A

PROJECT REPORT

ON

Differentiation Between Intra ULIP products of Reliance Life

Insurance Company

SUBMITTED TO:
Global Business School & Research Centre,
Dr. D. Y. Patil Vidyapeeth, Pune

Project Guider-Prof. Rajeev Taneja

SUBMITTED BY:
Sreenath M.C
MBA

1
 2009-2011
PROJECT INDEX
No. INDEX Pg. no.
1 EXECUTIVE SUMMARY
2 OBJECTIVE
3 RESEARCH METHODOLOGY
4 LIMITATION
5 SOURCES OF INFORMATION
6 INDUSRTY DETAILS
6.1 MEANING OF INSURANCE
6.2 IMPORTANCE OF THE INSURANCE
6.3 DIFFERENCE BETWEEN INSURANCE AND
ASSURANCE
6.4 PRINCIPLES OF INSURANCE
6.5 MEANING OF LIFE INSURANCE
6.6 KEY FEATURES OF LIFE INSURANCE
6.7 BENEFITS OF LIFE INSURANCE
6.8 ROLE OF LIFE INSURANCE IN GROWTH OF THE
ECONOMY
7 COMPANY DETAILS
7.1 ABOUT RELIANCE LIFE INSURANCE
7.2 HISTORY
7.3 MISSION
7.4 CORE VALUES
7.5 FUTURE PLANS
7.6 ORGANISATIONAL FORM AND STRUCTURES
8 UNIT LINKED PLAN
8.1 RELIANCE MARKET RETURN PLAN
8.2 RELIANCE GOLDEN YEAR PLAN
8.3 SWOT ANALYSIS
8.4 SALES PROCESS USED IN RELIANCE LIFE
9 ANALYSIS AND INTERPRETATION
10 FINDINGS
11 CONCLUSIONS
12 RECOMMENDATIONS
13 BIBLIOGRAPHY
14 ANNEXURE

2
 Acknowledgement
The sole of any individual are not sufficient enough to complete the project.
The completion of a project involves the effort and interest of many people.
Same is the case with our project. There are many people whom we have to
thank who directly or indirectly helped us a lot in completion of our
research.
The goal was fixed and we began with a determined resolved and put in
ceaseless sustained hard work. The higher the summit, the harder the climb.
There were times when the goal looked beyond reach but all difficulties
were accepted as a challenge, greater was the effort to overcome it.
I would like to acknowledge sincere thanks to my college “GLOBAL
BUSINESS SCHOOL & RESEARCH CENTRE” for giving me opportunity
to work on this project and providing necessary information.
I am thankful to the Director Dholakia and my
project guide Prof. Rajeev Taneja. Without his assistance and guidance it
would have been difficult to complete this project.

3
INSURANCE INDUSTRY

4
1.1 MEANING OF INSURANCE

Insurance may be described as a social device to reduce or eliminate

Risk of loss to life and property. Insurance is a collective bearing of

risk. Insurance is a financial device to spread the risks and losses of

few people among a large number of people, as people prefer small

fixed liability instead of big uncertain and changing liability. Insurance

can be defined as a “legal contract between two parties whereby one

party called insurer undertakes to pay a fixed amount of money on

the happening of a particular event, which may be certain or

uncertain.” The other party called Insured pays in exchange a fixed

sum known as premium. Insurance is desired to safeguard oneself and

one’s family against possible losses on account of risks and perils. It

provides financial compensation for the losses suffered due to the

happening of any unforeseen events.

1.2 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial

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market. Insurance services play predominant role in the process of
financial intermediary. Today insurance industry is one of the most

growing sectors in India. There is lot of potential in the Indian

Insurance Industry. There are many issues, which require study. The

scope of the study of insurance industry of India would be very great

as there are ongoing developments in the industry after the opening of

the sector. The major issue right now is the hike in FDI (Foreign

Direct Investment ) limit from 26% to 49% in the insurance sector.

Government may in near future allow 49% FDI in Insurance. This

would lead to more capital inflow by foreign partners.

