comparative study of the products of hdfc standard life insu
TRANSCRIPT
COMPARATIVE STUDY OF THE PRODUCTS OF HDFC STANDARD LIFE
INSURANCE COMPANY AND METLIFE INDIA INSURANCE COMPANY
PREFACE
The contours of insurance business have been changing across the globe and
the ripple effects of the same can be observed in the domestic markets as well.
An evolving insurance sector is of vital importance for economic growth. While
encouraging savings habit it also provides a safety net to both enterprises and
individuals. The insurance industry also provides crucial financial intermediation
services, transferring funds from the insured to capital investment, which is
critical for continued economic expansion and growth, simultaneously generating
long-term funds for infrastructure development. In fact investments in
infrastructure are ideal for asset-liability matching for life insurance companies
given their long term liability profile. Development of the insurance sector is
necessary to support the structural changes in the economy. Social security and
pension reforms too benefit from a mature insurance industry. The insurance
sector in India, which was opened-up for private participation in the year 1999
has completed seven years in a liberalized environment. Since opening up of the
insurance sector in 1999, 24 private companies have been granted licenses by
31st March, 2007 to conduct business in life and general insurance. Of the 24, 15
were in the life insurance and nine (including a standalone health insurance
company) in general insurance. During the last seven years capital amounting to
Rs.9625.28 crore was brought in by the private players, of which the contribution
of the foreign partners has been Rs.2174.28 crore. During this period the
average annual growth of first year premium in the life segment worked out to
47.06 per cent and in the non-life segment it was 16.87 per cent. The industry
services the largest number of life insurance policies in the world. Yet Indian
insurance industry has scope to further expansion with a large untapped
potential.
The Authority and the industry have been playing an active role in increasing
consumer awareness. Insurance companies in general and private insurance
companies in particular, are reaching out to untapped semi-urban and rural areas
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through advertisement campaigns and by offering products suitable to meet the
specific needs of the people in these segments. The insurers are increasingly
introducing innovative products to meet the specific needs of the prospective
policyholders. products, imaginative marketing, and aggressive distribution
enabled fledgling private insurance companies to sign up Indian customers’
faster belying expectations at the time of opening up of the sector. At the time of
opening up of the sector, life insurance was viewed as a tax saving device. Of
late policyholders’ perspective is slowly changing towards taking insurance cover
irrespective of tax incentives. The insurable populace is looking for products
which suit their specific requirements. As of now a variety of choices are
available in the market meeting the requirements of different cross-sections of
the society and across age groups.With the registration of Bharti Axa Life
Insurance Co. Ltd., the number of companies operating in the life insurance
industry has increased to sixteen. The new entrant commenced underwriting life
premium in August, 2006. By end March 2007, there were sixteen life and
sixteen non-life insurance companies (including the national re-insurer). Apollo
DKV, another standalone health insurance company and Future Generali
Insurance Co. Ltd. and Future Generali Indian Life insurance Co. Ltd. were
granted Certificate of Registration in 2007-08 and are in the process of
commencing operations.
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ACKNOWLEDGEMENT
I would like to take an opportunity to thank all the people who helped me in
collecting necessary information and making of the report. I am grateful to all of
them for their time, energy and wisdom.
Getting a project ready requires the work and effort of many people. I would like
all those who have contributed in completing this project. First of all, I would like
to send my sincere thanks to MR. ______________ for his helpful hand in the
completion of my project.
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EXECUTIVE SUMMARY
India has made tremendous progress in the field of healthcare over the last few
decades. Several nagging problems have been put to rest and we have
eradicated some of the killer epidemics (Smallpox, for example). Research in the
field of medicine has also been improving, to be in tandem with the
developments taking place elsewhere in the globe. Healthcare delivery to the
common man, however, has remained a highly debated issue; and there are
several millions of people who remain out of access to even the basic amenities
as regards personal care and hygiene. One of the reasons assigned for such an
unfortunate situation is the vast geographical spread of the population that
remains out of reach for regular medical facilities. For an economy that is
growing at a faster rate than most developed nations, there is an urgent need for
overcoming such irritants. Another oft-quoted reason for such a situation is the
poverty that is the bane of several of these masses. The total percentage of the
Indian population that is covered under the umbrella of any form of healthcare
protection is pathetically low. While the intention is not to parade insurance as a
panacea for all the ills of the society, by improving the numbers of health
insurance penetration among a larger section of people who can afford it; we will
be creating a platform for the state to concentrate on the less-privileged sections.
Unfortunately, health insurance as a viable alternative has not been able to make
giant strides of progress, altho ugh it has been growing, of late. A strong factor
for the poor performance of health insurance historically has been the moral
hazard associated with it. Because of the poor awareness levels about insurance
even among the educated elite, exclusive risk coverage schemes have not
gained popularity in the Indian domain. Having paid the premium for a certain
period, the policyholder imagines an inherent right in the enforcement of a claim.
In several instances, he is aided in the process by service providers reportedly;
and the entire episode results in a huge claims ratio for the insurers that puts
them on the back foot. There is need for all the stakeholders to make the insured
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understand the basic elements of the insurance coverage. Some areas that
insurers on their part may work on are widening the coverage of the policies –
perhaps encouraging preventive care among the insured, for one. It is also
essential that all the stakeholders join shoulders to take the cause further and
ensure that health insurance in India reaches world-class standards.
The health care system in India is characterized by multiple systems of medicine,
mixed ownership patterns and different kinds of delivery structures. Public sector
ownership is divided between central and state governments, municipal and
Panchayat local governments. Public health facilities include teaching hospitals,
secondary level hospitals, first-level referral hospitals (CHCs or rural hospitals),
dispensaries; primary health centres (PHCs), sub-centres, and health posts. Also
included are public facilities for selected occupational groups like organized work
force (ESI), defence, government employees (CGHS), railways, post and
telegraph and mines among others. The private sector (for profit and not for
profit) is the dominant sector with 50 per cent of people seeking indoor care and
around 60 to 70 per cent of those seeking ambulatory care (or outpatient care)
from private health facilities. While India has made significant gains in terms of
health indicators - demographic, infrastructural and epidemiological (See Tables
1 and 2), it continues to grapple with newer challenges. Not only have
communicable diseases persisted over time but some of them like malaria have
also developed insecticide-resistant vectors while others like tuberculosis are
becoming increasingly drug resistant. HIV / AIDS has of late assumed extremely
virulent proportions. The 1990s have also seen an increase in mortality on
account of non-communicable diseases arising as a result of lifestyle changes.
The country is now in the midst of a dual disease burden of communicable and
noncommunicable diseases. This is coupled with spiralling health costs, high
financial burden on the poor and erosion in their incomes. Around 24% of all
people hospitalized in India in a single year fall below the poverty line due to
hospitalization (World Bank, 2007). An analysis of financing of hospitalization
shows that large proportion of people; especially those in the bottom fourincome
quintiles borrow money or sell assets to pay for hospitalization (World Bank,
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2007) This situation exists in a scenario where health care is financed through
general tax revenue, community financing, out of pocket payment and social and
private health insurance schemes. India spends about 4.9% of GDP on health
(WHR, 2007). The per capita total expenditure on health in India is US$ 23, of
which the per capita Government expenditure on health is US$ 4. Hence, it is
seen that the total health expenditure is around 5% of GDP, with breakdown of
public expenditure (0.9%); private expenditure (4.0%). The private expenditure
can be further classified as out-of-pocket (OOP) expenditure (3.6%) and
employees/community financing (0.4%). It is thus evident that public health
investment has been comparatively low. In fact as a percentage of GDP it has
declined from 1.3% in 1990 to 0.9% as at present. Furthermore, the central
budgetary allocation for health (as a percentage of the total Central budget) has
been stagnant at 1.3% while in the states it has declined from 7.0% to 5.5%.
