Children Insurance policy

7/29/2019 Children Insurance policy

1/43

A DISSERTATION

COMPARATIVE STUDY OF ICICI

PRUDENTIAL AND HDFC IN REFERENCE

TO CHILDREN INSURANCE POLICY


2/43

CONTENTS

CHAPTER 1:Introduction of Children Insurance Policy

NEED OF STUDY

OBJECTIVES OF STUDY

RESEARCH METHODOLOGY

CHAPTER 2: REVIEW OF LITERATURE

CHAPTER 3: COMPANY PROFILE OF ICICI PRUDENTIALAND HDFC STANDARD AND ITS SCHEMES

CHAPTER 4: COMPARISON OF SCHEMES ON THEBASIS OF THESE FEATURES :

Min / Max Term child

Min / Max Age of Child

Min / Max Age of Parent

Payment Modes


3/43

Life Assured

Beneficiary

Benefit

Structure On Death of parent.

CHAPTER 5: ANALYSIS AND INTERPRETATION

CHAPTER 6: CONCLUSION

CHAPTER 7: FINDINGS

CHAPTER 8: SUGGESTIONS

REFERENCE


4/43

IntroductionCHILDREN INSURANCE POLICY:

As a loving and caring parent, you have big dreams for yourchild and you want to make those dreams come true. To bringyour dreams to life, you need an investment that is designed to

provide adequate money for key educational milestones inyour child's life, no matter what happens.

A child plan helps you in two ways:

(a) Saving and accumulating amount over many years so that theamount can be used for childs education or marriage

(b) In case of death of insured, there is substantial amount payoutwhich can be used to ensure childs future and it is not affecteddue to financial constraints.


5/43

While buying a child plan, one needs to take care that the returnsare in tandem with the rising costs. Additionally, the risk coverage is

comprehensive. In the same regard, most child plans have inbuiltwaiver of premium feature which ensures that on death of insured,the plan continues and payout is made as prescribed schedule. Forincreasing financial security of child, you can go for riders like

Accidental death, critical illness etc which can be added with thebase plan by paying a bit more premium.


6/43

Chapter 2: REVIEW OF LITERATURE Studies at International Level:

1)Alessandro Cigno , Annalisa Luporin(2000)Transfers To FamiliesWith Children As A Principal-Agent Problem: The relationship

between government and parents is modelled as a principal-agent problem,with the former in the role of principal and the latter in the role of agents.We make three major points. The first is that, if the well-being of the childdepends not only on luck, but also on parental actions that the government

cannot readily observe, the latter can influence parental behaviourindirectly, by conditioning transfers on performance. The second point isthat, if there are market inputs into the making of a happy or successfulchild, which the government can observe, but cannot ascribe to any

particular parent or child because they are bought anonymously, an incometransfer policy can be usefully complemented by an indirect tax policy thatsystematically distorts prices in favour of these inputs. The third is that, if

parents care about their children, insurance and incentive considerationsmust be tempered by the need to compensate parents who have themisfortune of getting a child with low ability or, more generally, less wellequipped to make the most of life. Ways of making these findings operativeare discussed in some detail.


7/43

2)David I. Levine Un iversity of Californ ia, Berkeley(2008)Effects of HealthInsurance and Selection into Health Insurance: Low income and highmedical expenses can also lead to debt, sale of assets, and removal of children fromschool, especially in poor nations. A short-term health shock can thus contribute tolong-term).At the same time, because households often cannot borrow easily, they

may instead forego high-value care. When they do access care it will often be oflow quality which can lead to poor health outcomes. Theory suggests that healthinsurance can address some of these problems. By covering the cost of care after ahealth shock, insurance can help to smooth consumption, reduce asset sales andnew debt, increase the quantity and quality of care sought, and can improve healthoutcomes.

3)Jonathan Gruber(1996): Health Insurance for Poor Women and

Children in the U.S To low income women and children, has expandeddramatically over the past decade. This expansion provides a `natural laboratory' forlearning about the effect of public health insurance eligibility on insurancecoverage, health utilization, and health outcomes. This paper provides an overviewof what has been learned about these questions from studying the expansions.Medicaid eligibility rose steeply over the 1984-1992 period, but coverage rosemuch less sharply, due to limited takeup of benefits. This is partly due to the factthat many eligibles already had private insurance coverage, and evidence suggeststhat a large share of new enrollees dropped their private coverage to join theprogram. Nevertheless, utilization of preventive care rose substantially as a result ofthe expansions, and there were significant improvements in health outcomes,specifically infant and child mortality. While these mortality reductions came atsignificant cost to the Medicaid program, the cost per life saved was low relative toalternative uses of government funds. These findings highlight both the potentialbenefits of public insurance policy and the importance of appropriately targeting

scarce public health dollars.