Another major issue is the effects on LIC after the entry of private

Players in the market. Though market share of LIC has been affected,

it has improved in terms of efficiency. There are number of other hot

topics like penetration of Health Insurance, Rural marketing of

insurance, new distribution channels, new product ranges, insurance

brokers’ regulation, incentive scheme of development officers of LIC

etc. So it offers lot of scope for studying the insurance industry.

Right now the insurance industry has great opportunities in a country

Like India or China which huge population.

1.4 MEANING OF LIFE INSURANCE

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There are three parties in a life insurance transaction: the insurer, the

insured, and the owner of the policy (policyholder), although the owner and

the insured are often the same person.

Another important person involved in a life insurance policy is the

beneficiary. The beneficiary is the person or persons who will receive the

policy proceeds upon the death of the insured.

Life insurance may be divided into two basic classes – term and permanent.

• Term life insurance provides for life insurance coverage for a

specified term of years for a specified premium. The policy does not

accumulate cash value.

• Permanent life insurance is life insurance that remains in force until

the policy matures, unless the owner fails to pay the premium when

due.

• Whole life insurance provides for a level premium, and a cash value

table included in the policy guaranteed by the company. The primary

advantages of whole life are guaranteed death benefits, guaranteed

cash values, fixed and known annual premiums, and mortality and

expense charges will not reduce the cash value shown in the policy.

• Universal life insurance (UL) is a relatively new insurance product

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intended to provide permanent insurance coverage with greater

flexibility in premium payment and the potential for a higher internal

rate of return. A universal life policy includes a cash account.

Premiums increase the cash account.

If you want insurance protection only, and not a savings and investment

product, buy a term life insurance policy.

If you want to buy a whole life, universal life, or other cash value policy,

plan to hold it for at least 15 years.

Canceling these policies after only a few years can more than double your

life insurance costs. Check the National Association of Insurance

Commissioners website (www.naic.org/cis) or your local library for

information on the financial soundness of insurance companies.

1.5 BENEFITS OF LIFE INSURANCE

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1) Risk cover: -

Life Insurance contracts allow an individual to have a risk cover against any

unfortunate event of the future.

2) Tax Deduction: -

Under section 80C of the Income Tax Act of 1961 one can get tax deduction

on premiums up to one lakh rupees. Life Insurance policies thus decrease the

total taxable income of an individual.

3) Loans: -

An individual can easily access loans from different financial institutions by

pledging his insurance policies.

4) Retirement Planning: -

What had provided protection against the financial consequences of

premature death may now be used to help them enjoy their retirement years.

Moreover the cash value can be used as an additional income in the old age.

5) Educational Needs: -

Similar to retirement planning the cash values that flow from ones life

insurance schemes can be utilized for educational needs of the insurer or his

children.

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10
2.1Research Methodology
OBJECTIVE

 To understand the basics of investment and various alternatives that

are available with the investor.

 Also to understand the customer psychology of investments and what

are the various objectives behind the investment.

TYPE OF RESEARCH

Descriptive in nature- The descriptive research design is one that

describes the things such as the market potential for a product or the
demographics and attitudes of consumers who buy the product. It
includes questionnaire survey and fact finding inquiry.

SAMPLE DESIGN

 SAMPLE UNIT: Pune region

 SAMPLE SIZE: 50
 SAMPLE SELECTION: Random, convenient

DATA COLLECTION TOOLS

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 1. Primary data. The major source of primary data was the information
and questionnaire collected from the investors and the customers. The
information collected from the journals and the trainer can also be
referred to as the primary data.

2. Secondary data. The major source of secondary data was the

reference books and company’s website. The company’s articles and
magazines were also referred to for the information.

2.2Sources of Data Collection

PRIMARY DATA COLLECTION

Primary data was collected through questionnaires. Refer to the appendix for
the data.

