

18

6 6

10

4

22

4

00

5

10

15

20

25

No. of respondents LIC


Interpretation: 20 people of LIC and 10 of Birla have whole life plan, 18 people of LIC and 22 of birla have

Children plan.

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4) What percentage of interest you get from it?



Below 5 % 0 0

5-8 % 14 6

8-12 % 42 28

Above12 % 4 6

0 0

14

6

42

28

46

0

5

10

15

20

25

30

35

40

45

Below 5 % 5-8 % 8-12 % Above12 %

No. of respondents LIC


Interpretation: 14 people of LIC and 6 of Birla are getting 5-8% R.O.I., 42 people of LIC and 28 of Birla are getting 8-12% interest.

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5) Why do you invest in this(LIC/BSLI) company?



High interest 8 12

Good image of CO. 12 4

Growth of the CO. 18 12

Annual premium is reasonable 10 4

Maturity benefits 12 8

8

12

18

10

12

12

4

12

4

8

0 5 10 15 20

High interest

Good image of CO.

Growth of the CO.

Annual premium isreasonable

Maturity benefits

Interpretation: 12 people of Birla are investing in this company due to its high interest, 18 people of LIC say that they are investing in LIC due to growth of the co.

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6) Do you think that investment in BSLI is better than LIC ?


Yes 44

No 56

Interpretation: 44 people are saying that investment in BSLI is better than LIC, but 56 are saying no.

(If NO then go to Q.N. 8 otherwise Q.N. 7)

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7) If yes, then why?


Guaranteed F.V. at maturity 10

Growth rate 16

More ULIP plan 8

Risk covered 4

All above 6

No. of respondents

10

16

8

4

6 Guaranteed F.V. atmaturity

Growth rate

More ULIP plan

Risk covered

All above

Interpretation: 16 people are saying that because BSLI gives guaranteed F.V. at maturity time, 8 are saying it has more ULIP plans.

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8) If no, then why?


LIC have govt. stake 24

Brand loyalty of LIC 14

Low A.P. than BSLI 12

High return 6

LIC have govt. stake, 24

Brand loyalty of LIC, 14

Low A.P. than BSLI, 12

High return, 6

LIC have govt. stake

Brand loyalty of LIC

Low A.P. than BSLI

High return

Interpretation: 24 people are saying that investment in LIC is better it has govt. stake, 14 are saying it has brand loyalty.

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9) When company launch new product , then any information is given to you about that product?



Yes 24 16

No 36 24

No.

of

respondents

LIC

No.

of

respondents

BS

LI

Yes

No

36

2424

16

05

10152025303540

Yes

No

Interpretation: 24 people of LIC are saying yes and 36 are saying no, 16 people of BSLI are saying yes and 24 are saying no about providing information.` 67

57

10) In near future, do you think BSLI will have high growth rate?


Agree 20

Neutral 26

Disagree 14

Can’t say 40

2026

14

40

0

5

10

15

20

25

30

35

40

Agree Neutral Disagree Can’t say

No. of respondents

No. of respondents

Interpretation: 20 people are saying that BSLI will grow in future, 26 are saying it will be neutral, 40 can’t say, and 14 are disagree.

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. Findings

90 people saying that investment in insurance sector is good option and 10 are

saying no.

40 people have BSLI policies and 60 have of LIC.

10 people of BSLI have Whole life plan, 4 have retirement plan, 22 have children

plan, 4 have health plan.

56 people are saying that investment in LIC is better than BSLI, 44 are saying

investment in BSLI is better.

Most of the people of both LIC and BSLI are getting rate of interest 8-12%

Most of the people have children plan of BSLI.

Most of the people invest due to high interest of the policy in BSLI

People have more faith in govt. Companies than the private.

14 people invest in LIC due to its brand loyalty.

26 people saying that BSLI growth will be neutral in near future.

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SUGGESTIONS

1) Information regarding new product should be provided to the customers.

2) The company should find out the no. of people who are not having any of the

insurance plans through an intensive market research and motivate them to get insured.

3) At some level Company should provide information to the customers about the

charges of the policy.

4) Company should target each and every class of the society.

5) Charges should be low of the policies.

6) Annual premium should be reasonable.

7) BSLI Company should work in systematic way.

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LIMITATIONS

Some of the respondents were not cooperative.

There are chances of biased information provided by the respondents.

As the sample size is small compared to the total population, therefore

there can’t be full accuracy.

The time was limited.

Area was limited.

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Conclusion

Here in this study we see that people have more policies of LIC in comparison to BSLI. People have more faith in govt. companies than private. So it is necessary for BSLI Co. that it should give more attention to that points or that areas where it lacks for further future growth. Insurance sector is very wide and co. can grow in future.

66

Bibliography

www.birlasunlife.com

www.licindia.com

www.google.com

Newspapers

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ANNEXURE

NOTE: The information that you will provide will be kept confidential and will be used only for

academic Purpose.

Our questionnaire will be to those persons who have plans of BSLI or LIC.

GENERAL

Name __________________________________________________________________

Addres_________________________________________________________________

Gender_________Age ________Contact No. __________________________________

1. Do you think that investment in insurance sector is good option

(a) Yes (b) No

2. Which company’s policy do you have?

(a) Birla Sun Life Insurance (b) LIC

3. Which type of policy you have?

(a)Whole Life Plan (b) Retirement Plan (c) Children Plan (d) Health Plan

(e) Golden jubilee plan (f) any other please specify___________________

4. What percentage of interest you get from it?

(a) Below 5% (b) 5-8% (c) 8-12% (d) Above 12%

5. Why do you invest in this company?

(a) High interest (b) good image (c) Company growth

(d) Annual premium is reasonable (e) due to maturity benefits

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(f) Any other please specify ______________________________

6. Do you think that investment in BSLI is better than LIC?

(a) Yes (b) No

( If your answer is no then jump to question no. 8)

7. if yes then why?

(a) Because BSLI gives guaranteed fund value at maturity time

(b) Growth rate of company is high (c) BSLI has more ULIP plans than LIC

(d) Risk factor is covered properly (e) all above

(f) Any other (please specify)_____________

8. If no then why?

(a) Because LIC is having government stake. (b) Brand loyalty of LIC

(c) It has low premium plans than BSLI (d) Investment return is higher than BSLI

(e) Any other (please specify)__________________________

9. Whenever company launch new product, then any information is given to you about that product?

(a) Yes (b) No

10. In near future BSLI is having high growth rate.

(a) Agree (b) neutral (c) disagree (d) can’t say

Any suggestions __________________________________________________

THANKS

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Birla Sun Life insurance

Documents

Transcript of Birla Sun Life insurance