Liberalisation of the insurance sector as well as the increasing demand for health
insurance covers, especially from the middle class, have given a fillip to the
growth of health insurance in the country and today the sector is emerging as
fastest growing segment in the non-life insurance industry. In 2007-08, health
insurance premium stood at more than Rs.3200 crore registering an increase of
35 per cent. Over the last five years the premium has nearly doubled. Despite
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this, health insurance penetration in India continues to be low. There are several
other challenges in the health sector—from the perspective of policyholder,
insurers and the Authority.
With a view to promoting health insurance in the country and looking for possible
solutions to bring in as many people as possible into the insurance net, the IRDA
has, over the last few years, gave special thrust to addressing various issues
concerning health insurance. These initiatives not only develop health insurance
in the country but also address the concerns of the policyholders of health
insurance. The grievance redressal system set up by the Authority enables a
detailed analysis of policyholder grievances and health insurance stands out as a
major area of concern from the customer viewpoint. It was in this backdrop that
the IRDA set up The National Health Insurance Working Group towards the end
of 2008. This provided a platform for stakeholders of the health insurance
industry to work together to suggest solutions to various relevant issues. Some of
the Working Group’s recommendations were implemented and some are under
examination.
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SCOPE OF THE STUDY
HDFC and MetLife is likely to register unprecedented growth of 200% and attain
a size of Rs. 2000 billion by 2009-10, in which a private sector insurance
business will achieve a growth rate of 140% as a result of aggressive marketing
technique being adopted by them against 35-40% growth rate of state owned
insurance companies.
On account of intense marketing and sales strategies adopted by private
insurance players, the market share of state owned insurance companies HDFC
standard life and others have come down to 70% in last 4-5 years from over
97%. The private insurance players despite the sector is still regulated has been
offering rate of return (RoR) to its policy holders which is estimated at about 35%
as against 20% of domestic insurance companies. Secondly, the state owned
insurance companies such as LIC and GIC have limited number of policies to
offer to their subscribers while in case of private insurance companies, their
policy numbers are many more and the premium amount as well as the maturity
period is much competitive as against those of government insurance
companies. Interestingly private sector insurance players have started exploring
the rural markets in which until recently, the state owned companies had the
monopoly. The Chamber has projected that in rural markets, the share of private
insurance players would increase substantially as these have been able to
generate a faith among their rural consumers
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TABLE OF CONTENTS
Page No.
Certificate Issued by the Company
Certificate Issued by the Institute
Preface ii
Acknowledgement iv
Executive Summary v
Scope of the Study ix
1. Introduction 1
2. Profile and Organisation Structure of the Company 28
3. Objective of the Study 40
4. Research Methodology 41
5. Analysis of the Problem under Study 42
6. Interpretation of Result 43
7. Suggestions/Recommendations 50
8. References 52
9. Annexure – Questionnaire 53
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INTRODUCTION
Insurance began as a way of reducing the risk of traders, as early as 5000 BC in
China and 4500 BC in Babylon. Life insurance dates only to ancient Rome;
"burial clubs" covered the cost of members' funeral expenses and helped
survivors monetarily. Modern life insurance started in late 17th century England,
originally as insurance for traders: merchants, ship owners and underwriters met
to discuss deals at Lloyd's Coffee House, predecessor to the famous Lloyd's of
London.
The first insurance company in the United States was formed in Charleston,
South Carolina in 1732, but it provided only fire insurance. The sale of life
insurance in the U.S. began in the late 1760s. The Presbyterian Synods in
Philadelphia and New York created the Corporation for Relief of Poor and
Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian
priests organized a similar fund in 1769. Between 1787 and 1837 more than two
dozen life insurance companies were started, but fewer than half a dozen
survived.
Prior to the American Civil War, many insurance companies in the United States
insured the lives of slaves for their owners. In response to bills passed in
California in 2001 and in Illinois in 2003, the companies have been required to
search their records for such policies. New York Life for example reported that
Nautilus sold 485 slaveholder life insurance policies during a two-year period in
the 1840s; they added that their trustees voted to end the sale of such policies 15
years before the Emancipation Proclamation.
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. There may be
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designs in some countries where bills and death expenses plus catering for after
funeral expenses should be included in Policy Premium. In the United States, the
predominant form simply specifies a lump sum to be paid on the insured's
demise.
As with most insurance policies, life insurance is a contract between the insurer
and the policy owner whereby a benefit is paid to the designated beneficiaries if
an insured event occurs which is covered by the policy. To be a life policy the
insured event must be based upon the lives of the people named in the policy.
Insured events that may be covered include:
Serious illness
Life policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often written into the
contract to limit the liability of the insurer; for example claims relating to suicide,
fraud, war, riot and civil commotion.
Life-based contracts tend to fall into two major categories:
Protection policies - designed to provide a benefit in the event of specified
event, typically a lump sum payment. A common form of this design is term
insurance.
Investment policies - where the main objective is to facilitate the growth of
capital by regular or single premiums. Common forms (in the US anyway) are
whole life, universal life and variable life policies.
Costs, insurability, and underwriting
The insurer (the life insurance company) calculates the policy prices with intent to
fund claims to be paid and administrative costs, and to make a profit. The cost of
insurance is determined using mortality tables calculated by actuaries. Actuaries
are professionals who employ actuarial science, which is based in mathematics
(primarily probability and statistics). Mortality tables are statistically-based tables
showing expected annual mortality rates. It is possible to derive life expectancy
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estimates from these mortality assumptions. Such estimates can be important in
taxation regulation.
The three main variables in a mortality table have been age, gender, and use of
tobacco. More recently in the US, preferred class specific tables were introduced.
The mortality tables provide a baseline for the cost of insurance. In practice,
these mortality tables are used in conjunction with the health and family history of
the individual applying for a policy in order to determine premiums and
insurability. Mortality tables currently in use by life insurance companies in the
United States are individually modified by each company using pooled industry
experience studies as a starting point. In the 1980s and 90's the SOA 1975-80
Basic Select & Ultimate tables were the typical reference points, while the 2001
VBT and 2001 CSO tables were published more recently. The newer tables
include separate mortality tables for smokers and non-smokers and the CSO
tables include separate tables for preferred classes.
Recent US select mortality tables predict that roughly 0.35 in 1,000 non-smoking
males aged 25 will die during the first year of coverage after underwriting.
Mortality approximately doubles for every extra ten years of age so that the
mortality rate in the first year for underwritten non-smoking men is about 2.5 in
1,000 people at age 65. Compare this with the US population male mortality
rates of 1.3 per 1,000 at age 25 and 19.3 at age 65 (without regard to health or
smoking status).
The mortality of underwritten persons rises much more quickly than the general
population. At the end of 10 years the mortality of that 25 year-old, non-smoking
male is 0.66/1000/year. Consequently, in a group of one thousand 25 year old
males with a $100,000 policy, all of average health, a life insurance company
would have to collect approximately $50 a year from each of a large group to
cover the relatively few expected claims. (0.35 to 0.66 expected deaths in each
year x $100,000 payout per death = $35 per policy). Administrative and sales
commissions need to be accounted for in order for this to make business sense.
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A 10 year policy for a 25 year old non-smoking male person with preferred
medical history may get offers as low as $90 per year for a $100,000 policy in the
competitive US life insurance market.
The insurance company receives the premiums from the policy owner and
invests them to create a pool of money from which it can pay claims and finance
the insurance company's operations. Contrary to popular belief, the majority of
the money that insurance companies make comes directly from premiums paid,
as money gained through investment of premiums can never, in even the most
ideal market conditions, vest enough money per year to pay out claims.[citation
needed] Rates charged for life insurance increase with the insurer's age
because, statistically, people are more likely to die as they get older.
Given that adverse selection can have a negative impact on the insurer's
financial situation, the insurer investigates each proposed insured individual
unless the policy is below a company-established minimum amount, beginning
with the application process. Group Insurance policies are an exception.