SECONDARY DATA COLLECTION

Secondary sources through –

 Internet
 Articles
 papers and
 books

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13
INTRODUCTION TO THE COMPANY
3.1 ABOUT RELIANCE LIFE INSURANCE
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd.

of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of

India’s leading private sector financial services companies, and ranks among

the top 3 private sector financial services and banking companies, in terms

of net worth. Reliance Capital has interests in asset management and mutual

funds, stock broking, life and general insurance, proprietary investments,

private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company

(NBFC) registered with the Reserve Bank of India under section 45-IA of

the Reserve Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial

services sector in India and aims to become a dominant player in this

industry and offer fully integrated financial services.

Reliance Life Insurance is another steps forward for Reliance Capital

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Limited to offer need based Life Insurance solutions to individuals and

Corporate.

3.2 HISTORY
Reliance Capital Limited announced the launch of its life insurance business

on February 1, 2006. This was after obtaining the required regulatory

approvals from the Registrar Of Companies and the Insurance Regulatory

and Development Authority.

It was in August 2005 that the ball was set rolling when Reliance Capital

Limited, the financial arm of Reliance – Anil Dhirubhai Ambani Group

(ADAG) – announced the requisition of 100% shareholding in AMP Sanmar

Life Insurance Company Limited; and the formal transfer of shares took

place in October 2005. The company will issue all policy contracts under the

Reliance Life Insurance Company limited name. All the existing policy

contracts also stand transferred to the Reliance Life Insurance entity with all

the original contractual terms and commitments intact.

3.3 MISSION

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The mission of Reliance Life Insurance Company Limited is to be the best
in

every sphere- business results, customer care and employee focus. The aim

of the company is to Think Bigger and Think Better.

3.4 CORE VALUES

Reliance Life Insurance Company Limited has some core values which are

listed as follows:

1) Result Oriented

2) Performance Driven

3) Customer Focused

4) Learning and Development Oriented

5) Employee Centric

6) Informal and Fun

3.6 ORGANIZATION FORM AND STRUCTURE

CEO

CMO

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 Channel Head

Regional Head

Branch Head

Sales Manager

Advisors/Agents

Customers

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4.2 UNIT LINKED PLAN

A unit-linked policy is a life assurance policy in which the benefits

depend on the performance of a portfolio of shares. Each premium paid by

the insured person is split: a part is used to provide life assurance cover,

18
while the balance (after the deduction of costs, expenses, etc.) is used to buy

units in a unit trust. In this way, a small investor can benefit from investment

in a managed fund without making a large financial commitment. As they

are linked to the value of shares, unit linked policies can go up or down in

value. Policyholders can surrender the policy at any time and the surrender

value is the selling price of the units purchased by the date of cancellation

(less expense). A small part of the contribution is used for providing life

cover and the balance is invested in unit. Legal heirs are entitled to the

amount of insurance cover and entitled units in case of death of the insured.

Reliance Life Insurance Company Limited has also offered the two

Unit Linked Plans, which are listed as follows:

1) Reliance Market Return Plan

2) Reliance Golden Years Plan

Amongst the above plans the Reliance Market Return Plan is the

largest selling plan of the Reliance Life Insurance Company Limited. The

above two ULIP plans are discussed as follows:

1) Reliance Market Return Plan: -

Reliance Market Return Fund is the unit-linked product that helps you invest

in the financial markets in a combination of investment instruments of your

choice. You can enjoy the returns from the markets without the trouble of

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monitoring and managing your own investment portfolio and keeping track

of the market movements. At the same time your investment premiums

provide you with insurance cover. Reliance Market Return Fund unit-linked

insurance plan provides you with a basket of fund options that balances your

return and risk exposure while providing life cover at the same time.

