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INTRODUCTION

Insurance is an upcoming sector, in India the year 2000 was a landmark year for

life insurance industry, in this year the life insurance industry was liberalized after morethan fifty years.

Insurance sector was once a monopoly, with LIC as the only company, a public

sector enterprise. But nowadays the market opened up and there are many private players

competing in the market. There are fifteen private life insurance companies that have

entered the industry.

After the entry of these private players, the market share of LIC has been

considerably reduced. In the last five years the private players is able to expand the

market (growing at 30% per annum) and also has improved their market share to 18%.

For the past five years private players have launched many innovations in the

industry in terms of products, market channels and advertisement of products, agent

training and customer services etc.

The various life insurers entered India:-

1. HDFC Standard Life Insurance Company Ltd.

2. Reliance Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Company Ltd.

4. Kotak Mahindra Old Mutual Life Insurance Limited.

5. Birla Sun Life Insurance Company Ltd.

6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited.

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8. ING Vysya Life Insurance Company Private Limited.

9. Met life India Insurance Company Ltd.

10. Royal Sundaram Life Insurance Company Limited.

11. Aviva Life Insurance Co. India Pvt. Ltd.

12. Sahara India Insurance Company Ltd.

13. Shriram Life Insurance Company

14. Life Insurance Corporation of India.

15. Max New York Life Insurance Company Limited.

16. Bharti AXA Life Insurance Company Limited.

Through this project I want to study about the life insurance industry and also doing the

comparative analysis between two insurance players in this industry. They are,

a) Reliance Life Insurance Company Limited

b) HDFC Standard Life Insurance Company Limited

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OBJECTIVES

The entry of foreign MNC’s and the conductive business environment fostered bythe government, it is no wonder that the re-entry of private insurance has marked a

second coming for the sector. In just five years, the sector has undergone a makeover,

offering more choice, better services, quicker settlement, tighter regulation and greater

awareness ‘s the environment become more and more competitive and services and

products become alike, creating a differentiation is becoming extremely tough.

Thus, this project objectives is as follows

To know where Reliance Life Insurance Company limited & HDFC Standard Life

Insurance stands in the market.

Find out the strength and the weakness of their plans.

Making comparative analysis between the products of Reliance life insurance

Company limited with other life insurance companies especially HDFC Standard

Life Insurance Limited.

To know the preference of the customers for ULIPs over mutual funds.

To know People awareness of charge FMC in both ULIP and Mutual funds

Compare of investment in ULIP plans with Mutual Funds.

To study the investment patterns of the consumer in Financial Products.

To know the customer awareness about ULIPs and Mutual Funds.

Scope of the study:

This study can be conducted by comparing the performances & products of

private insurance players in insurance industry.

The number of respondents to be surveyed can be improved.

This study can be conducted to analyze the market stand of Reliance Life

Insurance Company limited and HDFC Standard Life Insurance Company

Limited.

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RESEARCH METHODOLOGY

Type of Research – Exploratory Research

Size of sample: 40 respondents

Area of research study: East Delhi

Sampling procedure: Convenient sampling

METHOD FOR DATA COLLECTION

Primary Data:

Procedure of data collection: Survey

Tools for data collection: Questionnaire

Secondary Data:

Information Brochures, Web Sites

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COMPANY PROFILE

RELIANCE LIFE INSURNCE COMPANY Ltd.

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of theReliance – Anil Dhirubhai Ambani Group. The company acquired 100 per centshareholding in AMP Sanmar Life Insurance Company in August 2005. Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio.

AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices across the country,9,000 agents, and more than 900 employees.

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of theReliance – Anil Dhirubhai Ambani Group (ADAG). Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions toindividuals and Corporate.

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interests in assetmanagement, life and general insurance, private equity and proprietary investments, stock broking and other financial services.

Whatever your career goal, Reliance Life Insurance is a company big enough for your dreams. We, along with the other businesses of Reliance Capital, enjoy a strong position

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in the financial services category. And this may be the place where you can have thecareer you always wanted.

RELIANCE LIFE INSURANCE

HISTORY

1966- Birth of reliance first textile mill at Naroda.

1971-72: Launch of only Vimal brand.

1977- Launch of first IPO for general public start at trend.

1985- Total asset cross 1000 cr.

1992- Twin IPOs receive 1 million applications.

1993- Sales cross 4000cr, becomes largest private sector co. in India.

1997- First corporate in Asia to issue 50 and 100 yrs bond in US debt market.

1998- Total asset cross 35000cr, revenues cross 14000cr.

2000- Group profit 2500cr, revenues 20000cr, and total assets 50000cr.

2000- Reliance communications plans announced.

2001- Group revenues cross 60,000cr, largest business group in India.2003- Controlling stake in BSES (Reliance Energy), largest mobile service in India.

2005-ADA group formed AMP Sanmar acquired and renamed Reliance Life Insurance

Corporation (RLIC)

2006-07: RLIC ranked 6th at 930 cr.

Sep 07- Became the 1st company to cross 1 million policy mark in 2 years of operations.

2007- RLIC became only the 2nd national insurance company to get ISO 9001-2000.

2007-08: RLIC jumps to 4th position with 2750cr.

2008- Crosses 2 million policies.2008- RELIANCE MUTUAL FUNDS becomes 1st Asset Management Company (AMC)

to cross 1,00,000cr.

2008- RELIANCE COMMUNICATIONS crosses 50 million customers.

2008-09: A total of more than 2000 branches on anvil in the fiscal year.

2009-2010: Profit of US$ 3.6 billion for the fiscal year ending in March 2010.

