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HDFC Standard Life
Insurance
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Today there are many insurance products available in the market. Each company
has its set of products that it offers to the customers. This makes it difficult to keep track
of all the products all the time. A better way to understand them is by way of
classification. All insurance products can be classified in 4 basic categories.
This classification is based on the needs of the customers. Accordingly each of
these categories has an end need to be satisfied and all the products coming under that
category aim to fulfill that need e.g. Products coming under Investment category aim to
provide long term real growth over the period. Thus understanding these categories will
not only help us to understand various products but also help us to position our products
strongly in a competitive market. Let us take a look at the distinctive features of each
category.
Protection type of products:A typical protection type of productaims at
protecting income-earning capacity of the customers on happening of uncertain
events mentioned above during the term of product. These are the pure risk
products having no savings element. Naturally, these products dont have any
maturity benefits. High-risk cover at low costs is the unique feature of this type
that makes this category most attractive for the prospects who want high
insurance cover without spending much for it. Usually offered for a definite term,
mainly the Term Assurances come under this type. Various riders offered by
different companies also a part of protection category. The claim is paid only if
the stipulated event happens otherwise there are no maturity values at the end of
the term. Youll also find variations when some companies offer to refund all the
premiums paid but these products still come under this category.
Protection Investment
Pension Savin s
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Investment type of products:In investment type of products, thefocus is
on maximizing returns for the customer over a period time. In a way, it is opposite
to Protection type where the focus is maximizing the risk cover. Here the risk
cover is very low. The objective is to put maximum in investments. The
underlying principle is to commit money for a certain period of time and get the
benefits of real long-term growth. The products are usually single premium
policies where the entire premium is collected in advance. Surrenders are
discouraged and there is a commitment for certain minimum no of years. In death
during the term, value of the investments is returned.
Pension products:This is another very popular type of product.Along with
the risk of an untimely death or disability, we also have a risk of living too long
outliving our source of income. In other words, one needs to ensure that he gets a
decent income even after his retirement and continues to get it as long as he lives!
This is where we have pension products addressing the need for a comfortable
retirement. One can opt for an immediate pension or for pension at a future date
(also called as deferred pension). There is a range of options that one can have
when selecting a pension plan. There is a great amount of flexibility when it
comes to selecting a pension product. The important point to be noted is that
Pensions is a part of ones present income that he reserves for future consumption.
Every year that income is accumulated and invested. The lump sum accumulation
then is used for purchasing pension on the vesting date.
Savings type products:People like to save. Our saving rate hasbeen well
above 20% of our GDP for last few years. They save for events like childrens
marriage, education etc. Savings types of products aim to strike a good balance
between risk cover as well as returns. It acts as a protection on savings. Sum
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Table Showcasing Financial Results:
Parameters
Apr-Mar
2005-06
(Rs. Cr.)
Apr-Mar
2006-07
(Rs. Cr.) % Growth
Total received premium 668.40 1532.21 129.23
i. New Business 486.15 1028.94 111.65
ii. Renewal 182.25 503.27 176.14
Effective Premium Income
(Total) 436.08 887.30 103.47
Group Business Premium
(EPI) 49.40 135.15
173.58
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Chapter- 2
Products of HDFC Standard Life Insurance
At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need.
We cater to both, individuals as well as to companies looking to provide benefits to their
employees. This section gives you details of all our products. We have incorporated
various downloadable forms and product details so that you can make an informed choice
about buying a policy.
Forindividuals, we have a range of protection, investment, pension and savings plans that
assist and nurture dreams apart from providing protection. You can choose from a range
of products to suit your life-stage and needs.
Fororganizations, we have a host of customized solutions that range from Group Term
Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable
plans apart from providing long-term value to the employees help in enhancing goodwill
of the company.]
INDIVIDUALS
We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping
this in mind, we have a varied range of Products that you can choose from to suit all your
needs. These will help secure your future as well as the future of your family.
Protection Plans
You can protect your family against the loss of your income or the burden of a loan in the
event of your unfortunate demise, disability or sickness. These plans offer valuable peace
of mind at a small price.