􀂙 Features: -

a) Minimum entry age is 30 days and maximum entry age is 65 year

b) Maximum policy term 40 year and minimum policy term 5 year

c) Mode of premium as annual, quarterly, half yearly and monthly Rs. 1000

(for salary deduction only) and Rs.2500 (standing order/credit card)

d) Top up premium minimum Rs. 2500

e) Option of investment fund

i. Capital secure 100% fixed interest securities

ii. Balanced minimum 80% fixed interest securities and maximum 20% in

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 equity

iii. Equity 100% equity

iv. Growth minimum 60% fixed interest securities an maximum 40% in

equity

f) Loan facility is not available

g) One switches every year free and subsequent switch charged 1% of the

amount switched

h) Partial withdrawals per year under regular and single premium options is
2 times

i) Lock in period till today is 3 year

j) Minimum unit account balance after each withdrawals is Rs. 10,000

2) Reliance Golden Years Plan: -

Reliance Golden Years Plan….. The Reliance Life Insurance ‘no-worry stay

happy’retirement plan. Reliance Golden Years Plan is a flexible package that

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provides freedom of choice in choosing the type of investment, life cover,

vesting options such as commuting and annuity options. Contributions

provide Income tax savings as well.

Reliance Golden Years Plan, a flexible pension product is available for all

individuals who are between the ages of 18 and 65.

􀂙 Features: -

a) Entry age minimum is 18 year and maximum 65 year

b) Minimum premium amount Rs. 10,000 and maximum is unlimited

c) Mode of premium payment is available

d) Pension plan with risk cover and without risk cover

e) Choice of investment

i. Capital secure fund – 80% in equity and 20% in government security

ii. Balanced fund – 80% in government and 20% in equity

f) No loan facility is available

g) Tax benefit is available

h) Annuity options

i. Annuity payable for life

ii. Annuity payable for 5/10/15 years certain and thereafter with life

iii. Annuity payable for life with return of capital on death of the annuitant

4.3 COMPARATIVE STUDY

Presently there are 15 Life insurance companies in the country.
There is only one public sector company LIC and the rest 24 are private

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sector. Although LIC has been dominating the Life Insurance business since

past few years the private players have now started to take the momentum.

Major Market Players:

Birla Sun Life Insurance Company: -

Birla Sun Life Insurance Company is a 74:26 joint venture

between Birla group and Sun Life Financial. It is a private sector company.

The company was registered on 31/1/2001. The market share for FY 2005-

06 was 1.89%

􀂾 HDFC – Standard: -

HDFC standard is a 74:26 joint venture between HDFC and

Standard Life. It is a private sector company. The company was registered

on 23/10/2000. The market share for FY 2005-06 was 2.87%.

􀂾 ICICI Prudential Life Insurance: -

ICICI Prudential Life is a 74:26 joint venture between ICICI

and Prudential. It is a private sector company. The company was registered

on 24/11/2000. The market share for FY 2005-06 was 7.35%.

􀂾 Life Insurance Corporation of India (LIC): -

Life Insurance Corporation of India is a 100% government held

Public Sector Company. Being the first to be established LIC is the

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forerunner in the Life Insurance sector. The market share for FY 2005-06

was 71.44%.

􀂾 Kotak Mahindra OLD Mutual: -

Kotak Mahindra OLD Mutual is a 74:26 joint venture between

Kotak Mahindra bank and Old Mutual. It is a private sector company. The

company was registered on 10/1/2001. The market share for FY 2005-06

was 1.11%.

􀂾 Max New York Life: -

Max New York Life is a 74:26 joint venture between J & Bank,

Pallonji & Co and MetLife. It is a private sector company. The company was

registered on 6/8/2001. The market share for FY 2005-06 was 1.23%.

􀂾 Aviva Life Insurance India: -

Aviva Life insurance is a 74:26 joint venture between Aviva and

Dabur. It is a private sector company. The company was registered on

14/5/2002. The market share for FY 2005-06 was 1.14%.

􀂾 ING Vysya Life insurance: -

ING Vysya Life Insurance is joint venture between Exide

(50%), Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a

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private sector company. The company was registered on 2/8/2001. The

market share for FY 2005-06 is 0.79%.

􀂾 Met Life India: -

Met Life India is a 74:26 joint venture between 74:26 JV between J & Bank,

Pallonji & Co and MetLife. It is a private sector company. The company was

registered on 6/8/2001. The market share for FY 2005-06 was 0.40%.