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HIERARCHY

Promoters: Mr. Anil Ambani & Tina Ambani

Group CEO: Mr. Sam Ghosh

CEO: Mr. Malay Ghosh

HOS: Mr. Manoranjan Sahoo

Zonal head (C.P.): Mr. Pankaj Gera

Regional Manager (C.P.): Mr. Sanjeev A. Bhardawaj

Branch Manager (C.P.): Mr. Honey Narang

Sr. Sales Manager: Mr. Nimit Verma

Fund manager: Mr. Madhusudan Kela

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ADAG GROUP

1) RELIANCE LIFE INSURANCE

2) RELIANCE COMMUNICATIONS

3) RELIANCE CAPITAL

4) RELIANCE INFRASTRUCTURE

5) RELIANCE POWER

6) RELINCE ENTERTAINMENT

7) RELIANCE HEALTH

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PRODUCT PROFILE

Product Details of Reliance Life Insurance

Products:-

Individual Plans

1 Reliance Wealth + Health Plan

2 Reliance Secure Child Plan

3 Reliance Automatic Investment Plan

4 Reliance Money Guarantee Plan

5 Reliance Endowment Plan

6 Reliance Special Endowment Plan

7 Reliance Term Plan

8 Reliance Whole Life Plan

9 Reliance Child Plan

10 Reliance Cash Flow Plan

11 Reliance Market Return Plan

12 Reliance Golden Years Plan

13 Reliance Golden Years Plan Value

14 Reliance Golden Years Plan Plus

15 Reliance Simple Term Plan

16 Reliance Special Term Plan

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17 Reliance Credit Guardian Plan

18 Reliance Connect 2 Life Plan

19 Employee Benefit Plans

20 Group Term Assurance Policy

21 Reliance EDLI Scheme

22 Reliance Group Gratuity Policy

23 Reliance Group Superannuation Policy

SWOT ANALYSIS

Strengths:

a. Dedicated Employees. b. Well Efficient Management.c. Technology.d. Diversification of funds.e. Strong and popular brand name.f. Adaptability to changes.

Weakness:

a. Lack of good services.

b. Lack of awareness about insurance among people.

c. Less coverage in Rural Areas.

Opportunities:

b. Fast growing economy.

c. Increasing per –capita income in India.

d. Saving behavior.

e. High growth of ULIP industry.

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Threats:

a. Arrival of new entrants in the insurance industry.

b. Cut throat competition within the industry

INDUSTRY PROFILE

The practice of insurance in the world is quite old infect. How ever, life insurance business, as it is known today, is a much later development. It evolved from the greattransformation in life, which began with the decline of the agrarian society in the westerncountries in the 19th century.

Industrialization with its cities, factories, cash economy and an urban ‘saving’

class set the stage for life insurance as a large – scale national institution. It can truly bethat life insurance is a product of modern industry. Growth of life insurance Company inany country will illustrate introduced modern life insurance business didn’t make muchheadway. The business started taking its deeper roots only when in the late 19 th century‘India’ insurance companies appeared on the scenes and started accepting ‘India’ liesfreely on the same terms as European lives in India. The growth of India life insurance business continued to remain restricted till the Swedish movement gathered momentum.The business passed through the period of ups and downs with the political and economicsituation in the country.

Need for Association

With the rise in the number of Indian life insurance companies occasioned by the growthin the national spirit as a result of the independent movement a need was felt by thecompanies for an organization to assist them in solving the problems faced by them. Witha view to meeting this need and also to providing a representative body for expression of a common viewpoint of Indian insurance before the government regarding insurancelegislation and Indian life Assurance offices association was established in 1928. Theassociation played companies’ forum for expression of representative views on insuranceand taxation legislation and imparting insurance education.

Nationalization

Even during days of the freedom struggle there was occasional demand for nationalization of life insurance industry. The demand naturally gathers mare momentumafter independence. Mismanagement had lead to liquidation of as many as 25 lifeinsurance companies in the decade after independence. Another 25 insurance companieshad during the same period so frittered away their resources that their business had to betransferred to other companies. All these cost financial losses and consequent suffering toseveral policyholders who had entrusted their hard earned saving to the care of the

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company management. This misuse of power, position and privilege by these companiesin the private sector was one of the most compelling reasons that influenced the decisionof the government of India to nationalize the life insurance industry in 1956. The lifeinsurance industry in India had to be geared up for raising resources for executionnational programs. One of the objectives of the national plans was to build a pay welfare

state. It was therefore, essential that benefits of life insurance were made available toevery family in the country and that the business should be conducted with utmosteconomy by the management acting in a spirit of trusteeship to enable maximization of the people’s saving that could be analyzed through the life insurance into thedevelopment programs.

Objectives of nationalization:

The decision of the Government of India to nationalize life insurance industry wasimplemented by the passage of the life insurance Corporation Act, 1956, by Parliament.The objectives of nationalization of life insurance industry that emerged out of the

discussion and speeches in the parliament in the time passage of the act were:Spread of message of life insurance as far and wide as possible reaching out beyond themore advanced urban areas well into hitherto neglected areas.

• Effective mobilization of the people’s savings.

• Complete security to policyholders.

• Prompt and efficient services to the policyholders.

• Conducting of the business with the utmost economy and with the full realizationthat the money. Belonged to the policyholders.

• Investment of funds in such a way as to secure maximum yield consistent withsafety of capital.

• Economic premium rates.

• Development of a dynamic and vigorous organization under a managementconducted in sprit of Trusteeship.

• Formulation of scheme of insurance to suit different section of the community.

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Brief History

The insurance sector in India dates back to 1818, when Oriental Life Insurance Companylike Bombay life Assurance Company, in 1823 and Tritons Insurance Company, for General Insurance, in 1850 were incorporated. Insurance ACT was passed in 1928 but itwas subsequently reviewed and comprehensive legislation was enacted in 1938.The nationalization of life insurance business took place in 1956 when 245 Indian andForeign insurance societies were first merged and then nationalized. It paved the waytowards the establishment of life insurance Corporation (LIC) and since then it hasenjoyed a monopoly over the life insurance business in India. General Insurance business.Subsequently in 1973, non-life insurance business was nationalized and the GeneralInsurance Business (Nationalization) ACT, 1972 was promulgated. The GeneralInsurance Corporation (GIC) in its present form was incorporated in 1972 and maintainsa very strong hold over the non-life insurance business in India. Due to concerns of relatively low spread of insurance in the country.

The efficient and quality functioning of the Public Sector Insurance Companies.The untapped potential for mobilizing long-term contractual savings funds for infrastructure.The (Congress) government set up Insurance set u an Insurance Reforms committee in

April 1993. The committee submitted its report in January 1994, recommended a phased program of liberalization, and called for private sector entry and restructuring of the LICand GIC.

Insurance is a Rs.400 billion business in India, and together with banking services addsabout 7% to India's Gap. Gross premium collection is about 2% of Gap and has beengrowing by 15-20% per annum. India also has the highest number of life insurance policies in force in the world, and total investible funds with the LIC are almost 8% of GDP. Yet more than three-fourths of India's insurable population has no life insurance or pension cover. Health insurance of any kind is negligible and other forms of non-lifeinsurance are much below international standards.

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REVIEW OF LITERATURE

The head of the family generally supports the family for their basic needs, such

as, food, clothing & shelter by bringing income at a regular interval. So long as he or she

lives & the income is received steady, the family is secure; but untimely death or

disability of the person puts the family in a very difficult situation, and sometimes in

stark poverty. Uncertainty of death is inherent in human life.