Insurance vs. assurance
Outside the United States, the specific uses of the terms "insurance" and
"assurance" are sometimes confused. In general, in these jurisdictions
"insurance" refers to providing cover for an event that might happen (fire, theft,
flood, etc.), while "assurance" is the provision of cover for an event that is certain
to happen. However, in the United States both forms of coverage are called
"insurance", principally due to many companies offering both types of policy, and
rather than refer to themselves using both insurance and assurance titles, they
instead use just one
Types of life insurance
Life insurance may be divided into two basic classes – temporary and permanent
or following subclasses - term, universal, whole life, variable, variable universal
and endowment life insurance.
Temporary (Term)
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Term life insurance or 'term assurance' provides for life insurance coverage for a
specified term of years for a specified premium. The policy does not accumulate
cash value. Term is generally considered "pure" insurance, where the premium
buys protection in the event of death and nothing else.
The three key factors to be considered in term insurance are: face amount
(protection or death benefit), premium to be paid (cost to the insured), and length
of coverage (term).
Various (U.S.) insurance companies sell term insurance with many different
combinations of these three parameters. The face amount can remain constant
or decline. The term can be for one or more years. The premium can remain
level or increase. A common type of term is called annual renewable term. It is a
one year policy but the insurance company guarantees it will issue a policy of
equal or lesser amount without regard to the insurability of the insured and with a
premium set for the insured's age at that time. Another common type of term
insurance is mortgage insurance, which is usually a level premium, declining face
value policy. The face amount is intended to equal the amount of the mortgage
on the policy owner’s residence so the mortgage will be paid if the insured dies.
A policy holder insures his life for a specified term. If he dies before that specified
term is up, his estate or named beneficiary(ies) receive(s) a payout. If he does
not die before the term is up, he receives nothing. In the past these policies
would almost always exclude suicide. However, after a number of court
judgments against the industry, payouts do occur on death by suicide
(presumably except for in the unlikely case that it can be shown that the suicide
was just to benefit from the policy). Generally, if an insured person commits
suicide within the first two policy years, the insurer will return the premiums paid.
However, a death benefit will usually be paid if the suicide occurs after the two
year period.
Permanent
Permanent life insurance is life insurance that remains in force (in-line) until the
policy matures (pays out), unless the owner fails to pay the premium when due
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(the policy expires OR policies lapse). The policy cannot be canceled by the
insurer for any reason except fraud in the application, and that cancellation must
occur within a period of time defined by law (usually two years). Permanent
insurance builds a cash value that reduces the amount at risk to the insurance
company and thus the insurance expense over time. This means that a policy
with a million dollars face value can be relatively expensive to a 70 year old. The
owner can access the money in the cash value by withdrawing money, borrowing
the cash value, or surrendering the policy and receiving the surrender value.
The three basic types of permanent insurance are whole life, universal life,
and endowment.
Whole life coverage
Whole life insurance provides for a level premium, and a cash value table
included in the policy guaranteed by the company. The primary advantages of
whole life are guaranteed death benefits, guaranteed cash values, fixed and
known annual premiums, and mortality and expense charges will not reduce the
cash value shown in the policy. The primary disadvantages of whole life are
premium inflexibility, and the internal rate of return in the policy may not be
competitive with other savings alternatives. Riders are available that can allow
one to increase the death benefit by paying additional premium. The death
benefit can also be increased through the use of policy dividends. Dividends
cannot be guaranteed and may be higher or lower than historical rates over time.
Premiums are much higher than term insurance in the short-term, but cumulative
premiums are roughly equal if policies are kept in force until average life
expectancy.
Cash value can be accessed at any time through policy "loans". Since these
loans decrease the death benefit if not paid back, payback is optional. Cash
values are not paid to the beneficiary upon the death of the insured; the
beneficiary receives the death benefit only. If the dividend option: Paid up
additions is elected, dividend cash values will purchase additional death benefit
which will increase the death benefit of the policy to the named beneficiary.
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Universal life coverage
Universal life insurance (UL) is a relatively new insurance product intended to
provide permanent insurance coverage with greater flexibility in premium
payment and the potential for a higher internal rate of return. There are several
types of universal life insurance policies which include "interest sensitive" (also
known as "traditional fixed universal life insurance"), variable universal life
insurance, and equity indexed universal life insurance.
A universal life insurance policy includes a cash account. Premiums increase the
cash account. Interest is paid within the policy (credited) on the account at a rate
specified by the company. This rate may have a guaranteed minimum (for fixed
ULs) or no minimum (for variable ULs). Mortality charges and administrative
costs are then charged against (reduce) the cash account. The surrender value
of the policy is the amount remaining in the cash account less applicable
surrender charges, if any.
Equity-Indexed Universal Life Insurance
Equity-Indexed Universal Life Insurance or "EIUL" for short, is a fixed universal
life insurance policy that was created in the mid 1990s to address concerns
about market volatility and provide an alternative to the low interest rates being
offered by interest-sensitive UL policies.
EIULs differ from interest-sensitive UL policies in that they credit interest to the
policy's cash values based on the upward movement of a particular stock market
index - usually the S&P500. The insurance company can then credit the gains in
the stock market according to one of several different crediting methods. The
most popular is the "point-to-point" method. When the policy is issued, the
insurance company "pegs" the stock market's value. At the anniversary of the
policy, the insurance company checks the value of the underlying stock index
and credits the cash value with the difference up to a cap (specified by the
company). For example, if a policy owner purchased an EIUL on January, and
the insurance company used the S&P500 as the underlying index when crediting
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interest to policy cash values, and the company set a 12 % cap, the process
would work like this:
If the S&P500 was 1,100 in January, the insurance company would record the
value of the index. On the anniversary of the policy (the next January), the
insurance company would record the new value of the S&P500. If the new value
of the index was 1,188, that would represent a gain of 8%. The insurance
company would credit the policy cash values with 8% for that year. If the S&P500
lost value (i.e. the value went from 1,100 to 980), the insurance company would
simply record a "0", and the policy would show a year of no growth. The policy
owner would not; however, lose any money (principal or interest from a previous
year) as a result of a negative return on the S&P500.
Limited-pay
Another type of permanent insurance is Limited-pay life insurance, in which all
the premiums are paid over a specified period after which no additional
premiums are due to keep the policy in force. Common limited pay periods
include 10-year, 20-year, and paid-up at age 65.
Endowments
Endowments are policies in which the cash value built up inside the policy,
equals the death benefit (face amount) at a certain age. The age this
commences is known as the endowment age. Endowments are considerably
more expensive (in terms of annual premiums) than either whole life or universal
life because the premium paying period is shortened and the endowment date is
earlier.
In the United States, the Technical Corrections Act of 1988 tightened the rules on
tax shelters (creating modified endowments). These follow tax rules as annuities
and IRAs do. Endowment Insurance is paid out whether the insured lives or dies,
after a specific period (e.g. 15 years) or a specific age (e.g. 65).
Accidental death
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Accidental death is a limited life insurance that is designed to cover the insured
when they pass away due to an accident. Accidents include anything from an
injury, but do not typically cover any deaths resulting from health problems or
suicide. Because they only cover accidents, these policies are much less
expensive than other life insurances.
It is also very commonly offered as "accidental death and dismemberment
insurance", also known as an AD&D policy. In an AD&D policy, benefits are
available not only for accidental death, but also for loss of limbs or bodily
functions such as sight and hearing, etc.
