A

MINOR PROJECT
ON
COMPARATIVE STUDY OF LIFE INSURANE COMPANIES
SUBMITTED TO
AMITY SCHOOL OF INSURANCE, BANKING AND ACTUARIAL
SCIENCE (ASIBAS)

AMITY UNIVERSITY, NOIDA

GUIDED BY : SUBMITTED BY :
DR. SUNIL KADYAN SAMKIT JAIN
ASSISTANT PROFESSOR A2850618007
ASIBAS B.A.(H) INSURANCE &
BANKING
BATCH : 2018– 2021
 CERTIFICATE
This is to certify that Mr . Samkit Jain of ASIBAS of Amity University, Noida
campus, Uttar Pradesh has successfully completed the project work titled “A
Comparative Study Of Life Insurance Companies” in partial fulfilment of
requirement for the completion of B.A(H) Insurance and Banking prescribed by
the Amity University, UP,Noida Campus
This Project report is the record of authentic work carried out by him during the
period from 7 June 2019 to 29 June 2019.
He has worked under my guidance

Signature
Dr. SUNIL KADYAN
Assistant Professor
ASIBAS
Date:
DECLARATION

I , SAMKIT JAIN student of B.A.(H) INSURANCE AND BANKING from AMITY

SCHOOL OF INSURANCE , BANKING AND ACTUARIAL SCIENCE hereby declare
that I have completed my Term project on “ A COMPARATIVE STUDY OF LIFE
INSURANCE COMPANIES “ as a part of the course requirement.

I further declare that the information presented in this project is true and original to the best
of my knowledge.

SAMKIT JAIN
ACKNOWLEDGEMENT

This project would not have been possible without the guidance, help and cooperation of a
number of people. I extend my gratitude to all those people who helped me in some or other
way to complete my project.

Also I would like to express my deepest sense of gratitude to Dr SUNIL KADYAN, in

providing a sense of direction and continuous support in my report and his inputs regarding
the conduct and execution of this report . I wish to express my heartfelt gratitude to all friends
who have been associated with this study in every small and big way.

Thanking,
SAMKIT JAIN
TABLE OF CONTENTS

1. INTRODUCTION
1.1 INSURANCE
1.2 HISTORY OF INSURANCE
1.3 INSURANCE TERMINOLOGY
1.4 TYPES OF INSURANCE
1.5 LIFE INSURANCE
1.6 LIFE INSURANCE PRODUCTS
1.6.1 TERM INSURANCE
1.6.2 ENDOWMENT
1.6.3 MONEY BACK INSURANCE
1.6.4 WHOLE LIFE INSURANCE
1.6.5 UNIT LINKED INSURANCE POLICIES ( ULIP )
1.6.6 ANNUITY
2. REVIEW OF LITERATURE
3. FINDING AND DISCUSSION
4. CONCLUSION
5. REFRENCES
1. INTRODUCTION

The need for insurance is as old as commerce and trading in the civilized world. Risk is
inherent to life, commerce, tradingetc. The insurance will provide safety to it. Insurance
sector has been playing a leading role in the financial system of India. It has also been
facilitating an objective to build an efficient, effective and a stable economic environment in
India. It also caters to the needs of the both real economy and socio-economic objective of
the country. It is making inroads into the interiors of the economy and is being considered as
one of the fast developing areas in the Indian financial sector. It has been mobilizing long-
term saving through life insurance to support economic growth and also facilitating economic
development The Indian insurance industry was opened for private insurers in the year 1999,
with the establishment of Insurance Regulatory and Development Authority Act (IRDA Act).
Before liberalization there was monopoly of Life Insurance Corporation of India (LIC). The
entry of private companies in life insurance business breaks the monopoly of LIC. The
Insurance Regulatory and Development was established to regulate and to protect the
policyholder’s interest of the insurance industry. Indian life insurance is the fastest growing
sector, with many domestic and foreign players. The government of India allowed private
insurers in year 2000 with 26% foreign direct investment. In the post liberalization era, the
life insurance sector of India witnessed a significant growth as there is healthy competition
from many domestic as well as foreign private insurers. There is tremendous growth potential
for life insurance sector in India as we have huge population and still the Indian life insurance
market is untapped. Further, it indicates the growth prospects and a huge potential for life
insurance business in the country.
1.1 What Is Insurance?