It is the uncertainty that is risk, which gives rise to the necessity for some form of

protection against the financial loss arising from death. Insurance substitutes this

uncertainty by certainty.

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CURRENT SCENARIO

Unfortunately the concept of insurance is not popular in our country .As per the latestestimates, the total premium income generated by life and general insurance in India isestimated at around a meager 1.95% of GDP. However India's share of world insurancemarket has shown an increase of 10% from 0.31% in 2004-2005 to 0.34% in 2005-2006India's market share in the life insurance business showed a real growth of 11 % therebyout performing the global average of 7.7% Non-life business grew by 3.1% against globalaverage of 0.20%. In India insurance spending per capita was among the lowest in theworld at $7.6 compared to $7 in the previous year. Amongst the emerging economies,India is one of the least insured countries but the potential for further growth is phenomenal, as a significant portion of its population is in services and the lifeexpectancy has also increased over the years.

Need for insurance:

Modern life insurance caters to multiple needs for insurance, which can be broadlyclassified as under:

• Cash and income needs on an immediately following death.

• Family income needs.

• Income needs of a widow on the death of her husband.

• Cash and income needs of a husband on the death of his wife.

• Retirement income needs.

• Education needs.

• Business needs

What is Human Life Value (HLV)?

Human life value is:-• Capitalized value of the net earnings

• Present value of the total income lost to the family in the event death.

These points will be more cleared with this example:-• Suppose an individual earns Rs. 10000/month.• The personal expense is Rs.2000/month• Therefore the income provided to his family is Rs. 8000/month.• The annual income provided to his family works out to Rs. 96000• Now if he were not to earn it for them , the family would have to

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Rs.1600000 in a bank so that they get Rs. 96000 yearly at 6% interest.(96000*100/6)

• Therefore the HLV of the person is Rs. 16, 00,000.

Ps. Note that we have not taken into account the future income growth of the person.

Hence this is not the exact human life value but only a representation to give thecustomer a fair idea of how it works.

What is a contract of insurance?

A contract of insurance is a contract of utmost good faith, technically known as uberrimafides. The doctrine of disclosing all material facts is embodied in this important principalthat applies to all forms of insurance. The purpose, who is one of the parties to thecontract, is presumed to have means of knowledge that are not accessible to thecorporation who is the other party to the contract. Therefore, the purpose is bound to tellthe insurer everything affecting the judgment of the insurer. In all the contracts of

insurance the proposes is bound to make full disclosure of all material facts and notmerely, those which he thinks material Misrepresentation non-disclosure or fraud in anydocument leading to the acceptance of the risk automatically discharges the corporationfrom all liability under the contract. Although Section 45 of the Insurance Act, 1938 provides that no policy can be called in question after a period of two years from the dateof its issue on the ground that any statement in proposal or a related document was falseor inaccurate (making the policy indisputable), This provision is not applicable if thecorporation can prove that misrepresentation or non- disclosure was on a material factand was fraudulently made and that the policyholder knew at the time that statement hemade was false. It is, therefore, in the interest of the would be policyholder to disclose allthe material facts to the corporation to avoid any complication when the claim arises. It is

equally obligatory on an agent to see that the assured doesn't obtain the contract by meansof untrue representation or concealment in any respect. It is the duty that the agent owes both to his client and to the corporation.

Classification of insurance business:

The insurance is broadly classified as:1 .Life insurance business2. Non-life insurance business Life insurance business:

It is the business of effecting contracts of insurances upon human life including anycontract whereby the payment of money is assured on death or on the happening of anycontingency to the dependent on human life and any contract which is subject to the payment of premiums for a term and shall be deemed to include:The granting disability and double and triple indemnity accident benefits, if so providedin the contract of insurance.

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The granting of annuities of human life. The granting of super-annuation allowance andannuities payable out of any fund applicable solely to the relief and maintenance of the person engaged or who have been engaged in any particular profession, trade or employment or of the dependents of such persons.

Non life insurance business:

Conventional classification of insurance business:1. Fire insurance2. Marine insurance3. Miscellaneous insurance (accident)

Modern classification of general insurance1. Insurance of person

2. Insurance of property3. Insurance of interest4. Insurance of liability

ROLE OF INSURANCE REGULATORY AND DEVLOPMENT AUTHORITY

(IRDA) ACT, 1999

An act to provide for the establishment of an authority to protect the interests of policyholders, to regulate, to promote and ensure orderly growth of the insurance industryand for matters connected therewith for incidental thereto and further to amend, the LifeInsurance Corporation Act, 1956 and the insurance Act, 1938 and General Insurance

Business Act 1972.Spread Life Insurance much more widely and in particular to the rural areas and to thesocially and economically backward classes with a view to reaching all insurable personsin .the country and providing them adequate financial cover against death at a reasonableCost.Maximize mobilization of people's savings by making insurance linked savingsadequately attractive.Bear in mind, in the investment of funds, the primary obligation to its policyholders,whose money it holds in trust, without losing sight of the interest of the; community as awhole; the funds to be deployed to the best advantage of the investors as well as thecommunity as a whole, keeping in view national priorities and obligations of attractive

return.Conduct business with utmost economy and with the full realization that the moneys belong to: the policyholders.Act as trustees of the insured public in their individual and collective capacities.Meet the various life insurance needs of the community that would arise in the changingsocial and economic environment.Involve all people working in the Corporation to the best of their capability in furtheringthe interests of the insured public by providing efficient service with courtesy.

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Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with ded1cat1on towardsachievement of Corporate Objective.

The Insurance Players…

– HDFC Standard Life Insurance Company Limited – Birla Sun Life Insurance Company Limited – RELIANCE LIFE Life Insurance Company Limited – Max New York Life Insurance Company Limited – Kotak Mahindra Old Mutual Life Insurance Limited – SBI – Cardiff Life Insurance Company Limited – ING Vysya Life Insurance Company Limited – Bajaj Allianz Life Insurance Company Limited – ICICI Prudential Life Insurance Company Limited – MetLife Life Insurance Company Limited – Aviva Life Insurance Company Limited – Reliance Life Insurance Company Limited – Sahara India Life Insurance Limited – Shriram Life Insurance Company Limited

Types of Plan…..

•

Conventional• ULIP

Conventional:-

Conventional plans are those plans in which returns are known and are fixed. Example: -Children’s Plan. In this plan the customer has knows how much return he will get after maturity or any miss happening occurs. Here risk is low and returns are also low, becauseit is not dependent on the market risk and is a rigid policy.