Accidental death and AD&D policies very rarely pay a benefit; either the cause of
death is not covered, or the coverage is not maintained after the accident until
death occurs. To be aware of what coverage they have, an insured should
always review their policy for what it covers and what it excludes. Often, it does
not cover an insured who puts themselves at risk in activities such as:
parachuting, flying an airplane, professional sports, or involvement in a war
(military or not). Also, some insurers will exclude death and injury caused by
proximate causes due to (but not limited to) racing on wheels and
mountaineering. Accidental death benefits can also be added to a standard life
insurance policy as a rider. If this rider is purchased, the policy will generally pay
double the face amount if the insured dies due to an accident. This used to be
commonly referred to as a double indemnity coverage. In some cases, some
companies may even offer a triple indemnity cover.
Related life insurance products
Riders are modifications to the insurance policy added at the same time the
policy is issued. These riders change the basic policy to provide some feature
desired by the policy owner. A common rider is accidental death, which used to
be commonly referred to as "double indemnity", which pays twice the amount of
the policy face value if death results from accidental causes, as if both a full
coverage policy and an accidental death policy were in effect on the insured.
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Another common rider is premium waiver, which waives future premiums if the
insured becomes disabled.
Joint life insurance is either a term or permanent policy insuring two or more
lives with the proceeds payable on the first death.
Survivorship life or second-to-die life is a whole life policy insuring two lives with
the proceeds payable on the second (later) death.
Single premium whole life is a policy with only one premium which is payable at
the time the policy is issued.
Modified whole life is a whole life policy that charges smaller premiums for a
specified period of time after which the premiums increase for the remainder of
the policy.
Group life insurance is term insurance covering a group of people, usually
employees of a company or members of a union or association. Individual proof
of insurability is not normally a consideration in the underwriting. Rather, the
underwriter considers the size and turnover of the group, and the financial
strength of the group. Contract provisions will attempt to exclude the possibility of
adverse selection. Group life insurance often has a provision that a member
exiting the group has the right to buy individual insurance coverage.
Senior and preneed products
Insurance companies have in recent years developed products to offer to niche
markets, most notably targeting the senior market to address needs of an aging
population. Many companies offer policies tailored to the needs of senior
applicants. These are often low to moderate face value whole life insurance
policies, to allow a senior citizen purchasing insurance at an older issue age an
opportunity to buy affordable insurance. This may also be marketed as final
expense insurance, and an agent or company may suggest (but not require) that
the policy proceeds could be used for end-of-life expenses.
Preneed (or prepaid) insurance policies are whole life policies that, although
available at any age, are usually offered to older applicants as well. This type of
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insurance is designed specifically to cover funeral expenses when the insured
person dies. In many cases, the applicant signs a prefunded funeral arrangement
with a funeral home at the time the policy is applied for. The death proceeds are
then guaranteed to be directed first to the funeral services provider for payment
of services rendered. Most contracts dictate that any excess proceeds will go
either to the insured's estate or a designated beneficiary.
These products are sometimes assigned into a trust at the time of issue, or
shortly after issue. The policies are irrevocably assigned to the trust, and the trust
becomes the owner. Since a whole life policy has a cash value component, and a
loan provision, it may be considered an asset; assigning the policy to a trust
means that it can no longer be considered an asset for that individual. This can
impact an individual's ability to qualify for Medicare or Medicaid.
Investment policies
With-profits policies
Some policies allow the policyholder to participate in the profits of the insurance
company these are with-profits policies. Other policies have no rights to
participate in the profits of the company, these are non-profit policies.
With-profits policies are used as a form of collective investment to achieve capital
growth. Other policies offer a guaranteed return not dependent on the company's
underlying investment performance; these are often referred to as without-profit
policies which may be construed as a misnomer.
Pensions
Pensions are a form of life assurance. However, whilst basic life assurance,
permanent health insurance and non-pensions annuity business includes an
amount of mortality or morbidity risk for the insurer, for pensions there is a
longevity risk.
A pension fund will be built up throughout a person's working life. When the
person retires, the pension will become in payment, and at some stage the
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pensioner will buy an annuity contract, which will guarantee a certain pay-out
each month until death.
Annuities
An annuity is a contract with an insurance company whereby the purchaser pays
an initial premium or premiums into a tax-deferred account, which pays out a
sum at pre-determined intervals. There are two periods: the accumulation (when
payments are paid into the account) and the annuitization (when the insurance
company pays out). For example, a policy holder may pay £10,000, and in return
receive £150 each month until he dies; or £1,000 for each of 14 years or death
benefits if he dies before the full term of the annuity has elapsed. Tax penalties
and insurance company surrender charges may apply to premature withdrawals
(if indeed these are allowed; in most markets outside the U.S. the policy owner
has no right to end the contract prematurely).
Tax and life insurance
Taxation of life insurance in the India
Premiums paid by the policy owner are normally not deductible for federal and
state income tax purposes.
Proceeds paid by the insurer upon death of the insured are not included in gross
income for federal and state income tax purposes; however, if the proceeds are
included in the "estate" of the deceased, it is likely they will be subject to federal
and state estate and inheritance tax.
Cash value increases within the policy are not subject to income taxes unless
certain events occur. For this reason, insurance policies can be a legal and
legitimate tax shelter wherein savings can increase without taxation until the
owner withdraws the money from the policy. On flexible-premium policies, large
deposits of premium could cause the contract to be considered a "Modified
Endowment Contract" by the Internal Revenue Service (IRS), which negates
many of the tax advantages associated with life insurance. The insurance
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company, in most cases, will inform the policy owner of this danger before
applying their premium.
Tax deferred benefit from a life insurance policy may be offset by its low return or
high cost in some cases. This depends upon the insuring company, type of policy
and other variables (mortality, market return, etc.). Also, other income tax saving
vehicles (i.e. Individual Retirement Account (IRA), 401K or Roth IRA) appear to
be better alternatives for value accumulation, at least for more sophisticated
investors who can keep track of multiple financial vehicles. The combination of
low-cost term life insurance and higher return tax-efficient retirement accounts
can achieve better performance, assuming that the insurance itself is only
needed for a limited amount of time.
The tax ramifications of life insurance are complex. The policy owner would be
well advised to carefully consider them. As always, the United States Congress
or the state legislatures can change the tax laws at any time.
Market trends
Life insurance premiums written in 2005According to a study by Swiss Re, the
EU was the largest market for life insurance premiums written in 2005 followed
by the USA and Japan.
Although some aspects of the application process (such as underwriting and
insurable interest provisions) make it difficult, life insurance policies have been
used in cases of exploitation and fraud. In the case of life insurance, there is a
motivation to purchase a life insurance policy, particularly if the face value is
substantial, and then kill the insured.
The television series Forensic Files has included episodes that feature this
scenario. There was also a documented case in 2006, where two elderly women
are accused of taking in homeless men and assisting them. As part of their
assistance, they took out life insurance on the men. After the contestability period
ended on the policies (most life contracts have a standard contestability period of
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two years), the women are alleged to have had the men killed via hit-and-run car
crashes.
Recently, viatical settlements have thrown the life insurance industry into turmoil.
A viatical settlement involves the purchase of a life insurance policy from an
elderly or terminally ill policy holder. The policy holder sells the policy (including
the right to name the beneficiary) to a purchaser for a price discounted from the
policy value. The seller has cash in hand, and the purchaser will realize a profit
when the seller dies and the proceeds are delivered to the purchaser. In the
meantime, the purchaser continues to pay the premiums. Although both parties
have reached an agreeable settlement, insurers are troubled by this trend.
Insurers calculate their rates with the assumption that a certain portion of policy
holders will seek to redeem the cash value of their insurance policies before
death. They also expect that a certain portion will stop paying premiums and
forfeit their policies. However, viatical settlements ensure that such policies will
with absolute certainty be paid out. Some purchasers, in order to take advantage
of the potentially large profits, have even actively sought to collude with
uninsured elderly and terminally ill patients, and created policies that would have
not otherwise been purchased. Likewise, these policies are guaranteed losses
from the insurers' perspective.