8/43

Studies at National Level:

1)ABHINAV GUPTA(2007Children' s Health I nsurance Patterns):This literaturereview is the first task in an eight month research contract awarded by theDepartment of Health and Human Services, Office of the Assistant Secretary forPlanning and Evaluation (ASPE), to Mathematic Policy Research, Inc. (MPR). Theoverall study objective is to improve understanding of the issues involved inanalysis of children's health insurance patterns. This literature review was designedto identify key analytic questions that are not fully answered from current research.Subsequent tasks will include the design and implementation of further analyses ofuninsured children using the Survey of Income and Program Participation (SIPP)and possibly other data as well. These analyses will benefit from the literaturereview, particularly with regard to the identification of methodological issues inmeasuring children's health insurance patterns. This review also provides a basis of

comparison for key estimates produced in the additional tasks of this effort.2)AHMED KHAN(2007)Parental Health Insurance Coverage as Child HealthPolicy:

One of the policy questions expected to receive considerable attention during theState Childrens Health Insurance Program (SCHIP) reauthorization process iswhether -- and if so, under what circumstances to permit states to use SCHIP fundsto cover parents. This analysis examines research published since 2000 that

explores the relationship between public health insurance coverage of parents andthe rate and effectiveness of coverage among children, as measured by insurancelevels, coverage continuity, and appropriate use of pediatric health care. Theanalysis begins with a brief overview of current Medicaid and SCHIP coverageoptions for parents and children. It then summarizes key findings from the literaturerelated to the impact of covering parents on childrens insurance enrollment. Theanalysis concludes with a discussion of the implications of existing studies for the

question of whether to expand state flexibility to use federal SCHIP allotments tocover parents


9/43

NEED OF THE STUDY

These are the most leading banks and their schemes

are much better as compare to other banks. This study

is helpful and beneficial for the customers and

investors like customer protection, protectionagainst Accident and disability, development

allowance, facility of provide free money for

educational purposewho invest their money in this

InsuranceCompany


10/43

OBJECTIVE OF THE STUDY

To study Children insurance policy schemes of

selected companies.

To make a comparative analysis of Childreninsurance policy schemes of selected companies.

To study investors perception towards of selectedbanks about Children insurance policy schemes.


11/43

RESEARCH MEHODOLOGY :

Research DesignThe research design for this study will be Descriptive as wellas Analytical because it will be carried out with specificobjectives and utilizes the large number of data of thePrivate Sector .

Sample Size

For attaining the different objectives, the following Bankswill be taken for the study purposes

30 investors: (25 HDFC and 25 ICICI PRUDENTIAL)

Duration of the StudyFor the purpose of analysis of data, a period of starts from2009-2012 will be taken into consideration.


12/43

Sample Data

The relevant Data will be collected from primary sources likeQuestionnaire and Interview.

Secondary sources: Magazines, Web sites, Periodicals,Newspapers and respective banks.

Statistical Tools

For the data analysis various statistical tools like Comparative Analysis

Percentage Method.


13/43

CHAPTER -2

PROFILE OF ICICI PRUDENTIAL

ICICI Prudential Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse, and Prudential plc, a leading international

financial services group headquartered in the United Kingdom. ICICI

Prudential was amongst the first private sector insurance companies to

begin operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA).

ICICI Prudential Child Plan Review SmartKid or

Smart Ad:

Good education for ones child is something that will always be a cherisheddream for every parent. And good education means good colleges, which

means need for funding. The education costs are going up tremendously

every year, hence it is necessary to save and invest regularly to build up a

decent amount by the time the child is ready to go to college.


14/43

CHILDREN INSURANCE POLICYSCHEMES:ICICI Pru Smart Kid Premium Plan:ICICI Pru Smart Kid RegularPremium.ICICI Pru Smart Kid Premier.ICICI Pru Guaranteed SavingsInsurance Plan


15/43

ICICI Prudential offers 2 child insurance plans to help you protect yourchildsfuture

ICICI Pru Smart KidRegular Premium: It is a traditional plan wherefunds are provided for the needs of the child in the future. regular premiumlife insurance plan, with two options to receive guaranteed educational

benefits, no matter what the uncertainties in your life.