Our Protection range includes ourTerm Assurance Plan & Loan Cover Term Assurance
Plan.
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Investment Plans
OurSingle Premium Whole of Life plan is well suited to meet your long-term investment
needs. We provide you with attractive long-term returns through regular bonuses.
Pension Plans
Our Pension Plans help you secure your financial independence even after retirement.
Our Pension range includes ourPersonal Pension Plan, Unit Linked Pension, Unit Linked
Pension Plus
Savings Plans
Our Savings Plans offer you flexible options to build savings for your future needs such
as buying a dream home or fulfilling your childrens immediate and future needs.
Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit
Linked Endowment Plus, Money Back Plan, Childrens Plan, Unit Linked Youngstar,
Unit Linked Youngster Plus .
Individual products can be listed as follows:-
1-Protection Plans
=Term Assurance Plan
=Loan Cover Term Assurance Plan
2-Investment Plans
=Single Premium Whole of Life plan
=Personal Pension Plan
=Unit Linked Pension
=Unit Linked Pension Plus
3-Savings Plans
=Endowment Assurance Plan
=Unit Linked Endowment
=Unit Linked Endowment Plus
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=Money Back Plan
=Childrens Plan
=Unit Linked Youngster
=Unit Linked Youngster Plus.
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Details of these products are as under-
1-Protection Plans
Term Assurance Plan :-
"You have always ensured that your loved ones keep living a respectable life with their
heads held high. But life can be uncertain. As a prudent family man, you need to secure
your family's future and protect your pride and your family's self-respect. You need to
have a plan to take care of your family if something unfortunate were to happen to you.
With our Protection Plans, you can protect your family from uncertainties in life such as
your unfortunate death or critical illness. And ensure that your family lives a life of self-
respect and dignity even in your absence.
Protection Plans give you :
An ideal way to secure the financial future of your loved ones
High cover at a very nominal cost plus an option of adding optional benefits to
cover for other eventualities
A choice of two plans depending on your requirements
HDFC Term Assurance Plan : A pure risk cover plan, which gives you protection
against the uncertainties of life
HDFC Loan Cover Term Assurance Plan : An ideal way to cover your home loan
or any other loan liabilities
Choice of premium payment options-regular premium or a single one-time
premium
Choice of taking the plan on a single life basis or a joint life (first claim) basis.
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"You have always ensured that your loved ones keep living a respectable life with their
heads held high. But life can be uncertain. As a prudent family man, you need to secure
your family's future and protect your pride and your family's self-respect. You need to
have a plan to take care of your family if something unfortunate were to happen to you.
With our Protection Plans, you can protect your family from uncertainties in life such asyour unfortunate death or critical illness. And ensure that your family lives a life of self-
respect and dignity even in your absence
.
Our Protection Plans give you:
An ideal way to secure the financial future of your loved onesHigh cover at a very nominal cost plus an option of adding optional benefits to cover
for other eventualitiesA choice of two plans depending on your requirements HDFC Term Assurance Plan : A pure risk cover plan, which gives you
protection against the uncertainties of life
HDFC Loan Cover Term Assurance Plan : An ideal way to cover your home loan or any
other loan liabilities
Choice of premium payment options-regular premium or a single one-time premiumChoice of taking the plan on a single life basis or a joint life (first claim) basis
Highlights
Unique protection plan that helps you to safeguard your family by securing your
loan liability
Different types of loans can be covered under this
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The well- informed rightly said and proves how important investments are in todays date
and age. The question that we all fear is What about the risks attached?
GOOD NEWS for all the people who are anxious the same way! HDFC Standard Life
Insurance brings to you a safe investment plan that would take care of your savings and
nurture your earnings.