It is seen that people also invest less in such type of policies as returns are lessand there is a compulsion attached is of compulsory premium submission till the policy

matures.Illustration: -Premium for 10 yrs is 2000020000+20000+20000+20000+20000+20000+20000+20000+20000+20000= 2lksReturn described was 2.5 timesSo the customer will get approx 5 lkhs after deducting all charges.

Insurance is always of the parent and beneficiary is the child. There are 2 types of loss that occurs on any type of miss happening i.e. emotional loss and monetary loss

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company can’t full fill emotional loss but can help in monetary loss by giving the 2lksRs. At the miss happening and will give the rest premium by its own and will give the bonus at maturity again to the child.

INTRODUCTION

ULIP

ULIP stands for UNIT LINK INSURANCE PLAN. As it is said higher risk higher return.

Unit-linked insurance plans, ULIPs, are distinct from the more familiar ‘with profits’ policies sold for decades by the Life Insurance Corporation.

‘With profits’ policies are called so because investment gains (profits) are distributed to policyholders in the form of a bonus announced every year.

ULIPs also serve the same function of providing insurance protection against death and provision of long-term savings, but they are structured differently.

In ‘with profits’ policies, the insurance company credits the premium to a common poolcalled the ‘life fund,’ after setting aside funds for the risk premium on life insurance andmanagement expenses.

Every year, the insurer calculates how much has to be paid to settle death and maturityclaims. The surplus in the life fund left after meeting these liabilities is credited to policyholders’ accounts in the form of a bonus.

In a ULIP too, the insurer deducts charges towards life insurance (mortality charges),administration charges and fund management charges.

The rest of the premium is used to invest in a fund that invests money in stocks or bonds.

The policyholder’s share in the fund is represented by the number of units.

The value of the unit is determined by the total value of all the investments made by thefund divided by the number of units.

If the insurance company offers a range of funds, the insured can direct the company toinvest in the fund of his choice. Insurers usually offer three choices — an equity (growth)fund, balanced fund and a fund which invests in bonds.

In both ‘with profits’ policies as well as unit-linked policies, a large part of the first year

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premium goes towards paying the agents’ commissions.

The two strong arguments in favour of unit-linked plans are that — the investor knowsexactly what is happening to his money and two, it allows the investor to choose theassets into which he wants his funds invested.

A traditional ‘with profits,’ on the other hand, is a black box and a policyholder has littleknowledge of what is happening. An investor in a ULIP knows how much he is payingtowards mortality, management and administration charges.

He also knows where the insurance company has invested the money. The investor getsexactly the same returns that the fund earns, but he also bears the investment risk.

The transparency makes the product more competitive. So if you are willing to bear theinvestment risks in order to generate a higher return on your retirement funds, ULIPs arefor you.

Traditional ‘with profits’ policies too invest in the market and generate the same returns prevailing in the market. But here the insurance company evens out returns to ensure that policyholders do not lose money in a bad year. In that sense they are safer.

ULIPs also offer flexibility. For instance, a policyholder can ask the insurance companyto liquidate units in his account to meet the mortality charges if he is unable to pay any premium instalment.

This eats into his savings, but ensures that the policy will continue to cover his life.

In structure, yes; in objective, no. Because of the high first-year charges, mutual funds area better option if you have a five-year horizon.

But if you have a horizon of 10 years or more, then ULIPs have an edge. To explain thisfurther a ULIP has high first-year charges towards acquisition (including agents’commissions).

As a result, they find it difficult to outperform mutual funds in the first five years. But inthe long-term, ULIP managers have several advantages over mutual fund managers.

Since policyholder premiums come at regular intervals, investments can be planned out

more evenly.

Mutual fund managers cannot take a similar long-term view because they have bulk investors who can move money in and out of schemes at short notice.

Insurers love ULIPs for several reasons. Most important of all, insurers can sell these policies with less capital of their own than what would be required if they sold traditional policies.

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In traditional ‘with profits’ policies, the insurance company bears the investment risk tothe extent of the assured amount. In ULIPs, the policyholder bears most of the investmentrisk. Since ULIPs are devised to mobilize savings, they give insurance companies anopportunity to get a large chunk of the asset management business, which has beentraditionally dominated by mutual funds.

FEATURES OF ULIPs

a) Equity investment

b) Life cover

c) Tax benefit 80(c),80(10)(10)d

d) Switches

e) Premium redirection

f) Settlement option

g) Exchange option

h) Partial withdrawal

i) Top-ups

j) Various funds

k) Riders

RIDERS

1) Critical Illness Rider (CIR ) - sum assured less than or equal to Basic plan.2) Total Permanent Disability Rider (TPDR ) - sum assured after 6 months of

intimation.3) Accidental Death Benefit (ADB) - sum assured twice of the 5 times the

premium paid.4) Basic Term Plan (BTR ) - sum assured twice of the 5 times the premium

paid.

LIMITATIONS OF RIDERS

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1) Rider benefit starts at the completion of 18 years.2) Sum assured of the riders can’t be more than the sum assured of the basic

plan.3) Premiums paid towards all the riders can’t be more than 30% o the

premium of basic policy.

RELIANCE SUPER AUTOMATIC INVESTMENT PLAN

READY MADE PLAN- FUND OPTION

Fund

NameInvestment Objectives

Asset

Category

Asset

Allocation

Range (%)

Target

(%)

Fund A

High real rate of return in

The long term through

High exposure to equity

investments

Money Marketinstruments

0 – 40 0

Debt Securities

Such as gilts,

Corporate debt

excluding

Money market

instruments.

0 – 100 20

Equities 0 – 80 80

What needs to be stressed – the age band of 0-40…this is ideal for someone who

wants to build a corpus (e.g. – for his child by the time he reaches the vesting age

and needs the money for higher education etc….) The earlier one starts, the better

time horizon available for generating the returns. High equity exposure would help

generate better returns – HIGH RISK HIGH RETURNS

Ensures safety of investments as your risk appetite reduces with increasing age

Three prepackaged funds available as per age bands

Fund switch is automatic as you move from one age band to another

With growing age equity exposure is reduced Flexibility to switch to Tailor Made Plan option

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Fund

NameInvestment Objectives

Asset

Category

Asset

Allocation

Range (%)

Target

(%)

Fund B

Significantly higher

returns

In the long term, through

High exposure to equityinvestments.

Money Market

instruments0 – 40 0

Debt Securities

such as gilts,

corporate debtexcluding Money

Market

instruments.