ICICI Pru SmartKid Premier: A regular premium unit linked plan whichensures yourchilds education continues even if you are not around. This

plan helps you invest choose between Fixed Portfolio Strategy and LifeCycle based Portfolio Strategy.

ICICI Pru Guaranteed Savings Insurance Plan: is a non-participatinglimited premium endowment life insurance plan that allows you to enjoythe benefits of a long term savings plan ensuring that you and your familyare free of any financial worries.


16/43

Key Things to knowKey Aspect Things That You Should Know

Is this plan a ULIP No, ICICI Pru Guaranteed SavingsInsurance Plan is not a ULIP. In this plan

you get a Guaranteed Maturity Benefit

which is not linked to equity market

movements

Is this a one-time payment plan No, ICICI Pru Guaranteed Savings Insurance

Plan is Regular Premium plan in which you need

to invest premiums regularly over a period of

time.

How many years do I need to pay premiums You have a choice of paying premiums regularly

for 7 or 10 years

What is the kind of returns I can expect On maturity, you will get the sum of all

premiums paid along with regular additions

which will be declared at the beginning of every

policy year. To check regular additions declared

in the past


17/43

Smart Kid Regular Premium:

Plan is a participating endowment regular premium, traditional plan withtwo options to receive guaranteed educational benefits, no matter what theuncertainties in your life. You will always do everything you can, to makesure your child gets whatever he needs to develop his potential and besuccessful. You have big dreams for your child and you want to make thosedreams come true. To bring your dreams to life, you need an investmentthat is designed to provide adequate money for key educational milestonesin yourchilds life, no matter what happens.

Key Benefits of Smart Kid Regular Premium:

Lump sum payment of Sum Assured plus company contributes futurepremiums in the unfortunate event of death of Parent (life assured).

Development Allowance: Under this benefit, a specified amount is paid tothe child every year, in the unfortunate event of death of the parent.

Facility to provide money for key educational expense of the child.

Protection against Accident and Disability: Additional protection againstaccident and disability is provided with the help.


18/43

Basic features of Smart Kid Regular Premium:

Minimum/Maximum entry age

(Parent)

20-60 yrs

Minimum/Maximum entry age

(Child)

0-12 yrs

Premium paying frequency Monthly, Half-yearly and Yearly

Minimum Premium Monthly, Half-yearly and Yearly

Minimum/Maximum sum assured 1000003000000

Minimum/Maximum Vesting Age 50- 70 yrs


19/43

Benefits:

Coverage options: Ensure a comprehensive safety net for your child by choosingbetween:

Single lifeInsurance coverage for yourself, and Joint lifeInsurance coverage for both you and your spouse in the same policy

Complete protection: Company will pay Lump sum payment of Sum AssuredPLUS waiver of all future premiums payable under the policy by the Company inthe unfortunate event of death of the Parent

Multiple portfolio strategy: Choose a personalized portfolio strategy from:

Fixed Portfolio Strategy: Option to allocate your savings in the funds of yourchoice

LifeCycle based Portfolio Strategy: A personalized portfolio strategy to create anideal balance between equity and debt, based on your age

Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made inequity markets from any future equity market volatility while maintaining a pre-defined asset allocation.

Flexible premium payment options: You can either pay premium throughout thepolicy term or for a limited period

Loyalty additions: Paid at the end of every fifth policy year, starting from the endof the 10 policy year subject to payment of all due premiums

Partial withdrawals: Facility to provide money at key educational milestones ofyour child

Tax Benefits: On premiums paid and benefits received, as per prevailing tax laws


20/43

HDFC Children insurance policy:Incorporated in Aug, 2000 HDFC Standard life is one of the leading privatelife insurance companies in India. HDFC Standard Life is a joint venture

between HDFC- Indias housing finance company and Standard plc United Kingdoms savings and investment Company. HDFC Ltd. holds72.43% and Standard Life (Mauritius Holding) Ltd. holds 26% of equity inthe joint venture while the rest is owned by others.

Parenthood brings responsibilities and no one is better judge of that thanyou. Child Plan is a plan specifically designed to take care of financialneeds of your child. Child plan provides with necessary funds that will takecare ofchilds education, marriage etc. By investing small portion of yoursavings you secure the financial end of your child.Child plan of HDFC Life:

HDFC Childrens Plan

HDFC SL Youngster Super II

HDFC SL Youngster Super Premium


21/43

Features of HDFC STANDARD:


22/43

HDFC SL YoungStar Super II

There is no bigger joy than being able to fulfill your child's dream on your own.