Insurance is a contract, represented by a policy, in which an individual or entity receives

financial protection or reimbursement against losses from an insurance company. The
company to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial losses, both big and small,
that may result from damage to the insured or her property, or from liability for damage or
injury caused to a third party.

Understanding How Insurance Works

There is a multitude of different types of insurance policies available, and virtually any
individual or business can find an insurance company willing to insure them—for a price.
The most common types of personal insurance policies are auto, health, homeowners, and
life. Most individuals in the United States have at least one of these types of insurance, and
car insurance is required by law.

Businesses require special types of insurance policies that insure against specific types of
risks faced by a particular business. For example, a fast food restaurant needs a policy that
covers damage or injury that occurs as a result of cooking with a deep fryer. An auto dealer is
not subject to this type of risk but does require coverage for damage or injury that could
occur during test drives.

There are also insurance policies available for very specific needs, such as kidnap and ransom
(K&R), medical malpractice, and professional liability insurance.

Insurance Policy Components

When choosing a policy, it is important to understand how insurance works.

A firm understanding of these concepts goes a long way in helping you choose the policy that
best suits your needs.

Premium
A policy's premium is its price, typically expressed as a monthly cost. The premium is
determined by the insurer based on your or your business's risk profile, which may include
creditworthiness. For example, if you own several expensive automobiles and have a history
of reckless driving, you will likely pay more for an auto policy than someone with a single
mid-range sedan and a perfect driving record. However, different insurers may charge
different premiums for similar policies. So finding the price that is right for you requires
some legwork.

Policy Limit
The policy limit is the maximum amount an insurer will pay under a policy for a covered
loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over
the life of the policy, also known as the lifetime maximum.

Typically, higher limits carry higher premiums. For a general life insurance policy, the
maximum amount the insurer will pay is referred to as the face value, which is the amount
paid to a beneficiary upon the death of the insured.

Deductible
The is a specific amount the policy-holder must pay out-of-pocket before the insurer pays a
claim. Deductibles serve as deterrents to large volumes of small and insignificant
claims. Deductibles can apply per-policy or per-claim depending on the insurer and the type
of policy. Policies with very high deductibles are typically less expensive because the high
out-of-pocket expense generally results in fewer small claims.
 1.2 HISTORY OF INSURANCE
The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance
sector and is considered as one of the milestones in the history of Insurance in India.

The aim of the Malhotra Committee was to assess the functionality of the Indian insurance
sector. This committee was also in charge of recommending the future path of insurance in
India.

The Malhotra Committee attempted to improve various aspects of the insurance sector,
making them more appropriate and effective for the Indian market.
The Insurance Regulatory and Development Authority Act of 1999 brought about several
crucial policy changes in the insurance sector of India. It led to the formation of the Insurance
Regulatory and Development Authority (IRDA) in 2000.

The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to
initiate different policy measures to help sustain growth in the Indian insurance sector.

Important Milestones in the history of Indian Insurance industry.

 1993 Malhotra Committee established

 1994 Recommendations of the Malhotra Committee published
 1995 Mukherjee Committee established
 1996 Setting up of (interim) Insurance Regulatory Authority (IRA)recommendations of the
IRA
 1997 Mukherjee Committee Report submitted but not made public
 1997 The government gives greater autonomy to Life Insurance Corporation,
General Insurance Corporation, and its subsidiaries with regard to the restructuring of boards
and flexibility in investment norms aimed at channelling funds to the infrastructure sector
 1998 The cabinet decides to allow 40 percent foreign equity in private
insurance companies—26 percent to foreign companies and 14 percent to non-resident
Indians and Foreign Institutional Investors
 1999 The Standing Committee headed by Murali Deora decides that foreign equity in private
insurance should be limited to 26 percent. The IRA bill is renamed the Insurance Regulatory
and Development Authority Bill
 1999 Cabinet clears Insurance Regulatory and Development Authority Bill
 2000 President gives assent to the Insurance Regulatory and Development Authority Bill
Life insurance Industry today
Currently, 24 life insurance companies and 29 non-life insurance companies in the Indian
market compete with each other on price and service to attract customers. Out of the 24 life
insurance companies, Life Insurance Corporation of India (LIC) is the sole public sector
company fully owned by Government of India. All the policies issued by LIC of India enjoys
Sovereign guarantee of Indian Parliament.