Life Insurance Corporation of India
Life Insurance Corporation (LIC) came into existence on 1st September 1956
through the amalgamation of 154 Indian insurance companies, 16 non-Indian
companies and 75 provident. The amalgamation was achieved with the help of
Life Insurance Act passed by the Parliament in the same year. The LIC was
created with the goal of reaching all the insurable people in the country and
providing them financial coverage at a reasonable price. In the year 1956, LIC
had 5 zonal offices, 33 divisional offices and 212 branch offices. With time there
was a need for a branch office at every district headquarter and many branches
were opened, which raised the pace of the organization.
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LIC now has 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the corporate office. At present, online premium collection
facility is being offered in selected cities as LIC has tied up with some banks and
service providers. For providing customer satisfaction the organization has
introduced various schemes such as ECS, ATM premium payment facility, IVRS,
Info centers which are set up in various cities including Mumbai, Bangalore,
Chennai, Kolkata, New Delhi, Pune and many more. It has also come up with
SATELLITE SAMPARK offices providing easy access to policyholders. LIC has
crossed many milestones and set standards for itself fostering unmatched
performance.
Initiative
Holding the money with obligation and using it in the best possible manner
in the interests of the policyholder and the community.
Bringing attractive savings plans and making them easily accessible to the
policyholders.
Giving attractive returns to the people and keeping in mind national
priorities.
Being trustworthy to the customers and develop the spirit of corporate
social responsibility.
Spreading insurance in both rural and urban areas and covering all the
insurable persons at a reasonable cost.
Bringing in plans and policies favorable to the changing environment.
Providing efficient service and involving people in the organization for their
satisfaction.
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Bajaj Allianz General Insurance Company Limited
Bajaj Allianz General Insurance Company Limited is a joint venture between
Bajaj Auto Limited and Allianz AG of Germany.
Bajaj Allianz General Insurance came into existence on 2nd May 2001, when it
got certification of Registration from the Insurance and Regulatory Development
Authority. Bajaj Auto has a share of 74%, whereas Allianz has the remaining
26%. In the very first year, the company made a strong position for itself in the
industry and was reckoned amongst the top private insurers. The premium
income of the company as on 31st March 2006 was Rs. 1285 crores, whereas
the profit after tax made was Rs. 52 crores. Bajaj Allianz has a Pan India network
covering over 100 towns from Jammu to Thiruvananthapuram and aims to
spread its operations in many other cities.
The vision of the organization is to be the first choice for customers, and provide
job satisfaction to the employees and create shareholder value. The organization
strives to excel in its products and services, providing total customer satisfaction.
Bajaj Allianz serves customers in all areas of General and Health Insurance as
well as Risk Management. It has in-depth knowledge of the local market and
extensive distribution network with expertise, stability and experience. It has a
capital base of Rs. 147 crores, and is allowed to serve both the General and
Health insurance.
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It has achieved iAAA rating, by ICRA Limited and has the highest claims- paying
ability and a stable position in the market. In a 2006 survey, Business World has
rated it among the Most Respected Companies, putting it at No.2 position in
Insurance sector.
The Company provides the following products under general insurance:
Travel Insurance
Asset Insurance
Health Insurance
Corporate Insurance
ICICI Prudential Life Insurance Company
ICICI Prudential is a joint venture between ICICI bank and Prudential plc, both
having strong operations in their respective countries. ICICI bank is one of the
leading banks in India providing quality financial services and Prudential is an
international financial service provider headquartered at United Kingdom. ICICI
and Prudential have respective shares of 74% and 26%. The Company started
operating in December 2000. Currently, total capital with the company is Rs.
18.15 billion.
ICICI Prudential was the first insurance company in India to receive a National
Insurer Financial Strength rating of AAA (Ind.) from Fitch ratings. It has been
given the honour of being among the Most Trusted Brands in the industry by
Economic Times for 3 consecutive years. It has a network of 450 branches, over
1,50,000 insurance advisors and 18 bancassurance partners.
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As the organization grows and develops, it keeps introducing new range of
products and services and enhancing the quality of plans and solutions given to
the customers. The distribution network is one of the best, and is spreading
across the length and breadth of the country. As on December 31, 2006, it had
made imprints in over 360 cities and towns in India. It has over 1,75,000 advisors
across the country, serving clients with full commitment. It has tied up with ICICI
Bank, Bank of India, Federal Bank, Lord Krishna Bank, some co-operative banks,
NGOs, MFIs and corporates for making inroads into the rural areas.
Products
Insurance Solutions for Individuals: ICICI Prudential Life Insurance offers several
novel, customer-centric products for customers at every stage of life. The
products and services offered by the organization are in various fields, such as:
Savings & Wealth Creation Solutions
Premier Life Gold
LifeLink Super
Invest Shield Life New
Cash Plus
Cash Bak
Life Time Super & Life Time Plus
Save 'n' Protect.
Retirement Solutions
Life Link Super Pension
Forever Life
Immediate Annuity
Life Time Super
Child Plans
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Education insurance - Smart Kid
Protection Solutions
Life Guard
Home Assure
Group Insurance Solutions
ICICI Prudential also offers Group Insurance Solutions for companies
seeking to enhance benefits to their employees.
Group Immediate Annuities
Group Term Plan
Group Superannuation Plan
Group Gratuity Plan
ICICI Lombard General Insurance
ICICI Lombard General Insurance Company Limited is a joint venture between
ICICI Bank Limited and Fairfax Financial Holdings Limited. ICICI bank is India's
second largest bank; Fairfax is Canada-based, engaged in general insurance,
reinsurance, insurance claims management and investment management. ICICI
Lombard General Insurance Company commenced its operations in general
insurance business in August 2001.
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ICICI Lombard is India's number one private insurance company; it is also the
first general insurance company to be given certification of ISO 9001:2000. The
company provides simple and fast documentation, fast claims settlement, online
policy issuance, and comprehensive product line.
It has also been given iAAA rating by ICRA for having highest claims paying
ability. In the very first year of operations, it was able to reach financial
breakeven and achieve underwriting breakeven in the second year. Security is
provided through encryption and it is the first company to provide digitally signed
documents. It has been honored as the most Customer Responsive Company by
the Economic Times. Times of India has designated it as the Best Housing
Insurance in the Smart Living Awards by 360 degrees. It has also been awarded
Gold Shield for "Excellence in Financial Reporting". It is among the top three
companies to be awarded the "General Insurance Company of the Year" at the
10th Asia Insurance Industry Awards.
Products
Business Solutions
Industrial All Risk
Fire and Special Perils
Electronic Equipment Insurance
Fidelity Insurance
Consequential Loss (Fire) Insurance
Tea Corp Insurance
Burglary Insurance
Machinery
Personal Solutions
Group Personal Accidents
Health
Health Insurance
Project Solutions
Contractors' All Risk
Contractors' Plant & Machinery
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Erection All Risk
Performance Guarantee
Liability Solutions
Director's & Officers Liability
Product Liability
Workmen's Compensation
Event Insurance
Product Liability
Travel Insurance
Senior Citizen Overseas Travel
Individual Overseas Travel
Corporate Overseas Travel
Domestic Travel
Birla Sun Life Insurance Company Limited
Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between
Aditya Birla Group and Sun Life Financial Inc. BSLI started functioning in March
2001 after getting the certificate of registration from IRDA.
Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance
Solutions in India. Within a short span of time it was able to establish itself as a
leading player in the Private Life Insurance Industry. It has been innovative and
come up with customer-centric products to provide safety and services. The
company has web-enabled IT systems for better customer services and a strong
distribution channel which is easily approachable. The company shows corporate
governance and a high degree of transparency in all business practices. It has
professional knowledge and global expertise of Aditya Birla Group.
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Birla Sunlife Insurance has been providing first class financial solutions to its
customers and has been amongst the top three private sector life insurance
companies.