With HDFC SL YoungStar Super II you can fulfill your child's immediate and

future needs. So tomorrow when your child needs your support you don't have todepend on anyone else.This is a ULIP which aims to help you achieve long term

savings.

Features

F t
http://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspx


23/43

Features

Premium Minimum- Rs. 15000Maximum- No Limit

Sum Assured Minimum- 10 X Annual Premium

Grace Period 30 Days

Plan option You can opt for one of the following two plans

Life option- Death BenefitsLife and Health option Death Benefits + Critical Illness

Benefits

Changing Fund You can change your investment fund choices in 2 waysSwitching

Premium Redirection


24/43

ADVANTAGES:

You can customize the ideal plan for your child by choosing the premium

you wish to invest along with the Sum Assured, depending on the level ofprotection required.

This plan can be taken by filling Short Medical Questionnaire, which may

not require you to go for medicals. Kindly refer to the product brochure for

details.

You can change your investment fund choices in two ways: Switching: You can move your accumulated funds from one fund to

another anytime

Premium Redirection: You can pay your future premiums into a

different selection of funds, as per your need

Tax benefits are offered under section 80C and 10(10D) of the Income Tax

Act, 1961


25/43

HDFC SL YoungStar Super Premium

With HDFC SL YoungStar Super Premium you can fulfill your child's immediate

and future needs- all on your own. Start saving now with this unit linked insurance

plan and be assured that savings for your child will continue, even in your absence.

This ULIP plan offers you choice of cover options and benefit paymentpreferences- all designed to suit your needs.

Features

Choice of Plan Options
http://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspxhttp://www.hdfclife.com/KnowledgeCentre/ULIP.aspx


26/43

Choice of Plan Options

Option Death Benefit

(on death of insured

parent during policy

term)

Maturity Benefit

Accelerated Benefit

Plan

Sum Assured payable

immediately on

death + Bonuses

Policy terminates

immediately

OR

Sum Assured +

Bonuses

Maturity Benefit

Plan

No Need to pay

future premiums.

The policy will

continueAND

Sum Assured +

Bonuses

Double Benefit Plan Sum Assured will bepaid on death

No need to pay

future premiums.

The policy will

continue.

AND

Sum Assured +Bonuses


27/43

Bonuses:

Revisionary bonus is usually declared as a percentage of basic

sum assured of policy.

The bonus is guaranteed to be payable either on death or onmaturity as per the plan choice.

The terminal bonus is sometimes added to a policy on maturity

Premium:

The plan allows you to pay premium on quarterly, half yearly

or annually depending on your convenience. A grace period of

15 days is given for the payment of premium.

Tax Benefits:

Tax benefits could be availed under section 80C and 10 (10D)


28/43

CHAPTER- 4

COMPARISON OF SCHEMES OF HDFC

STANDARD AND ICICI PRUDENTIAL

Features Stone ICICI Pru Smart Kid HDFC Children's

Plan

Min / Max

Term child

Matures between 22-25

years of the childs age.

Term is 10-25 years

10-25 year

Min / Max Age

of Child

0-12 years N.A.

Min / Max Age

of Parent

20-60 years 18-60 years


29/43

Payment Modes Regular Regular

Life Assured Child Parents

Beneficiary Child Child / Family

Benefit

Structure

Two Structures

1. When the child

reaches his critical

milestones (Xth, XII th,

Graduation, Post Grad);

% of S A is paid

2. Last 4 years before

maturity; % of SA is

paid over consecutive

yrs

Sum Assured +bonuses paid

on maturity in lump sum


30/43

On Death of

parent

Child gets the guaranteed

payments as chosen earlier

1) Maturity Benefit Plan:

future premiums are waived;

maturity benefits are paid like

normal on maturity

2)Accelerated Benefit Plan:

Sum assured + bonuses paid

to beneficiary on death &

contract terminates

3)Double Benefit Plan: Sum

assured paid immediately on

death; future premiums arewaived; maturity benefits are

paid like normal on maturity

On Death of child Policy continues as it is. It can benominated to another child in that

case also.

Policy continues.


31/43

Analysis through QUESTIONNAI RE

Question:DO YOU POSSESS

CH I LDREN I NSURANCE

POLICY?