The country’s insurance market is expected to quadruple in size over the next 10 years from
its current size of US$ 60 billion. During this period, the life insurance market is slated to
cross US$ 160 billion.

The general insurance business in India is currently at Rs 78,000 core (US$ 11.7 billion)
premium per annum and is growing at a healthy rate of 17 percent.

Insurance Penetration in India

India’s insurance market lags behind other economies in the baseline measure of insurance
penetration. At only 3.9 percent, India is well behind the 11.9 percent for Korea, 11.5 percent
for the UK, 11.1 percent for Japan, and 7.5 percent for the US. Indian Insurance Industry is
expected to grow to the US $ 280 billion by Financial Year 2020.

The Indian insurance market is considered to have a huge business opportunity waiting to be
harnessed. India currently accounts for less than 1.5 percent of the world’s total insurance
premiums and about 2 percent of the world’s life insurance premiums despite being the
second most populous nation.

The country is the fifteenth largest insurance market in the world in terms of premium
volume and has the potential to grow exponentially in the coming years.
1.3 INSURANCE TERMINOLOGY

Insurance is an intricate product and so is its glossary. Getting to know and

understand the terms can go a long way to help you understand the plan and thus
choosing the best one. Here we have listed and defined a few common terms used in
health insurance. These health insurance terminologies will give you a better
understanding of health insurance.
 Agent: He is a person appointed by the insurer to work on behalf of the insurer.
 Assignee: It is that person who gets the benefits of a policy.
 Claim: A request filed by an insured to the insurance company to pay for
services obtained from a health care professional.
 Certificate of Insurance: The description of the benefits and coverage
provisions forming the contract between the carrier and the customer. Discloses
what is covered, what is not and the cash limits.
 Co-payment: When the insured files a claim, there is a certain out-of-pocket
fraction of the claim amount he has to bear himself before the insurer steps in.
This fraction is known as co-payment. Co-payment is shown as a percentage of
the total claim amount.
 Cumulative Bonus: Cumulative bonus is similar to no claim discounts. For
every claim free year, the sum insured will progressively increase by 5%.
However, the cumulative bonus is subject to an amount that can never exceed
50 per cent of the Capital Sum Insured and that the policy was renewed
continuously.
 Deductible: The amount of loss borne by the insured. This loss can be a certain
money amount or a percentage of the claim amount. Bigger the deductible,
lower is the premium.
 Dependents: Spouse and/or unmarried children (whether natural, adopted or
step) of an insured.
 Exclusions: These are those conditions or circumstances for which an insured
will not be given any benefit.
 Insurer: The insurance company that assumes responsibility for the risk issues
insurance policies and receives premiums.
 Long-Term Care Policy: Insurance policies that cover specified services for a
specified period of time. Long-term care policies (and their prices) vary
significantly. Covered services often include nursing care, home health care
services, and custodial care.
 Long-term Disability Insurance: Pays an insured a percentage of their
monthly earnings if they become disabled.
 Premium: The monthly amount that you or your employer pays in exchange
for insurance coverage.
 Policy: It is a legal document, which acts as a contract between the insurer and
insured. It contains conditions of the insurance.
 Pre-existing condition: A medical condition of an individual is excluded from
coverage if the condition is believed to have existed prior to obtaining the
policy from a particular insurance company.
 Network: A group of doctors, hospitals and other health care providers
contracted to provide services to customers of the insurance companies for less
than their usual fees. Provider networks can cover a large geographic market or
a wide range of health care services. Insured individuals typically pay less for
using a network provider.
 Sum Insured: Sum insured is the pay out amount that the insurer is liable to
pay to the insured in case of an eventuality. It works on the principle of
indemnity. For e.g. the sum insured is Rs 3 Lakh under health insurance and if
the insured gets hospitalized and his expenses turn out to be Rs 2 Lakh, his
insurer is liable to pay him Rs 2 Lakh.
 Waiting period: When an individual signs up for a new health insurance
policy, there is a fixed period of time after which certain benefits of the policy
come in effect. For e.g. the usual waiting period for pre-existing conditions is 4
years
1.4 Types of Insurance

Risk is everywhere: When you drive your car to work, when you visit a new country, when
you ride your bike to a nearby shop, when there’s a new bug going around in town.