Its mission is to be amongst the top players in the eyes of customers and the first
choice of insurance and retirement solutions to individuals and groups. These
innovative solutions are linked with global and technical expertise and are
deployed by a multi channel distribution network and enhanced technology.
The company aims at keeping all people associated with it - customers, clients,
stakeholders and employees- happy and fully satisfied. It wants to provide value
added products and services to the customers, job satisfaction to employees and
highest returns to the shareholders.
Qualities like integrity, commitment, passion, and speed are the core values of
the company. The products offered by the company are:
Individual Life
Protection
Premium Back Term Plan
Birla Sun Life Term Plan
Saving
Simply Life
Flexi Save Plus
Supreme Life
Life Companion
Flexi Cash Flow
Prime Life
Flexi Save Plus
Children
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TATA AIG General Insurance
Tata AIG General Insurance Company Ltd. is a joint venture between Tata Sons
and American International Group, Inc. (AIG). The Tata Group is holding 74 per
cent stake and the rest 26 percent is held by AIG. The company has got the
expertise, knowledge and strength of both the organizations.
Tata AIG General Insurance Company was founded on January 22, 2001. It
offers general insurance in various categories, such as automobile, home,
personal accident, travel, energy, marine, property and casualty and specialized
financial solutions.
Jamsetji Tata founded Tata Group in 1860s. It has an estimated turnover of
around US $ 14.25 billion. It has spread its operations in various fields such as
steel, power, hotels, airlines, software services, communications, etc. Some of its
major projects have been Tata Tea, Tata Steel, Tata Chemicals, Titan, Tanishq,
Voltas, Westside and Tata Motors. Its imprints are made on the
telecommunication and technology sector. Regarding telecommunications, it is
the largest international long distance service provider. Approximately two- third
of the equity of Tata Sons is held by a host of national institutions in science and
technology, medical services and performing arts. By combining the ethical
values with business acumen and fulfilling its commitment to the nation, it has
become one of the largest groups in India.
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American International Group, Inc. (AIG) is the leading international player in
insurance and financial services. Its network spreads across 130 nations. AIG
member companies serve all types of customers, be it commercial or individual.
AIG is among the leading insurers and the largest underwriter of insurance.
Aircraft leasing, financial products and trading are some of the services offered
by AIG. AIG has a global expertise of fulfilling the customer-centric needs. It has
specialized investment management capabilities in equities, fixed income,
alternative investments and real estate. AIG's stock has been listed in the New
York Stock Exchange as well as stock exchanges in London, Paris, Switzerland
and Tokyo.
The organization caters to individuals, small businesses and corporates.
Individual plans include motor, home, accident & health and travel insurance,
whereas corporate plans include accident & health, travel, energy, property,
marine and liability plans.
New India Assurance Company
Sir Dorab Tata founded New India Assurance Company on 23rd July 1919. It has
1068 offices comprising of 26 regional offices, 393 divisional offices and 648
branches with more than 21,000 employees.It is one of the largest Non- Life
insurers in Afro- Asia and the first one to cross Rs. 5,000 crores of Gross
Premium. It has a global network expanding in countries like Japan, U.K., Middle
East, Fiji and Australia. Its international operations started in 1920 and have
spread across 24 countries having a network of 19 branches, 12 agencies, 2
associate companies and 2 subsidiary companies. The company contributes
80% of total overseas premium in India.The company has a highly qualified staff,
which excel in both expertise and knowledge and are trained to provide
satisfaction to the customers. It is the only company able to establish strong
relationships overseas and has a record of successful trading outside India. The
performance has been outstanding and the company has been able to maintain a
strong position in the market.
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It has been the pioneer in various fields such as:
Setting up an Aviation Insurance Department in 1946.
Handling the complete insurance requirements of the Indian Shipping
Fleet.
Introduced its own Training School.
Pioneering the concept of 'Model Office Training'.
Creating department in Engineering insurance.
Satellite insurance.
The company wants to develop itself as the best general insurance company in
the industry. It is concerned about the society and community, and provides
financial security at reasonable prices. The company gives utmost importance to
customer needs and there is transparency in its operations. Some of the policies
and schemes introduced by the company are:
Public Liability Policy
Jewellers Block Policy
Pravasi Bharatiya Bima Yojana Policy
Universal Health Insurance Scheme
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Fire Policy
IFFCO Tokio General Insurance
IFFCO Tokio General Insurance is a customer-centric company aiming to be
easily accessible and approachable to all sections of society. It offers products
and services that provide quality at reasonable cost. The organization has the
deep knowledge of IFFCO and thus developed a business plan that has both
stability and integrity.
It has set global standards for itself and is the only private general insurance
company in India to make 5 consecutive years of experience. ITGI has been one
of the few companies to show underwriting profits within four years of operations.
The company focuses on delivering creative solutions to its customers. IFFCO
Tokio General Insurance has 273 employees present in 68 cities, dedicated to
give full satisfaction to the customers. It is the first company to underwrite mega
policies for a fertilizer and automobile client.
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The Oriental Insurance Company Ltd.
The Oriental Insurance Company Ltd. (OICL) is one of the general insurance
companies under the support of the General Insurance Corporation (GIC) of
India. It came into existence in the year 1947 and is one of the oldest
organizations in India. It caters to all sections and sectors ranging from MNCs to
rural sector. The headquarters of the company are situated at Delhi and it has 21
Regional Offices, 311 Divisional Offices and 635 Branch offices.
It has a team of hard working employees, having the talent to take the company
to new heights. Also the company shows concern for both the employees and
customers. It provides special covers for large projects like power plants, steel
plants and chemical plants.
It believes in actively participating in economic growth by being a dynamic
organization catering to the society with full commitment and efficiency. The main
objectives of the company are to serve the insurance needs of the entire
community, provide services at reasonable cost, make optimum utilization of the
funds, maintaining global standards, minimization of losses and retention of
business.
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PROFILE AND ORGANIZATION STRUCTURE OF THE
COMPANY
HDFC STANDARD LIFE
Profiles
HDFC Standard Life Insurance Company Limited is one of the first companies to
be licensed by IRDA to operate in the Insurance sector. The company came into
existence on 14th August 2000. Both Crisil and ICRA have honored it with AAA
Ratings. Similarly Moody's and Standard and Poors have also honoured it AAA
ratings. HDFC holds 81.4% share in HDFC and the remaining 18.6% stake is
with Standard Life. It integrates the strong expertise and stability of Standard Life
and HDFC. It is one of the most trusted companies; it is easily accessible and
approachable, offering value services to its customers.
The company aims to provide:
Innovative products to cater to different needs of different customers
Customer service of the highest order
Use of technology to improve service standards
Value for money for customers
Increasing market share
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Professionalism in carrying out business
The values ingrained in the company are to provide financial security to
policyholders, maintain trust and keep innovating to establish it as a unique
player.
HDFC Standard Life Insurance, a joint venture between HDFC and Standard Life
Assurance Company, Europe’s largest mutual life company, has identified the
rural market as an important thrust area for its future growth.
The company, ranked number 4 among the private players in the insurance
sector thus far in terms of number of policies sold, presently has 100 rural
consultants already in four rural belts namely Amravati in Maharashtra,
Nelikuppam in Tamil Nadu, Panipat in Haryana and areas near Pune and
Nagpur.
Organisation Structure
HDFC is a professionally managed organisation with a board of directors
consisting of eminent persons who represent various fields including finance,
taxation, construction and urban policy & development. The board primarily
focuses on strategy formulation, policy and control, designed to deliver
increasing value to shareholders.
HDFC has a staff strength of 1029, which includes professionals from the fields
of finance, law, accountancy, engineering and marketing.