0 – 100 50

Equities 0 - 50 50

What needs to be stressed – the age band of 41-60…this is ideal for someone who

wants to consolidate the investments. At this stage in life the person may not like to

take high risk, as he has many liabilities and forthcoming expenses (e.g. higher

education of children, children’s marriage, outstanding loans etc.) Moderate equity

exposure would help generate stable returns – MEDIUM RISK MEDIUM

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RETURNS

Fund Name Investment ObjectivesAsset

Category

Asset

Allocation

Range (%)

Target

(%)

Fund C

Returns that exceed the

Rate of inflation in thelong term while

maintaining moderate

probability of negative

Returns in the short term.

Money Market

instruments0 – 40 0

Debt SecuritiesSuch as gilts,

Corporate debt

excluding

money market

instruments.

0 – 100 80

Equities 0 - 20 20

What needs to be stressed – the age band of 61 and above… At this stage in life the

person may not like to take any risk with his investments, as at this stage of life he

has to survive on the income from investments– LOW RISK LOW RETURNS

Decide your own fund mix with this option

Full flexibility to decide your asset mix depending on your risk appetite

Offers 8 funds

Allocate your premium in all or any one fund in ANY proportion*

Take 100% equity to maximize returns or diversify your basket

52 free switches in a year Flexibility to switch to Ready Made Plan option

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Tailor Made Option

INITIAL ALLOCATION NEW ALLOCATION

Equity (25%)

Corporate

Bond (30%)

Gilt (25%)

Money Market(20%)

Gilt (50%)

Flexibility to switch between the two plan options 52 times a

Equity (50%)

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Flexibility to choose from the wide Fund Options like:

Equity Fund

Corporate Bond Fund

Money Market Fund

Gilt Fund

Infrastructure Fund

Energy Fund

Mid Cap Fund

Pure Equity Fund

Customers can take benefit under existing plan and use it to purchase

specified Unit Linked Plan from Reliance.

This option must be exercised at least 30 days before the receipt of benefit

under the policy.

The Key Advantage - Reduced allocation charges in the first year.

The Two Options

Exchange from Reliance Automatic Investment Plan into Reliance

Money Guarantee Plan

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Exchange into Reliance Automatic Investment Plan from Reliance

Money Guarantee Plan

CHARGES APPLICABLE

Allocation charge

Premium grid

(Rs. 000)

Reliance Super Auto Invest Plan

Year 1

10 to 20 30%

20 to 25 25%

25 to 50 22.5%

50 to 150 20%

150 to 1500 17.5%

1500 to 2500 15%

2500 & above 10%

Year 2 5%Year 3 5%

Year 4 + 5%

Top-up 2%

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RELIANCE MONEY GUARANTEE PLAN

1. Basic Plan Features

a. Policy Limits

b. Premium Modes

c. Life Cover Benefit

d. Maturity benefit

e. Sum Assured

f. Surrender Value

2. Key Benefits

a. Capital Guarantee

b. Return Shield

c. Exchange

3. Other Benefits

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a. Fund Options

b. Riders

c. Tax Benefits

4. Unmatched Flexibility

a. Top Upb. Partial Withdrawal

c. Switching

d. Premium Redirection

e. Settlement Option

f. Premium Payment Option

5. Charge Structure

a. Allocation Charges

b. Other Charges

6. Summary Snapshot

Basic Plan Minimum Maximum

Age at Entry 30 days 55 years last birthdayAge at Maturity 18 years last birthday 80 years last birthday

Policy Term 10 years 30 years

Mode Minimum Premium

(Rs.)

Yearly 10,000

Half Yearly 5,000

Quarterly 2,500Monthly 1,000

Top-up 2,500

MATURITY BENEFIT

29



Higher of

- Fund Value as on the date of maturity, under Basic Planor

- Premiums paid under Base Plan up the date of maturity excluding any extra or additional premiums.

Plus

Higher of

- Fund Value as on the date of maturity, under Top-Upor

- Amount of Top-up premiums paid

FULL SURRENDER VALUE UNDER BASIC PLAN

You may surrender your policy at any time after three years from commencement.

The surrender value will be the Fund Value including Return Shield Fund (if selected as on the date of intimation of surrender under basic plan) less surrender charge.

On surrender of Basic Plan, any attached top-ups will also be surrendered.

No partial surrender value is available under Basic plan.

Year of surrender of Basic

Plan

Surrender Charge as a

percentage

of fund value

1 to 3 Not allowed

4 5%5 3%

6 onwards Nil

Return Shield Option – An Innovative Way to Protect Your Returns

What is the Return Shield Option?

Returns earned on basic plan and Top-Ups during a policy month are transferred

to a Fund called Return Shield Fund at the end of each policy month. This fundinvests in low risk debt instruments providing steady investment returns.

This option is available during the term of the policy.

It can be selected or deleted at any time.

30



What are the charges for using this option?

No charge if:• The option is selected under basic plan on commencement of the plan• The option is selected under top-up premium at the time of payment of

top-up premium Under all other circumstances, a fixed charge of Rs.100 is payable every time the

option is selected.

This charge will be collected at the time of transaction by canceling the units at prevailing unit price.

Profile

The Housing Development Finance Corporation Limited (HDFC) was amongst the firstto receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking

31



Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operationsas a Scheduled Commercial Bank in January 1995.

Capital Structure

The authorized capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paid-upcapital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank'sequity and about 19.4% of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held by Foreign Institutional Investors (FIIs) and the bank has about 190,000 shareholders.The shares are listed on. The Stock Exchange, Mumbai and the National Stock Exchange.The bank's American Depository Shares are listed on the New York Stock Exchange(NYSE) under the symbol "HDB".

HDFC Standard Life Insurance Co.

History:

HDFC Standard Life Insurance Co. Ltd was incorporated on 14th august 2000. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.)India and UK based Standard Life Company. Both the joint venture partners being one of the leaders in their respective areas came together in this 81.4:18.6 joint venture to formHDFC Standard Life Insurance Company Limited.

The MD and CEO of HDFC Standard Life Mr. Deepak Satwalekar, has given thecompany new directions and has helped the company achieve the status it currentlyenjoys. HDFC Standard Life brings to you a whole range of insurance solutions be itgroup or individual or NAV services for corporations, they can be easily customized as per specific needs.

The Bancassurance partners of HDFC Standard Life Insurance Co Ltd are HDFC, HDFCBank India Limited, Union Bank of India, Indian Bank, Bank of Baroda, Saraswat Bank and Bajaj Capital.