There are two broad types of insurance:

 Life Insurance
 General Insurance
And you need both in life.
 Types of Insurance

Types of Insurance

Life Insurance General Insurance

Term Money-back Unit-Linked Pension Motor Home Health Fire

Life policy Insurance Plan Plans Insurance Insurance Insurance Insurance

What is Life Insurance?

Life insurance is a contract that offers financial compensation in case of death or disability.
Some life insurance policies even offer financial compensation after retirement or a certain
period of time. Life insurance, thus, helps you secure your family’s financial security even in
your absence. You either make a lump-sum payment while purchasing a life insurance policy
or make periodic payments to the insurer. These are known as premiums. In exchange, your
insurer promises to pay an assured sum to your family in the event of death, disability or at a
set time.

What is General Insurance?

A general insurance is a contract that offers financial compensation on any loss other than
death. It insures everything apart from life. A general insurance compensates you for financial
loss due to liabilities related to your house, car, bike, health, travel, etc. The insurance company
promises to pay you a sum assured to cover damages to your vehicle, medical treatments to
cure health problems, losses due to theft or fire, or even financial problems during travel.

Simply put, a general insurance offers financial protection for all your assets against loss,
damage, theft, and other liabilities. It is different from life insurance

1.5 What is Life Insurance?

Life insurance is a contract between an insurer and a policyholder in which the insurer
guarantees payment of a death benefit to named beneficiaries upon the death of the insured.
The insurance company promises a death benefit in consideration of the payment of premium
by the insured.

BREAKING DOWN Life Insurance

The purpose of life insurance is to provide financial protection to surviving dependents after
the death of an insured. It is essential for applicants to analyse their financial situation and
determine the standard of living needed for their surviving dependents before purchasing a
life insurance policy. Life insurance agents or brokers are instrumental in assessing needs and
establishing the type of life insurance most suitable to address those needs. Several life
insurance channels are available including whole life, term life, universal life and variable
universal life (VUL) policies. It is prudent to re-evaluate life insurance needs annually, or
after significant life events like marriage, divorce, the birth or adoption of a child and major
purchases, like a house.

How Life Insurance Works

There are three major components of a life insurance policy.

1. Death benefit is the amount of money the insurance company guarantees to the
beneficiaries identified in the policy upon the death of the insured. The insured will
choose their desired death benefit amount based on estimated future needs of surviving
heirs. The insurance company will determine whether there is an insurable interest and if
the insured qualifies for the coverage based on the company's underwriting requirements.
2. Premium payments are set using actuarially based statistics. The insurer will determine
the cost of insurance (COI), or the amount required to cover mortality costs,
administrative fees and other policy maintenance fees. Other factors that influence the
premium are the insured’s age, medical history, occupational hazards and personal risk
propensity. The insurer will remain obligated to pay the death benefit if premiums are
submitted as required. With term policies, the premium amount includes the cost of
insurance (COI). For permanent or universal policies, the premium amount consists of the
COI and a cash value amount.

1. Cash value of permanent or universal life insurance is a component which serves two
purposes. It is a savings account, which can be used by the policyholder, during the
life of the insured, with cash accumulated on a tax-deferred basis. Some policies may
have restrictions on withdrawals depending on the use of the money withdrawn. The
second purpose of the cash value is to offset the rising cost or to provide insurance as
the insured ages.

Life Insurance Riders

Many insurance companies offer policyholders the option to customize their policies to
accommodate their personal needs. Riders are the most common way a policyholder may
modify their plan. There are many riders, but availability depends on the provider.

 The accidental death benefit rider provides additional life insurance coverage in the
event the insured's death is accidental.
 The waiver of premium rider ensures the waiving of premiums if the policyholder
becomes disabled and unable to work.
  The disability income rider pays a monthly income in the event the policyholder
becomes disabled.
 Upon diagnosis of terminal illness, the accelerated death benefit rider (ADB)allows
the insured to collect a portion or all of the death benefit.