BOARD OF DIRECTORS
Mr. Jagdish Capoor Mr. Aditya Puri Mr. Keki M. Mistry Mr. Vineet Jain Mrs. Renu
Karnad Mr. Arvind Pande Mr. Ashim Samanta Mr. C M Vasudev Mr. Gautam
Divan Dr. Pandit Palande Mr. Paresh Sukthankar
Reaching Out
HDFC has 130 offices spread all over the country. This extensive network helps
HDFC in providing quality service to its large and extensive client base. In 1996,
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HDFC established an office in Dubai. HDFC has further enhanced its presence in
the Middle East with Service Associates in Bahrain, Kuwait, Oman, Qatar and
Saudi Arabia. HDFC has also evolved the concept of an "Outreach" programme.
An "Outreach" programme is a one or two-day visit, made by HDFC to reach
customers in locations where HDFC does not have an office. Currently, HDFC
has over 90 outreach locations.
Product Portfolio
At HDFC Standard Life, offer a bouquet of insurance solutions to meet every
need. it cater to both, individuals as well as to companies looking to provide
benefits to their employees. This section gives you details of all products. HDFC
have incorporated various downloadable forms and product details so that
customer can make an informed choice about buying a policy.
Individual Product
Group Product
Rural Product
Social Product
Tex Benefits
Individual Product
Protection range includes
Term Assurance Plan
Loan Cover Term Assurance Plan
Home Loan Protection Plan
Investment Plans
HDFC Investment products are well suited to meet your long-term needs.
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Investment range includes
Single Premium Whole Of Life plan
Unit Linked Wealth Maximiser Plus
Pension Plans
Pension Plans help you secure your financial independence even after
retirement.
Pension range includes
Personal Pension Plan
Unit Linked Pension
Unit Linked Pension Plus
Unit Linked Pension II
Unit Linked Pension Maximiser II
Savings Plans
Savings Plans offer you flexible options to build savings for your future needs
such as buying a dream home or fulfilling focus children’s immediate and future
needs.
Savings range includes
Endowment Assurance Plan
Assurance Plan
Savings Assurance Plan
Children’s Plan
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Money Back
Unit Linked Endowment
Unit Linked Endowment Plus
Unit Linked Endowment Suvidha
Unit Linked Endowment Suvidha Plus
Unit Linked Endowment II
Unit Linked Endowment Plus II
Unit Linked Young Star
Unit Linked Young Star Plus
Unit Linked Young Star Suvidha
Unit Linked Young Star Suvidha Plus
Unit Linked Young Star II
Unit Linked Young Star Plus II
Unit Linked Enhanced Life Protection II
SimpliLife
Health Plans
Health plans provides with timely support in case of any health related
emergencies and helps and customer family to remain financially independent in
difficult times.
Our Health range include
Critical Care Plan
Group Products
One-stop shop for employee-benefit solutions
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HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees. We offer different products for different needs of
employers ranging from term insurance plans for pure protection to voluntary
plans such as superannuation and leave encashment.
We now offer the following group products to our esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
METLIFE INSURANCE
MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc.
and was incorporated as a joint venture between MetLife International Holdings,
Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and
other private investors. MetLife is one of the fastest growing life insurance
companies in the country. It serves its customers by offering a range of
innovative products to individuals and group customers at more than 600
locations through its bank partners and company-owned offices. MetLife has
more than 32,000 Financial Advisors, who help customers achieve peace of mind
across the length and breadth of the country. For more information about
MetLife, please visit the company’s website at www.metlife.co.in.
MetLife, Inc., through its affiliates, reaches more than 70 million customers in the
Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include
the number one life insurer in the United States (based on life insurance in force),
with over 140 years of experience and relationships with more than 90 of the top
one hundred FORTUNE 500® companies. The MetLife companies offer life
insurance, annuities, automobile and home insurance, retail banking and other
financial services to individuals, as well as group insurance, reinsurance and
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retirement and savings products and services to corporations and other
institutions.
Organizational Structure
Rajesh Relan -Managing Director
Phanesh M S V S Appointed Actuary
Girish Malhotra Director - Agency
Nick Taket -Chief Financial Officer
Sameer Bansal Director - BA & BP
K R Anil Kumar Director - Financial Planning & Controller
Sankaran P S Director - Business Support
K S Raghavan Chief Administrative Officer
Gaurav Sharma Director - Customer Service & Operations
Amita Maheshwari Director - Human Resources
Preetinder Chadha Deputy Director - Corporate Sales & Sales Training
Vijay Raghavan Director - Marketing & Strategy
Product Portfolio
Individual Product
Group Product
Rural Product
No one can give you all the answers when it comes to dealing with life's ups
and downs. But we can certainly equip you to deal with life better. Please find
below the various products offered by MetLife to suit your specific need:
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Accumulation
Whole Life Policy
Met 100- Limited Pay Whole life Non - Participating
Met 100- Limited Pay Whole life Participating
Endowment Policy
MET Suvidha
Money Back Policy
Met Sukh Money Back Non Participating
Met Bhavishya
Multi Purpose
Met Smart Gold
Met Easy
Met Smart Plus
Met Smart Premier
Met Smart Plus - Single Pay
Met Smart Premier - Single Pay
Protection
Met Suraksha - TROP
Met Suraksha - TA
Met-Mortgage Protector SP/Limited pay(MRTA)
Retirement
MET Pension - Participating Deferred Annuity
MET Advantage Plus
Add Ons
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Accidental Death Benefit (ADB)
Term Rider
Waiver Of Premium
Critical Illness
MetLife offers a range of employee/member benefit solutions:
Protection Products
Met Loan Assure
Met Group Life
Met Group Life in lieu of EDLI
Met Group Riders
Fund Products
Met Gratuity
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COMPARISON BETWEEN HDFC STANDARD LIFE AND METLIFE
INSURANCE
Group Insurance
One-stop shop for employee-benefit solutions
HDFC Standard Life and Met life both has the most comprehensive list of
products for progressive employers who wish to provide the best and most
innovative employee benefit solutions to their employees. We offer different
products for different needs of employers ranging from term insurance plans for
pure protection to voluntary plans such as superannuation and leave
encashment.
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It offer the following group products to our esteemed corporate clients:
• Group Term Insurance
• Group Variable Term Insurance
• Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with
Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave
Encashment schemes of your company. Also suitable for other employee benefit
schemes such as salary saving schemes and wealth management schemes.
Social Insurance
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to
members of a Development Agency for a term of one year. On the death of any
member of the group insured during the year of cover, a lump sum is paid to that
member’s beneficiaries to help meet some of the immediate financial needs
following their loss.
Eligibility
Members of the development agency and their spouses with:
• Minimum age at the start of the policy 18 years last birthday
• Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The
group to be covered is only eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in the group and will be the
same for all members of the group.The premium can only be paid by the
Development Agency as a single lump sum that includes all premiums for the
group to be covered. Cover will not start until the premium and all the member
information in our specified format has been received.
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The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.
Benefits
On the death of each member covered by the policy during the year of cover a
lump sum equal to the sum assured will be paid to their beneficiaries or legal
heirs. Where the death is as a result of an accident, an additional lump sum will
be paid equal to half the sum assured. There are no benefits paid at the end of
the year of cover and there is no surrender value available at any time.
MetLife India has launched Met Ultimate, a life insurance policy, which assures
minimum returns (net rate of 3.5 per cent per annum) and an additional bonus
interest based on investment performance. The policy covers up to age 100 and
offers the facility to withdraw cash from the accumulation account after the first
two years. Met Ultimate offers three death benefit options to choose from. It also
comes with the flexibility of increasing or decreasing the face amount. The
premiums will be based on age, sex and smoker/non-smoker classification
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OBJECTIVE OF THE STUDY
(a) To study the Insurance and Growth in public and private insurance
companies in India.
(b). To Assessment the opportunity and Risks involve in insurance sector.
(c) To study the Regulatory Framework for insurance sector.
(d) Comparison between HDFC and Met life Insurance according to their product
portfolio.