Concept of Unit Linked……

Unit Linked Policies are unbundled

Unit link polices are separate identification of part investment element, expenseadministration charges and benefit charges shown separately.

32



Unit Linked Policies make use of Unit linked funds

Investment housed in funds divided in units’ client has choice of funds.

Unit Linked Policies are linked

Value of policy linked to net assets investment risk and rewards transferred from the

insurer to the client.

Unit Linked Policies have explicit charges

It is the consequence of unbundling. Charges can be subjected to be changed however mortality remains unchanged during the tenure of policy.

ULIP of HDFC

• ULIP with insurance

• ULIP as pure investment

ULIP with insurance

Unit link young star plus II

As a parent, priority is children’s future and being able to meet their dreams andaspiration. Today, providing a good education, establishing a professional career or evena modest wedding is expensive. Costs are increasing fast. Just imagine how much you

will need when your children take these important steps in life.HDSFC SL Unit Link Young Star Plus II provides a medium through a parent can

help there children in building up a secured financial future.

Steps to own a plan

Step 1: this is the premium which will continue to pay each year oh the policy. The minregular premium is Rs.12000 per year. Which can be paid yearly, monthly,quarterly or half yearly?

Step 2: sum assured minimum 5 times and maximum 40 times.Step 3: can choose double or triple benefit.

In case of unfortunate demises during the policy termDouble Benefit Company will pay 100% of the entire future regular premiums. And sum assured will be given to the beneficiaryTriple Benefit Company will give 50%of the premium to the beneficiary and 50%as regular premium. And the sum assured will be given to the beneficiary.

Surrender

In the first five years.

33



Surrender is not possible, after 5 years surrender value will be the value of unitsof the plan, there is no surrender charge after 5years.

Charges

Fund management charge (FMC)HDFC SL enjoys the lowest FMC rates across the industry i.e. 1.25% of fund value.

Allocation charge

1st year 60%2nd year and onward 1%

Allocation how ever increases with increase in premium size thus giving better returns toHNI (high network individual).

Policy administration charge:

60rs per month

All charges other than allocation are being charged on daily basis on the cancellation of units.

Tax benefits (based on current tax-law)

You will be eligible for tax benefits under section 80ccc of the income tax act, 1961.Under Section 80ccc, you can save up to 33,990 from the tax every year.(calculated onthe highest tax bracket) as premium up to a maximum of Rs. 1, 00,000 are allowed as adeduction from your taxable income.

The above –mentioned tax benefits are subject to change in tax law.

ULIP as pure investment

To maximize investment returns. HDFC invest the premium of the customer in thechosen fund in the proportion that he/she specifies. At the end of the policy term, he /shewill revive the accumulated value of the fund, which will provide pension income.

In the event of unfortunate demises during the policy term, nominee will receive acash lump sum to help him or her manage the retirement years.

All insurance plans are subjected to different risk factors.

Steps to own plan

34



Step 1 Choose the retirement age

Step 2 Choose the premium wish to invest based on retirement needs

Step 3 Choose the investment fund or funds he/she desire

Step 1: select any age between 50 years and 75 years.Step 2: this is the premium which will continue to pay each year oh the policy. The min

regular premium is Rs.10000 per year. Which can be paid yearly, monthly,quarterly or half yearly?

Investor can opt for combination of 6 funds or 1 fund depending upon the need of investor and his ability to take risk.

Accessing Customers Money:

a) On vestingPolicy matures at the end of the policy term customer have chosen and on chosenretirement date, he will get the value of units in policy as per prevailing Govt.regulations

• He/She can take 1/3 if the funds value as a tax-free cash lump sum andrest must be converted to an annuity.

• He/She can but the annuity from the company or any other insurer.

• Customer is allowed to alter vesting date subject to above age at vesting

and policy term limits. b) On death

In case of unfortunate demises before the end of policy term, nominee will receivethe unit fund value, policy will terminate there after.

c) On surrender In the first three years.Surrender is not possible, after 3 years surrender value will be the value of unitsof the plan, there is no surrender charge after 3 years.

Charges

Fund management charge (FMC)

HDFC SL enjoys the lowest FMC rates across the industry i.e. .8% of fund value.

Allocation charge

1st year 25%2nd year 25%3rd and onward 1%

35



Allocation how ever increases with increase in premium size thus giving better returns toHNI (high network individual).

Policy administration charge:

20rs per month

All charges other than allocation are being charged on daily basis on the cancellation of units.

Tax benefits (based on current tax-law)

You will be eligible for tax benefits under section 80ccc of the income tax act, 1961.Under Section 80ccc, you can save up to 33,990 from the tax every year.(calculated onthe highest tax bracket) as premium up to a maximum of rs. 1, 00,000 are allowed as adeduction from your taxable income.The above –mentioned tax benefits are subject to change in tax law.

FMC a small but handy tool

FMC stands for Fund Management Charges. This is the tool which is vibrantly used bythe company to take charges. FMC is applied on the fund while calculating NAV. Themaximum FMC in any fund is 2% p.a. subject pot prior approval by the IRDA. Generally people are unaware if this charge. It seems to be very small charge but in reality it’s a

charge which makes the difference between 2 policies. HDFC is the company whichcharges lowest FMC i.e. 0.8% which is generally higher with other companies near about2%. The effect of FMC can be seen in long term but has a minute effect in short term.Foe illustration:-

at 2%Fmc

At 0.8%Fmc

Yearspremium others HDFC

1 50000 1000 400

2 50000 1000 400

3 50000 1000 400

4 50000 1000 400

5 50000 1000 400

6 50000 1000 400

7 50000 1000 400

8 50000 1000 400

9 50000 1000 400

10 50000 1000 400

11 50000 1000 400

36



12 50000 1000 400

13 50000 1000 400

14 50000 1000 400

15 50000 1000 400

Sum of HDFC FMC 6000Sum of others FMC 15000

Difference 9000

INTRODUCTION TO MUTUAL FUND

The mutual fund industry is a lot like the film star of the finance

business. Though it is perhaps the smallest segment of the industry, it is also the most

glamorous – in that it is a young industry where there are changes in the rules of the game

everyday, and there are constant shifts and upheavals. The one investment vehicle that

has truly come of age in India in the past decade is mutual funds. Today, the mutual fund

industry in the country manages around Rs 100,000 crore of assets, a large part of which

comes from retail investors.