Each policy is unique to the insured and insurer. Reviewing the policy document is necessary
to understand coverage in force and if additional coverage is needed.

1.6 LIFE INSURANCE PRODUCTS

1.6.1 What is Term Insurance Plan?

A term insurance plan is described as a pure life insurance protection plan that can be bought
for a particular time period and to provide utmost financial protection to the insured’s family
in case of any contingency. As term insurance does not offer maturity benefit, it offers a
lower premium rate as compared to the different life insurance policies. In a term insurance
plan, a death benefit is offered to the nominee of the policy in the event of the demise of the
insurance holder during the policy tenure.
In order to cater to the requirements of the insurance seekers, the insurance companies offer
an array of term insurance policies to choose from. As a simplest and comprehensive form of
insurance policy, it provides the customers with an excellent opportunity to financially secure
the future of their family and their loved ones in the most economical way. To know more
about what is term insurance let’s consider the below pointers.
 What are the Types of Term Insurance Plans?
The insurance companies offer an extensive range of term insurance policies in order to fulfill
the requirement of the insurance buyers. As per one’s own requirements and suitability, the
customers can compare various plans online and zero in on a plan. Let’s take a look at the
different types of term insurance plans available in the market.
Standard Term Insurance Plans

These are the most common and simplest form of term insurance plan which offers life
protection to the policyholder’s family in form of the death benefit in the event of untimely
death of the insurance holder during the policy term.
Group Term Insurance Plans

Group term insurance plan is specifically designed for businesses, companies, societies, and
associations. Group insurance provides life coverage to all the members of the specific group
or company. The benefits offered by group life insurance policies are the same as individual
term insurance plan. However, group term insurance plans provide high coverage as
compared to the individual term plan.
Term Return of Premium (TROP)

Term Return of Premium (TROP) is a type of term insurance plan which offers survival
benefit as the return of premium. In case, the policyholder lives the entire term of the policy
then the whole premium amount paid by the insurance holder excluding tax is paid back to
the policyholder. This plan is a great investment option for individuals who want to create a
corpus for a long run along with the benefit of life protection.

Why Term Insurance is better?

Many insurance buyers do not consider investing is term insurance plans as it only provides a
death benefit in event of the demise of the insured and does not offer any add-on benefit or
profitable returns. However, on the other hand, there are many benefits to purchasing a term
insurance policy. Some of these benefits offered by term insurance plan are:

1. Financial Protection-Term Insurance plans are the simplest and best way to create a
financial protection net. As the term plans financially secures the dependents of the life
assured in case of his/her unfortunate demise.
2. Offers Affordability-Along with the death benefit, there are various other additional benefits
offers by term plan at an economical premium rate.
3. Adequate Coverage- the insurance buyers can choose the coverage of a term insurance plans
by comparing a wide range of term insurance plans online.
4. Survival Benefits- A traditional term insurance plans do not offer any survival benefit.
However, there are many insurance companies which offer Term return of Premium Plan
(TROP) under which maturity benefit is provided to the policyholder in case he/she survives
the entire tenure of the policy.
5. Low Claim Rejection- As the policy tenure of term insurance plan is more than 10 years; the
ratio claim rejections are observed to be lower. Therefore, purchasing a term insurance plan
is ideal if the individual wants to make sure that their claim is honoured.
6. Riders- Along with the basic life coverage the term insurance plans provide add-on rider
benefit to enhance the coverage of the policy. The insurance buyers can buy rider benefit by
paying an extra premium along with the basic premium of the policy. Some of the riders
offered by term insurance plans are accidental death benefit, critical illness, partial and
permanent disability and waiver of premium.
7. Tax Benefit- Term insurance plan also offers the benefit of tax exemption to the insured on
the on the premium amount paid U/ S 80C of Income Tax Act 1961. Moreover, the death
benefit offers by term plans are also applicable for tax exemption under 1961.

1.6.2What is an Endowment Plan?

Endowment plan is a life insurance policy which provides you with a combination of both
i.e.: an insurance cover, as well as an savings plan. It helps you in saving regularly over a
specific period of time, so that you are able to get a lump sum amount on policy maturity, if
the policyholder survives the policy term.