Highlights
HDFC Single Premium Whole Of Life Insurance Plan is a tailor-made
planwell suited to meet your long-term investment needs. This participating plan offers
you the following benefits:Whole of life plan aimed at providing long-term real growth of your money
Single premium investment planIn case of your unfortunate demise during the policy term, this participating (With
Profits) insurance plan will pay your family the Sum Assured and compound
Reversionary Bonuses, which are usually added annually. An additional Terminal
Bonus may be paid depending on the performance of the underlying investmentsDuring Guaranteed Surrender Periods you get the Sum Assured and all bonuses
vested as at the date of surrender
Personal pension plan
Today, you are busy climbing the ladder of success and realizing your dreams. Today,
time is with you. Just take a moment and think. Will you be able to continue at the same
pace? Will your income be the same forever? Will you be able to live life on your own
terms even after you retire?
We understand your need to build a secure future for yourself. Hence, the HDFC
Personal Pension Plan is an insurance policy that is designed to provide a post -
retirement income for life with the freedom to choose your retirement date.
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You can choose your premium, the Sum Assured and your retirement date. At the end of
the policy term, you will receive the Sum Assured plus any attaching bonus, which will
provide your post - retirement income.
The HDFC Personal Pension Plan is an insurance policy, which can benefit you in the
following ways:Provides a post retirement income in your golden years
Gives you the flexibility to plan your retirement date
Gives you tax benefits on your premiums
The plan receives simple Reversionary Bonuses, which are usually added annually. At
the end of the term, an additional Terminal Bonus may be paid depending on the
performance of the underlying investment.
Dont compromise on your self-respect, ever. Go ahead, hold your head high and enjoy
life with the HDFC Personal Pension Plan.
3 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose your retirement ageStep 2 Estimate the post retirement income you require.
Step 3 Work out the premium payable with your Financial Consultant.
Unit Linked Pension
Today, you are busy climbing the ladder of success and realizing your dreams. Today,
time is with you. Just take a moment and think. Will you be able to continue at the same
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place? Will your income be the same forever? Will you be able to live life on your own
terms even after you retire?
The HDFC Unit Linked Pension is an insurance policy that is designed to provide a
retirement income for life with the freedom to maximize your investment returns. Stride
into your golden years of retirement with dignity and pride.
The HDFC Unit Linked Pension gives you:
An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investmentsProvides a post retirement income for life.Gives you the flexibility to plan your retirement date.Gives you the freedom to invest premiums as per your preference.
You can choose your premium and the investment fund or funds. We will then invest
your premium, net of premium allocation charges in your chosen funds in the proportion
you specify. At the end of the policy term, you will receive the accumulated value of your
funds, which will be used to provide your pension income.
In the event of your unfortunate demise during the policy term, your spouse will receive a
cash lump sum to help him or her manage the retirement years.
Use HDFC Standard Lifes excellent investment options to maximize your savings &
secure your golden years. Dont compromise on self-respect, ever. Go ahead, hold your
head high and enjoy life with the HDFC Unit-Linked Pension.
All Unit Linked Life insurance plans are different from traditional insurance plans and
are subject to different risk factors.
HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked
Pension is the name of this plan. The name of our company and the name of our plan do
not, in any way, indicate the quality of the plan, its future prospects or returns
3 EASY STEPS TO YOUR OWN PLAN
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Step 1 Choose your retirement age.Step 2 Choose the premium you wish to invest, based on your retirement needs.Step 3 Choose the investment fund or funds you desire.
Unit Linked Pension Plus
Lead a life of respect and dignity. Even after retirement.
Today, you are busy climbing the ladder of success and realizing your dreams. Today,
time is with you. Just take a moment and think. Will you be able to continue at the same
pace? Will your income be the same forever? Will you be able to live life on your own
terms even after you retire?
The HDFC Unit Linked Pension Plus is an insurance policy that is designed to provide a
retirement income for life with the freedom to maximize your investment returns. Stride
into your golden years of retirement with dignity and pride.
The HDFC Unit Linked Pension Plus gives you:
An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investments
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RegularLoyalty Units to boost your fund value every yearProvides a post retirement income for life.Gives you the flexibility to plan your retirement date.Gives you the freedom to invest premiums as per your preference.