A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus collected is invested by

the fund manager in different types of securities depending upon the objective of the

37



scheme. These could range from shares to debentures to money market instruments. The

income earned through these investments and the capital appreciations realized by the

scheme are shared by its unit holders in proportion to the number of units owned by them

(pro rata). Each Mutual Fund scheme has a defined investment objective and strategy.

A mutual fund is the ideal investment vehicle for today’s complex and modern financial

scenario. Markets for equity shares, bonds and other fixed income instruments, real

estate, derivatives and other assets have become mature and information driven. Price

changes in these assets are driven by global events occurring in faraway places. A typical

individual is unlikely to have the knowledge, skills, inclination and time to keep track of

events, understand their implications and act speedily. An individual also finds it difficult

to keep track of ownership of his assets, investments, brokerage dues and bank

transactions etc.

A mutual fund is the answer to all these situations. It appoints professionally qualified

and experienced staff that manages each of these functions on a full time basis. The large

pool of money collected in the fund allows it to hire such staff at a very low cost to each

investor. In effect, the mutual fund vehicle exploits economies of scale in all three areas -

research, investments and transaction processing.

But every coin has a flip side. With mutual funds, you have no control on the investmentsof the fund; and, more importantly, the downside of diversification is that a fund can hold

so many stocks that a tremendously great performance by a stock will make very little

difference to a fund's overall performance.

Now if you think that the world of Mutual Funds is intimidating, complicated and

definitely not for you then think once again.

Mutual Funds – Concept

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is then invested in capital

market instruments such as shares, debentures and other securities. The income earned

38



through these investments and the capital appreciations realized are shared by its unit

holders in proportion to the number of units owned by them. Thus a Mutual Fund is the

most suitable investment for the common man as it offers an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost. The flowchart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart

Fig –1

Net asset value (NAV) of a scheme

Net asset value denotes the performance of a particular scheme of a

mutual fund. Mutual funds invest the money collected from the investors in securitiesmarkets. In simple terms, NAV is the market value of the securities held by the scheme.

Since market value of securities changes every day, NAV of a scheme also varies on a

day-to-day basis. The NAV per unit is the market value of securities of a scheme divided

by the total number of units of the scheme on any particular date.

39



For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs

and the mutual fund has issued 10 lakh units of Rs 10 each to the investors, then the NAV

per unit of the fund is Rs 20. NAV is required to be disclosed by the mutual funds on a

regular basis - daily or weekly - depending on the type of scheme.

The intelligent investor's seven rules

It’s one thing to understand mutual funds and their working; it’s another to ride on this

potent investment vehicle to create wealth in tune with your risk profile and investment

needs. Here are seven must-dos that go a long way in helping you meet your investment

objectives.

1. Know your risk profile

2. Identify your investment horizon

3. Read the offer document carefully

4. Go through the fund fact sheet

5. Diversify across fund houses

6. Do not chase incentives

7. Track your investments

Types of Mutual Fund

40



Fig –2

Mutual fund schemes may be classified on the basis of its structure and its

investment objective:-

1. by Structure:

a) Open-ended Funds

An open-end fund is one that is available for subscription all through the year. These do

not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset

Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

b) Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15

years. The fund is open for subscription only during a specified period. Investors can

invest in the scheme at the time of the initial public issue and thereafter they can buy or

sell the units of the scheme on the stock exchanges where they are listed.

c) Interval Funds

41



Interval funds combine the features of open-ended and close-ended schemes. They are

open for sale or redemption during pre-determined intervals at NAV related prices.

2. by Investment Objective:

a) Equity Oriented Schemes

These schemes, also commonly called Growth Schemes, seek to invest a majority of their

funds in equities and a small portion in money market instruments. Such schemes have

the potential to deliver superior returns over the long term. However, because they invest

in equities, these schemes are exposed to fluctuations in value especially in the short

term.

Fig – 3

Fig –4

b) Debt Based Schemes

42



These schemes, also commonly called Income Schemes, invest in debt securities such as

corporate bonds, debentures and government securities. The prices of these schemes tend

to be more stable compared with equity schemes and most of the returns to the investors

are generated through dividends or steady capital appreciation. These schemes are idealfor conservative investors or those not in a position to take higher equity risks, such as

retired individuals. However, as compared to the money market schemes they do have a

higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk.

Fig – 5

Fig –6

c) Hybrid Schemes

43



These schemes are commonly known as balanced schemes. These schemes invest in both

equities as well as debt. By investing in a mix of this nature, balanced schemes seek to

attain the objective of income and moderate capital appreciation and are ideal for

investors with a conservative, long-term orientation. HDFC Balanced Fund and HDFCChildren’s Gift Fund are examples of hybrid scheme

d) Load Funds

A Load Fund is one that charges a commission for entry or exit. That is, each time you

buy or sell units in the fund, a commission will be payable. Typically entry and exit loads

range from 1% to 2%. It could be worth paying the load, if the fund has a good

performance history.

e) No-Load Funds

A No-Load Fund is one that does not charge a commission for entry or exit. That is, no

commission is payable on purchase or sale of units in the fund. The advantage of a no

load fund is that the entire corpus is put to work.

Benefits Of Investing In Mutual Funds

1. Professional Management

Mutual Funds provide the services of experienced and skilled professionals, backed by a

dedicated investment research team that analyses the performance and prospects of

companies and selects suitable investments to achieve the objectives of the scheme.

2.Diversification

Mutual Funds invest in a number of companies across a broad cross-section of industries

and sectors. This diversification reduces the risk because seldom do all stocks decline at

the same time and in the same proportion. You achieve this diversification through a

Mutual Fund with far less money than you can do on your own.

44



3. Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such

as bad deliveries, delayed payments and follow up with brokers and companies. Mutual

Funds save your time and make investing easy and convenient.

4. Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return

as they invest in a diversified basket of selected securities.

5. Low Costs

Mutual Funds are a relatively less expensive way to invest compared to directly investing

in the capital markets because the benefits of scale in brokerage, custodial and other fees

translate into lower costs for investors.

6. Liquidity

In open-end schemes, the investor gets the money back promptly at net asset value

related prices from the Mutual Fund. In closed-end schemes, the units can be sold on astock exchange at the prevailing market price or the investor can avail of the facility of

direct repurchase at NAV related prices by the Mutual Fund.

7.Transparency

you get regular information on the value of your investment in addition to disclosure on

the specific investments made by your scheme, the proportion invested in each class of

assets and the fund manager's investment strategy and outlook.