The policyholder gets his/her sum assured on a fixed date in future as per the policy terms
and conditions. However, in case of sudden death of the policyholder, the insurance company
will pay the sum assured (plus the bonus, if any) to the nominee of the policy. Besides, it is
also useful to secure yourself or your family post-retirement or to meet various financial
needs such as funding for children's education and/or marriage or buying a house.

Features of Endowment plan

  Death along with Survival benefits:

In case of demise of the insured, the beneficiary/nominee of the policy gets the sum assured
along with bonuses. Also, the insured is allowed to get the sum assured if he/she outlives the
policy.

 Higher returns:

An endowment policy is helpful in building a corpus for future and providing financial
protection to your family. The pay-out for survival benefit and death benefit of an
endowment plan is higher than that of a pure life insurance policy i.e. Term Plans.

 Premium payment frequency

The policyholder can make payment of the premium based on the policy chosen by him/her.
Payment can be done on monthly, quarterly, half-yearly, and on yearly basis.

 Flexibility in Cover:

Riders like critical illness, total permanent disability, and accidental death can be added to the
base plan and enhance the life cover. In addition to this, there are a few plans that offer
waiver in the premium payment on total permanent disability or critical illness.

 Tax Benefits:

The policyholder is entitled to get tax exemption on both premium payments, maturity and
final pay-outs under the Section 80C and Section 10(10D) of the Income Tax Act, 1961.

 Low Risk:

Traditional Endowment policies are considered safer as compared to the other investment
option such as the Mutual Fund or the ULIP’s because the amount here is not directly
invested in equity funds or the stock market

Benefits of Endowment Plan

 Provides Insurance Cover: An endowment policy provides insurance cover during
the policy term.
  Lump sum pay out: It provides a lump sum pay out when the policy matures (i.e. at
the end of the policy term)

 Serves with a dual purpose: An endowment policy serves you with a dual purpose as
it not only works as an insurance policy but also offers you with long term investment
benefit.

 Provides you with a Tax Benefit: You are entitled to get tax exemption on both
premium payments, maturity and final pay-outs under the Section 80C and Section
10(10D) of the Income Tax Act, 1961.

 Offers Low-Risk Investments: When it comes to investing, endowment policies are

considered as a relatively safer option than other types of investments.

 Offers Long-term savings: An endowment policy offers long term savings. You can
choose a policy term ranging from 10, 15, 20, 30 to 40 years.

 Provides option to add riders: With Endowment policies, you get an option to
enhance your policy by opting for additional riders like critical illnesses, waiver of
premium, family income benefit, accidental death benefit, and accidental permanent
total / partial disability benefit.

 Additional Bonuses: Insurance companies also declare bonuses. Here, the bonus is
the extra amount of money added to the proceeds, which is distributed to a
policyholder by an insurer.

However, policyholder of a with profit policy only is entitled to share in these profits. Also,
payment of bonus is conditional on the life insurance company which has surplus funds after
expenses, costs, claims have been paid for that year.

1.6.3 Money Back Policy

Most of us want to invest in a traditional life insurance policy for a long tenure to create a
guaranteed corpus. However, we face a problem when we need funds before the tenure is
over. A financial crisis might strike anytime and we need funds to tackle it. But a traditional
life insurance policy comes to no help if the plan tenure is not over. We can avail a loan but it
might be limited in amount. What to do? Is there a plan which pays lump sum benefits during
the plan tenure?

Yes, there is. A money-back plan solves the problem of liquidity during the plan tenure by
paying a percentage of the Sum Assured regularly through the plan tenure. Let's understand
the plan in detail.
How does a money back policy work?
Examples always give a clear understanding of how an insurance plan works. So, here is a
simple illustration which shows the workings of a money-back policy:

Example – Mira buys a money back plan for a Sum Assured of Rs.10 lakhs. She chooses a
term of 25 years and pays regular premiums throughout the policy tenure.

The Plan promises survival benefits @20% of the Sum Assured after every 5 years of the
plan. On maturity, 20% of the Sum Assured is paid along with any accrued bonuses.