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RESEARCH METHODOLOGY
The various tools likely to be used to research are internet search, newspaper
and general guidance from the external guide.
Primary Source: Through Questionnaire, collecting data from the
insurance company to know about the sales of insurance
Secondary source: Various insurance journal and government Journal
like IRDA also through various insurance related website
Sample Size- Met Life & HDFC standard life
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ANALYSIS OF THE PROBLEM UNDER STUDY
Insurance is estimated to be Rs.400billion business in India and the gross
premium collection is about 2% of GDP growing between 15% and 20% per
annum. India also has the highest number of insurance policies in force in the
world and the total investible funds with LIC alone are almost 8% of GDP. Yet,
more than three-fourth of India's insurable population has no life insurance cover.
Considering that only about 65million out of 250 million people are covered by life
insurance, the potential is quite evident.
I tried and analyze the benefit that getting to the final customer covering under
the Insurance and because various types of policies and instruments are coming
up in the market to attract more customers. Most of the population of India is not
insured, hence there is a lot of scope in this sector and a number of companies
are planning to enter the sector. Every futuristic individual would want himself to
get insured
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INTERPRETATION OF RESULT
1. Please mention the name of the insurance company through which maximum through
you like to cover your life
Category No of Respondent
HDFC Standard life 8
BIRLAS 1
LIC 10
TPA 8
Others 6
Met life 6
ICICI Prudential 11
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From here with this question we are trying to analyze that business opportunity of
both the company i.e. HDFC standard life and Met life in current scenario or
market and what percentage of market they are covering right now.
From our survey it is clearly mentioned that market leader insurance company is
ICICI Prudential whereas 11 people out of 50 respondent having insurance from
ICICI also LIC would be come in second place where as 10 respondent are taken
insurance from the company of LIC.
Now for the third and fourth slot the big fight is between Met Life where this
company takes a share of 6 people out of 50 and the HDFC standard life which is
renowned brand due to its market has 8 people in favor of out of 50.
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2. Please mention the type of insurance policy you are covered under
Individual 30
Corporate 20
Here are one more clue that will reach HDFC & Met life plan to launch insurance
HDFC & Met life services in India 60% people responded that they have
individual insurance policy while 20% people still with corporate side.
Recommendation for HDFC & Met life that that 60% people want more and more
service from the insurance company and in coming days people want hazel free
life if somebody tell him pay for that they are ready to pay reasonable amount for
the better and effective service. With the same product portfolio will increase the
penetration of the insurance company.
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3. Please mention the type of insurance you are covered under
Category No of Respondent
Accidental 11
Health 14
Life 23
Any other 2
Here from our survey we got to know that more respondent are taken multiple or
Life insurance for taking them insured 23 people out 50 are insured by the life
insurance.
While 14 people are taken health insurance, and 11 are taken accidental
insurance.
For recommendation of HDFC & Met life they tap life insurance company easily
because the life insured people take any policy for lifelong so the HDFC & Met
life involved at least more than 20 yrs, in fact health service is more complicated
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one so HDFC & Met life help client to better customer service rather than its
competitor if they will take service of HDFC & Met life
4. Is HDFC Insurance more affordable than the other Insurance available on your nearest
telecom shops?
Strongly Agree 76
Agree 97
Disagree 38
Strongly Disagree 46
Neutral 43
This question gives us insight of the affordability of the Insurance or service.
With low disposable incomes, Insurances need to be affordable to the Delhi
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consumer, most of who are on daily wages. Now we check what Delhi customer
want from the company in terms of their Insurance prices.
Out of 300 sample size we consider to choose first strongly agree respondent
who believes that HDFC Insurance is affordable for him/her 25% respondent out
of 300 says HDFC Insurance is affordable in comparative of other competitor.
While 33% are only agree with this statement that HDFC has much affordable
price of their respective Insurance. Now moving ahead 28% respondent are still
not agree or strongly disagree with this question they thought Met life Insurances
are much costlier than the other mobile service provider companies Insurance.
14% respondent said they have mixed view about the affordability these people
are those who are richer in Delhi region.
Recommendation for Met life would be target 28% people also to provide much
more scheme and plan so they comes under the pie of affordable range.
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5. The various ranks given by the customers about their perception about
different players in the market:
Attributes Brands ICICI HDFC Met
life
Others
Cheap 6 6 5 9
Easy Availability 10 10 7 6
Quality 9 7 8 6
Total 25 24 20 21
In the above table it is quite clear that ICICI is given the highest points in the
product satisfaction and reliability on the parameters given above. Where as
HDFC has a 24 score out of 30 for there product portfolio It is evident that Met
life has to improve lot on there product portfolio so that met life Insurance is
having rises its lower number one due to its two main attributes it is not easy
availability and cheap price.
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SUGGESTIONS/RECOMMENDATION
HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees. We offer different products for different needs of
employers ranging from term insurance plans for pure protection to voluntary
plans such as superannuation and leave encashment.
We now offer the following group products to our esteemed corporate clients:
• Group Term Insurance
• Group Variable Term Insurance
• Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with
Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave
Encashment schemes of your company. Also suitable for other employee benefit
schemes such as salary saving schemes and wealth management schemes.
Across the world, corporations striving to be more productive, look to meeting the
key needs of their employees through exceptional employee benefit programmes
that can help them attract and retain the best people.
Where as Met life vision is to help employers and emploees select the right mix
of life insurance and service features to fit their given situation, making group life
a cornerstone to building financial freedom
Products
MetLife offers a range of employee/member benefit solutions:
1. Protection Products
• Met Loan Assure
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• Met Group Life
• Met Group Life in lieu of EDLI
• Met Group Riders
2. Fund Products
• Met Gratuity
Services
MetLife offers the following services
• Defined Service Parameters
• Easy Policy administration
• Strong & reliable operations and underwriting team
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REFERENCES
Berman, Peter. "Rethinking Health Care Systems: Private Health Care Provision
in India." Harvard School of Public Health Working Paper, November 1996.
Business Today. "The Monitory Group Study on Insurance I and II." March 22
and April 7, 2000.
Kumari, Vaswati, "India Insurers Seek Perfect Partners." National Underwriters,
March 5, 2001, 38-39.
Roy, Abhijit. "Pension fund business in India." The Hindu, July 16, 1997, p. 25.
Roy, Samit. "Insurance Sector: India." Industry Sector Analysis, National Trade
and Development Board, US Department of State, Washington, DC, December
1999.
Sigma. "World Insurance in 1999." No. 9/2000. Published by SwissRe. Available
at www.swissre.com.
Sinha, Tapen. Pension Reform in Latin America and Its Implications for
International Policymakers. Boston, USA, Huebner Series Volume No. 23,
Kluwer Academic Publishers, 2000.
U.S. Department of State FY 2001 Country Commercial Guide: India.
Commercial Guide for India was prepared by U.S. Embassy New Delhi and
released by the Bureau of Economic and Business in July 2000 for Fiscal Year
2001.
www.hdfcstandardlife.com
www.metlifeindia.com
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ANNEXURE
QUESTIONNAIRE
1. Please mention the name of the insurance company through which
maximum through you like to cover your life
a) LIC b) HDFC c)BIRLAs
d) Met life e) ICICI PRUDENTIAL f)OTHERS(specify)
2. Please mention the type of insurance policy you are covered under
a) INDIVIDUAL b)CORPORATE
3. Please mention the type of insurance you are covered under
a)ACCIDENTAL b)HEALTH
c)LIFE d) ANY OTHER(Specify)
4. Is HDFC Insurance more affordable than the other Insurance available on
your nearest telecom shops?
(1) Strongly Agree (2) Agree (3) Disagree
(4) Strongly Disagree (5) Neutral
5. The various ranks given by the customers about their perception about
different players in the market:
Attributes Brands ICICI HDFC Met
life
Others
Cheap
Easy Availability
Quality
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