8. Tax Benefits

The taxman has, over the years, been more or less kind to mutual funds! With laws

varying from time to time, the overall objective has been to encourage the growth of the

45



mutual funds industry. Currently, a variety of tax laws apply to mutual funds, which are

broadly listed below:

1) Capital Gains

Units of mutual fund schemes held for a period more than 12 months are treated as long-

term capital assets. In such cases, the unit-holder has the option to pay capital gains tax at

either 20 % (with indexation) or 10 % without indexation.

2) Tax Deducted at Source (TDS)

For any income credited or paid by a fund, no tax is deducted or withheld at source. The

relevant sections in the Income Tax Act governing this provision are Section 194K and

196A.

3) Wealth Tax

Mutual fund units are not currently treated as assets under Section 2 of the Wealth Tax

Act and are therefore not liable to tax.

4) Income from units

Any income received from units of the schemes of a mutual fund specified under section

23 (D) is exempt under Section 10 (33) of the Act.

5) Income Distribution Tax

As per prevailing tax laws, income distributed by schemes other than open-end equity

schemes is subject to tax at 20 % (plus surcharge of 10 %).

6) Section 80-C

The investment in mutual funds designated as Equity Linked Laving Scheme (ELSS)

qualifies for rebate under Section 80-C.

Disadvantages of Mutual Funds

46



1. The Wisdom of Professional Management.

2. No Control.

3. Dilution.

4. Buried Costs .

47



DATA ANALYSIS

Analysis:

Q.Which medium helps u in making investment decisions?

Frequency Percent Valid PercentCumulative

Percent

Valid Journal 4 4.0 4.0 4.0

reference group 20 20.0 20.0 24.0

Television 4 4.0 4.0 28.0

Newspaper 2 2.0 2.0 30.0

Broker 65 65.0 65.0 95.0

Influencer 5 5.0 5.0 100.0

Total 100 100.0 100.0

influencer

broker

newspaper

television

refrence group

journal

helps u in making investment decisions

Inference: Most of the investors are influenced by Brokers to invest.

48



Do you like to invest your funds in same company again?


Percent

Valid Always 15 15.0 15.0 15.0

Sometimes 20 20.0 20.0 35.0

Often 25 25.0 25.0 60.0

Never 40 40.0 40.0 100.0

Total 100 100.0 100.0

never

often

sometimes

always

Do you like to invest your funds in same company again?

Inference: Most of the respondents do not invest in the same company again, they prefer another company.

49



Q. Which company is best among life insurance companies?


Percent

Valid Hdfc 22 22.0 22.0 22.0

Aviva 10 10.0 10.0 32.0

Icici 30 30.0 30.0 62.0

Bajaj 6 6.0 6.0 68.0

Birla 20 20.0 20.0 88.0

reliance 12 12.0 12.0 100.0

Total 100 100.0 100.0

50

Reliance

birla

bajaj

icici

aviva

hdfc



Inference: It’s showing the market share of different insurance companies.

Are you aware about ULIP plans of life insurance companies?


Percent

Valid Yes 58 58.0 58.0 58.0

No 42 42.0 42.0 100.0

Total 100 100.0 100.0

51



no

yes

Are you aware about ULIP plans of life insurance companies?

Inference: More than 50% of respondents are aware of unit linked insurance plan.

. Q. Are you aware about Mutual Funds?


Percent

Valid Yes 78 78.0 78.0 78.0

No 22 22.0 22.0 100.0

Total 100 100.0 100.0

52



no

yes

Have you ever invested your funds in Mutual Funds?

Inference: Around 80% of respondents are aware of Mutual Funds.

Q. Are you aware of the charge FMC?


Percent

Valid Yes 23 23.0 23.0 23.0

No 77 77.0 77.0 100.0

Total 100 100.0 100.0

53



no

yes

Are you aware of the charge FMC?

Inference: Only 23% of respondents are aware of fund management charges.

Do you know FMC is charged under mutual funds?


Percent

Valid Yes 16 16.0 16.0 16.0

No 84 84.0 84.0 100.0

Total 100 100.0 100.0

54



no

yes

Do you know FMC is charged under mutual funds?

Inference: More than 80% of people are not aware of FMC under Mutual Fund.

55



marital status

singlemarried

C o u n t

40

30

20

10

0

Bar Chart

no

yes

Have you ever investedyour funds in ULIP?

Marital status * Have you ever invested your funds in Mutual Funds? Cross tabulation

Count

Have you ever investedyour funds in Mutual

Funds? Total

Yes no yes

maritalstatus

Married 45 17 62

single 24 14 38Total 69 31 100

Null Hypothesis: There is no relationship between marital status andinvestment in MUTUAL FUNDS

56



DATA REPRESENTATION

0

5

10

15

20

25

Reliance HDFC ICICI

LIMITATIONS

1. The sample size is very less, hence the responses of just 100 respondents does notimply for the complete population.

2. There was lack of time and resources that prevented from carrying out an in depthstudy.

3. The findings of the survey are based on the subjective opinion of the respondents andthere is no way of assessing truth of the statements.

4. There is some respondent’s bias which cannot be removed.

5. Lastly, some amount of error exists in the data filling process because of the followingreasons:

Influence of others.

Misunderstanding of the concept.

Hurried filling of the questionnaire.

CONCLUSION

57



The ULIP plans of Reliance are very competitive and have an edge over the plans of other companies as they provide higher returns to there customers.

ULIP plans are beneficial from the long term perspective whereas customer should invest

in mutual funds if he wants quick returns.

Most of the market is still unaware about the ULIP plans and hence by making proper promotional strategy companies can increase there sales.

RECOMMENDATIONS

Variety-based Positioning

This type of positioning is based on varieties in products and services rather than

customer segments. It is a sensible strategy for those companies who have distinctiveadvantages or strengths in offering certain products and services. In the insuranceindustry too, it is possible to achieve a unique position by focusing on certain category of products.

RELIANCE can provide certain distinct services to its customers (such as: providing theinformation to the clients about there policies over the internet etc.) which willdifferentiate them from other companies

Needs-based Positioning

This is based on the differing needs of different groups of consumers. This can be donesuccessfully if a company has unique strengths to service a group of customer needs better than othersThe insurance needs of customers vary significantly for different groups of customers.However, in India most of the life insurance companies have a wide variety of productstailored for different customer needs and there is no company focusing on a particular customer need.

An example would be a life insurance company that focuses only on High Net-worthIndividuals (HNIs). The needs of HNIs would be quite different from those of a generalconsumer and would require an entirely different marketing mix right from the type of

products offered and the way they are distributed, to the promotion methods employed

pompys project y final1

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