􀂾 Bajaj Allianz Life Insurance Co.: -

Bajaj Allianz Life Insurance Company is a 74: 26 Joint

venture between Bajaj Auto limited and Allianz AIG. The company was

registered on 3/8/2001. The market share for FY 2005-06 was 7.56%.

􀂾 SBI Life Insurance Company Ltd: -

SBI Life Insurance Company is a 74: 26 Joint venture between

SBI and Cardiff S.A. The company was registered on 31/3/2001.It is a

private sector company. The market share for FY 2005-06 was 2.31%.

􀂾 The TATA AIG Group: -

TATA AIG group is a 74:26 JV between Tata Group and AIG. It

belongs to the private sector. The company was registered on 12/2/2001. The

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 market share for FY 2005-06 was 1.29%.

4.4 GROWTH OF RELIANCE LIFE INSURANCE (MAY 2010) :

HOW THEY STACK UP

Premium income of life insurers in Rs crore

       April - June

Total Share
  Growth %
(%)
2007 2008

LIC 8580.84 7524.56 -19 52.55

ICICI Prudential 1056.45 1,590.27 61 11.11

Bajaj Allianz 731.85 829.24 15 5.79

SBI Life 426.39 1,148.67 190 8.02

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HDFC Standard 355.93 490.40 45 3.42

Max New York 289.74 501.16 93 3.50

Reliance Life 204.10 557.33 238 3.89

Birla Sun Life 174.63 501.53 210 3.50

Total Private 3930.95 6,795.64 90 47.45

Total Market 12511.80 14,320.20 14 100.00

4.5 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors,

Which have impact on the survival of any organization. Now let’s

make SWOT analysis is for reliance Life Insurance Company Limited.

STRENGTHS:

1) Reliance Life Insurance Company Limited is the part of the

Reliance Capital.

2) The brand name is enough to sell the products easily.

3) Private placement of Rs. 10,000 crs worth of securities with RBI

by the government. Led to an improvement in market securities.

4) Strong liquidity from FII was the major reason for the up move.

5) Wide range of products.

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6) Reliance has a long and strong history of solvency, financial

stability.

WEAKNESSES:

1) Newly established company, so people seems it risky.

2) Lack of staff.

3) Lack of advertisement, so most of the customers are not aware

Of the Reliance Life Insurance.

OPPORTUNITY:

1) There is a vast untapped market in India. The life insurance

penetration in India is approximately 2.5%. So it has larger

potential.

2) Intention of traditional products is to encourage long term, Regular

and disciplined savings to systematically build up target fund.

3) The average insurance premium being collected by the

company has been growing exponentially year on year.

THREATS:

1) The main threat is from the other players who have grabbed

Approximately 15% of the market share.

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2) As the government has scrapped the rebate on the life insurance

premium, the people who used to invest in life insurance for the

sole motive of tax benefit may turn to other instruments.

4.6 SALES PROCESS WHICH USED IN RELIANCE LIFE:

Sales process involved Personal selling. Our product being an intangible one, it
needs the company personnel to go and persuade the customer via addressing to
his doubts and concerns. We need to undergo requisite interaction with the
prospective customers to gauge their mood with respect to different price levels.
As the sales personnel are also aware of the competitors’ price and, based on the
market reaction and customers’ sentiments, they can advise a more prudent price
policy to the management.
The sales person actually stimulates and generates enough interest in the
customer and helps him make the final decision to buy the product.
Steps in personal selling
Personal selling involves six important steps –

Prospecting Preapproach Approach

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 Follow-up
Presentation Closing

Prospecting

Prospecting is the process of identifying the prospective buyers of the product.

The prospects are those who have the need or will to buy and the power to pay. A
prospect is qualified if he has the authority, need, ability and eligibility to buy. In
our context prospects used to be the owners in case of a small company and
Promotions & Advertising head in that of a big organization.