Mira, thus, receives Rs.2 lakhs every 5 years, i.e. in the 5th policy year, 10th policy year,
15th policy year and 20th policy year. At the end of the 20th policy year, Mira has already
received Rs.8 lakhs. On maturity, Rs. 2 lakhs along with added bonuses would be paid to her
and the plan would terminate.

If Mira dies on the 18th year of the policy, Rs.10 lakhs would be paid to the nominee along
with the added bonus even though she has already received Rs.6 lakhs as Survival Benefits.

1.6.4 What Is A Whole Life Policy?

Whole Life Insurance Plans are insurance plans which provide cover to you for the rest of
your life provided you pay the premium on time. You receive maturity benefit in case you
survive the policy term. The nominee appointed by you receives the death benefit in case of
your death.
A whole life policy is a type of life insurance that provides guaranteed death benefits during
the entire life of the policyholder. The coverage is extended for as long as the insured lives, as
long as the premiums are paid up and the policy is not surrendered. These plans are designed
to cater to those who do not want a fixed tenure, but rather have insurance cover till whenever
they meet their demise. The policy will also build up a cash value which makes the premiums
higher than some other plans.

Benefits of Whole Life Policy:

 Lifetime Protection - The coverage of the policy will end only when the life insured passes on.
This kind of life insurance keeps premiums steady through the entire policy. The policy will
not be cancelled upon the diagnosis of any illness or other health issues. The only requirement
is that premiums must be paid up as and when required.
Stable Premiums - Taking a whole life policy at a young age can lock in a low premium rate
for the entire term.
Cash Value - These policies accumulate a cash value through the course of the policy. The cash
value can be used to reduce future premiums, or it can be withdrawn. Loans may also be
available against the cash value of the policy.
Flexibility - Whole life insurance plans allow the policyholder to use the cash value or retain it
in the policy to grow the value of the plan even further.
Option to avail loan - There are whole life insurance policies which also offer you the option
of availing loan against it.
Tax benefits- You can avail exemptions on your taxes for the premiums paid under Section
80C of the Income Tax Act, 1961. In case something happens to you, the beneficiary will
receive a lump-sum amount called the death benefit which is also exempted from being taxed
under Section 10(10D) of the Income Tax Act, 1961.
Eligibility Criteria for Whole Life Policy:
All insurance companies require individuals to meet certain criteria in order to be eligible for
a whole life insurance plan. The general requirements have been listed below, however, this
will differ between insurers.
 You should be at at least 18 years of age. There are some plans that are available to infants
of 30 days as well.
 You should not exceed the age of 60 years upon entry into the plan.
 The maximum age upon maturity is 100 years.
 The minimum sum assured is around Rs.50, 000.
 You can pay the premium either in a single premium, for a limited period or for the tenure
of the policy.
 Premiums are payable annually, bi-annually, and quarterly or monthly.
 Minimum premiums can be as low as Rs.500 per month.
1.6.5 What Is ULIP?

Unit Linked Insurance Plan or ULIP is an insurance product which offers risk coverage to the
policy buyer along with introducing the buyer to investment opportunities in the capital
market. It provides a platform for the buyer to invest in different types of investment
instruments such as stocks, bonds as well as mutual funds. ULIP can be classified as a two-
in-one plan which aims at offering investment and protection to investors, which are
customised according to individual requirements. As a comprehensive plan, the investment
and protection part can be managed according to specific buyer choices and needs.

Types of ULIP Plans

Classification by Purpose
ULIP for Retirement
This plan requires you to pay the premium during the tenure of your employment. This
amount is automatically collected as your corpus and is used to purchase an annuity post your
retirement.

ULIP for Wealth Collection

People invest in this plan in order to accumulate wealth over a period of time. This is a highly
recommended plan for millennial in their late twenties and early thirties, so that they have the
flexibility to fund any future financial goal.

ULIP for Children Education

Some ULIP plans also support a child's education. These plans protect your child's future in
any unforeseen situation by pooling in some chunk of money. This ensures that the key
events in your child's life never face a financial crisis.

ULIPs for Health Benefits

In addition to the above, certain ULIP plans also assist in providing money in case of medical
emergencies.