Options No. of

CUSTOMER

YES 60%

NO 40%

0%

10%

20%

30%

40%

50%

60%

YES NO

Series1

INTERPRTATION: 60% says

YES and 40% says NO this

shows many people buyingChildren Insurance Policy. and

showing interest towards it.


32/43

Question :WHICH COMPANY YOU ASSOCIATE WITH?

Options No. of

customers

ICICIPRUDENTIAL66%

HDFC

STANDARD

34%

0%

10%

20%

30%

40%

50%

60%

70%

ICICI PRUDENTIAL HDFC STANDA RD

No. of customers

No. of customers


33/43

WHY DO YOU BUY CHIDREN INSURANCE

POLICYSAFETY FOR

LIFE

30%

MARRIAGE

PURPOSE

20%

EDUCATIONAL

PURPOSE

45%

TAX SAVING

5%

SAFETY FOR LIFE

MARRIAGE PURPOSE

EDUCATIONAL

PURPOSE

TAX SAVING

4

INTERPRETATION: This

shows Children Insurance

Policy mostly buying foreducational purpose than

marriage purpose, safety for

life and at last and least for tax

saving purpose.


34/43

WHAT FACTORS OF COMPANY INFLUENCE YOU TO

BUYING CHIDREN INSURANCE POLICY?

INNOVIATIVE

PRODUCTS

25%

BETTER

SERVICES

40%

HIGH RISK

COVERAGE

30%

REASONABLE

PREMIUM

5%

0% 10% 20% 30% 40% 50%

INNOVIATIVE

PRODUCTS

BETTER

SERVICES

HIGH RISK

COVERAGE

REASONABLE

PREMIUM

Series1


35/43

WHICH FEATURES OF COMPANY ATTRACT YOUMOST FOR BUYING CHIDREN INSURANCE POLICY?

GOOD RETURN 35%

ADVERTISMENT 26%

SERVICES 45%

OTHERS 2%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

GOODRETUR

N

ADVE

RTISMEN

T

SERV

ICES

OTHERS

Series1


36/43

ARE YOUR COMPANY PROTECT YOU FROM

THE RISK COVERAGE?

Options No. of

custo

mers

ICICI

PRUDENTIAL

57%

HDFC

STANDARD

43%

No. of customers

57%

43%

CIPRUDENTIAL

HDFC

STA

NDARD

No. of customers


37/43

FROM WHICH FACILITY OF COMPANY YOU

SATISFY MOST?

TERM

DURATION

OF POLICY

55%

TERM

DURATION

OF POLICY

15%

ANNUAL

PREMIUM

30%

55%

15%

30%

TERM

DURATION OF

POLICY

TERM

DURATION OF

POLICY

ANNUAL

PREMIUM

Series1


38/43

Which company provide better service?

ICICI PRUDENTIAL 62%

HDFC STANDARD 38%

0%

10%

20%

30%

40%

50%

60%

70%

HDFC STANDARD ICICI PRUDENTIAL

Series1


39/43

Are you satisfied with the provided facilities?

Satisfied with

facilities

No. of

CUSTOMERS

YES 75%

NO 25%

0% 50% 100%

YES

NO

No. of CUSTOMERS

No. of CUSTOMERS


40/43

CONCLUSION:

ICICI PRUDENTIAL focus on innovative products and better

services than HDFC standard which attract customers most

and focus on the need of customers or annual premium and

bonuses. Advertisement should be create awareness and

interest among customers. Providing policy for securitypurpose and for educational purpose and protect from risk and

any mishappenning .


41/43

FINDING

People think insurance as a protection tool. People purchase insurance policy mostly for protection

purpose and some of people for educational purpose, andsaving and investment purpose.

The goodwill, services, good return of the company alsoattracts customers toward a insurance company.

People also take insurance policy as a security for theirchildren and protection from risk coverage.

ICICI focus on annual premium and term duration of policythan HDFC STANDARD.

ICICI PRUDENTIAL satisfy most than HDFC STANDARDand provide better services to the customers.


42/43

SUGGESTIONS

Advertisement should be done on television and especiallyPosters and Banners. This will greatly help in raisingawareness level.

Insurance Companies focus more facilities and services of thecustomers..

The private company should create good relations andcommunication with the customers by maintaining their trust.

Private companies should spread awareness regarding thebenefits of Children Insurance Plans e.g Risk coverage,educational benefits etc.


43/43

Thank you

Children Insurance policy

Documents

Transcript of Children Insurance policy