Computation of Net Asset Value (NAV) =

Market Value of investment + the value of current asset + Expenses incurred

in purchase of asset

No. of Units Existing at the valuation date

NAV per share GYP MRP

Energy Fund 10.267 10.012

Equity Fund 11.773 23.867
Infrastructure Fund 9.414 9.414
MidCap Fund 11.6824 9.6824
Pure Equity 10.5204 8.004
Balance Fund 15.5909 12.587
Capital Secure Fund 13.544 11.077
Growth Fund 13.6283 17.107

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Market Return
From 1st Jan -
31 July GYP MRP

Balance Fund 12.7115 12.7169

Capital Secure
Fund 4.7839 9.761
Growth Fund 29.326 20.1041
Energy Fund 43.075 45
Pure Equity
Fund 47.2472 47.492
Infrastructure
Fund 35.2886 29.678
MidCap 50.609 54.909

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 60
50
40 M a rk e t R e tu r n F ro m
1 s t J a n - 3 1 J u ly
30
G YP
20
10 MRP
0
1 2 3 4 5 6 7 8 9

QUESTIONNAIRES
Declaration: It is purely for academic purposes and the data given will not be
passed to anyone. I request you to kindly fill up the form. Thank you.

NAME:
_____________________________SURNAME____________________
DATE OF BIRTH: ___________________
PRESENTADDRESS___________________________________________
________________
_____________________________________________________________
_________________
LANDMARK: ______________________PIN ______________
PHONE NO _____________ MOBILE____________________
PERMANENT ADDRESS:

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_____________________________________________________________
_____
_____________________________________________________________
_____
EDUCATION: ________________________
OCCUPATION: _______________________

MONTHLY INCOME:
i)<Rs—15,000 ii) Rs15000-Rs-30,000 iii)> Rs30, 000

1. Are you aware with life Insurance?

i) Yes ii) No iii) can’t say

2. Are you interested in investing your money?

i) Yes ii) No iii) Can’t say

3. Where you want to invest your money?

i) Shares ii) Mutual funds
iii) Insurance iv) Fixed deposits
v) other…please specify………………………………………………

4. What is your purpose for buying insurance policy?

i) For old age saving ii) Family needs
iii) Time to time needs iv) Opposite circumstances
v) other..please specify………………………………………………..

5. In buying insurance policy, your decision is influenced by

i) Family ii) Professional and trade union group
iii) Friends iv) Brand and Advertisement
v) Other…please specify……………………………………………..

7. How much money do you invest in insurance a year ?

i) 10,000 to 15,000 ii) 15,001 to 20,000
iii) 20,001 to 25,000 iv) 25,001 to 30,000
v)other….please specify…………………………………………………….

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7. In which company you believe most ?
i) Private insurance company ii) Public insurance company

9. What attract you more in insurance?

i) Bonus ii) Generated Bonus
iii) Return depend on market iv) Brand of he company
iv) Others..Please specify………………………………………………..

10. Do you think that insurance is necessary in today’s life?

i) Yes ii) No iii) Can’t say

Any Suggestion………………………………………………………

Signature: Date:

Thank you for Your Cooperation

BIBLIOGRAPHY

1. BOOKS/MAGAZINES REFFERED:

 STUDY GUIDE- PRINCILES & PRACTICES OF LIFE /

GENERALINSURANCE, by AIMA.

 BOOKS PUBLISHED BY INSURANCE INSTITUTE OF INDIA

34
  SALES MANEGEMENT BY S.L.GUPTA

 LIFE-INSURANCE, by Mc GILL

 INSURANCEWATCH.

 MONEYOUTLOOK.

2. WEBSITES REFFERED:

 WWW.RELIANCELIFE.CO.IN

WWW.CIFAINSURANCE.COM
WWW.MONEYOUTLOOK.COM
WWW.INSURANCE.IND.COM
 WWW.IRDA.COM

3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE

INDUSTRY…. May 2010.

BRIEF PROFILE OF LIC, INDIA…Dec 2010.REPORT: COPING WITH

COMPETITION…Jan2009

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