Classification by Death Benefit

Types 1 ULIP Plans
Under Type-I ULIP, the nominee gets the higher of Sum Assured or Fund Value as a death
benefit to the nominee. However, in case the assured dies in the initial years of the policy,
when the fund value is lower than the sum assured, the insurer will pay the agreed sum to the
assured's nominee. But when the fund's value is more than the sum assured, the death benefit
is an accumulated amount in the fund.

1.6.6 What is an annuity?

Nationwide annuities are designed to help you grow your retirement income. They’re a long-
term contract from an insurance company where you invest your money. In return, you get
income in the form of regular payments.

How do annuities work?

An annuity is a long-term investment that is issued by an insurance company designed to help

protect you from the risk of outliving your income. Through annuitization, your purchase
payments (what you contribute) are converted into periodic payments that can last for life.
Nationwide's annuities are flexible, so you can choose one that enables you to:
 Invest a lump sum or invest over a period of time
 Start receiving payments immediately or at some later date
 Select a fixed, variable or indexed rate of return
Investing involves risk and may lose value. All guarantees and protections are subject to the
claims paying ability of the issuing company, but the guarantees do not apply to any variable
accounts which involve investment risk and possible loss of principal.

2. Review of Literature

C. Barathi, C. D. Balaji and Ch. Ibohal Meithei (2011), in the research paper titled
“Innovative Strategies to Catalyse Growth of Indian Life Insurance Sector- an Analytical
Review” have clearly discussed about the impact of global recession on the fastest growing
Indian insurance market. They find the entry ofmany private companies has created a
paradigm shift in insurance marketing in India in terms of products, tariffs; customer service
etc. Chatterjee. P (2009) evidently said private insurers recorded 62% growth rate in April-
December 2008 against 45% in the same period of last fiscal. ICICI Prudential, HDFC
Standard, SBI Life and Bajaj Allianz are the dominant players of the life Insurance sector.
LIC a market leader recorded a decline of 28% and experts said the Industry has witnessed a
reasonable growth despite the tight financial conditions. Kapse. S and Kodwani D.G (2003),
in their article, argued that in the changing scenario for the insurance sector there is going to
be a good opportunities for insurance sector to expand its market base. For this purpose there
is need to improve the features of the insurance products to make them more liquid or short
term schemes could be increased. Krishnamurthy S, Mony. S, Jhaveri. N, Bakhshi. S, Bhat. S
and Dixit M.R (2005), in their paper clearly explained the status and growth of Indian
Insurance Industry after liberalization and also present future challenges and opportunities
linked with the Insurance. Rajasekar D and T.H.Kumari (2014), the level of penetration,
particularly in life insurance, tends to rise as income levels increase. The market share of the
entire private players has sharply risen with the entry of private players in life insurance
market. This indicates that the private players are doing quite well and are improving year by
year, thus affecting the performance of LIC. Rao Divakara P (2015), Number of polices has
subsequently increased year after year but the performance of LIC has deteriorated and those
of private players have been improved tremendously. With every successive year, private
players are gaining the trust of the public and have quite successful in snatching the business
from LIC. Though the income of private insurance companies is negligible when compared
with LIC but then also the pace with which they are increasing their income is tremendous.
Private insurance companies are expanding their business and will certainly going to give a
tough competition to LIC in the coming days

3. FINDING AND DISCUSSION

Term insurance
Endowment policy

MONEY BACK
ANNUTY PLAN

ULIP
4. Conclusion
Liberalization has led to the entry of the largest insurance companies in the Indian insurance
market and has become more attractive for foreign insurers due to saturation of insurance
market in many foreign countries. That is why Indian insurance industry has become a
growing industry with many domestic and international players. Different life insurance
companies increased the competition in this industry. This level of competition has increased
the number of innovative and attractive insurance plans, better customer services and
increased insurance awareness in India. Huge population in our country and a big untapped
market has increased its scope of growth for next many years. Life insurance has today
become a mainstay of any market economy since it offers plenty of scope for garnering large
sums of money for long periods of time. Though privatization of the insurance sector is
feared to affect the prospects of the LIC,the study shows that the LIC continues to dominate
the sector. Private sector insurance companies also tried to increase their
Market share

5. References –
www.policybazar.com
www.coverfox.com
www.bankbazaarinsurance.com