You can choose your premium and the investment fund or funds. We will then invest
your premium, net of premium allocation charges in your chosen funds in the proportion
you specify. At the end of the policy term, you will receive the accumulated value of your
funds, which will be used to provide your pension income.
In the event of your unfortunate demise during the policy term, your spouse will receive a
cash lump sum to help him or her manage the retirement years.
Use HDFC Standard Lifes excellent investment options to maximize your savings &
secure your golden years. Dont compromise on self-respect, ever. Go ahead, hold your
head high and enjoy life with the HDFC Unit-Linked Pension Plus.
All Unit Linked Life insurance plans are different from traditional insurance plans and
are subject to different risk factors.
HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked
Pension Plus is the name of this plan. The name of our company and the name of our plan
do not, in any way, indicate the quality of the plan, its future prospects or returns.
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Endowment Assurance Plan
Secure Your Familys Financial Independence.
You have given your family the very best. And there is no reason why they should not get
the very best in the future too. As a judicious family man, your priority is to secure the
well-being of those who depend on you. Not just for today, but also in the long term.
More importantly, you have to guard your loved ones against any eventuality. How will
they sustain their way of life, so lovingly built by you, in your absence?
With ourHDFC Endowment Assurance Plan, you can ensure that your family remains
financially independent, even if you are not around. You can ensure that they live a life of
respect and dignity. Always.
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The HDFCSL Endowment Assurance Plan gives you:
An ideal way to secure your long-term financial goalsValuable protection to your family by way of lump sum payment in case of your
unfortunate death within policy termProvides lump sum payment (basic Sum Assured plus any bonus additions) on
survival up to maturity date
Very flexible benefit options and payment options
In case of your unfortunate demise during the policy term, this participating (With
Profits) insurance plan will pay your family the Sum Assured (together with the attached
bonuses) you had chosen.
The plan receives simple Reversionary Bonuses, which are usually added annually. At
the end of the term, an additional Terminal Bonus may be paid depending on the
performance of the underlying investment.
3 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the amount of targeted savings and policy term using our Financial
Planning Tool.
Step 2 Choose from any one of the 4 additional benefit options as per your
requirement.Step 3 Work out the premium payable and Sum Assured with our Financial
Consultant.
Unit Linked Endowment
Invest in financial security and self-respect for you and your family.
You have given your family the very best. And there is no reason why they should not getthe very best in the future too. With HDFC Unit Linked Endowment, you can ensure that
your family remains financially independent, even if you are not around. You can ensure
that they live a life of respect and dignity. Always.
The HDFC Unit Linked Endowment Plan gives you:
An outstanding investment opportunity by providing a choice of thoroughly
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researched and selected investmentsValuable protection to your family in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity
You can choose your premium and the investment fund or funds. We will then invest
your premium, net of premium allocation charges in your chosen funds in the proportion
you specify. At the end of the policy term, you will receive the accumulated value of your
funds.
In case of your unfortunate demise during the policy term, we will pay the greater of your
Sum Assured (less any withdrawals you have made in the two years before your claim)
and your total fund value to your family.
Use HDFC Standard Lifes excellent investment options to maximize your savings &
secure your and your familys future. We will provide financial security for your family
in your absence.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to invest.Step 2 Choose the amount of protection (Sum Assured) you desire.Step 3 Choose the additional plan benefits you desire.Step 4 Choose the investment fund or funds you desire.
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Unit Linked Endowment Plus
Invest in financial security and self-respect for you and your family.
You have given your family the very best. And there is no reason why they should not get
the very best in the future too. With HDFC Unit Linked Endowment Plus, you can ensure
that your family remains financially independent, even if you are not around. You can
ensure that they live a life of respect and dignity. Always.
The HDFC Unit Linked Endowment Plus gives you:
An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investmentsRegularLoyalty Units to boost your fund value every year
Valuable protection to your family in case you are not aroundFlexible benefit combinations and payment options
Flexible additional benefit options such as critical illness cover
Access to your accumulated fund before maturity
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You can choose your premium and the investment fund or funds. We will then invest
your premium, net of premium allocation charges in your chosen funds in the proportion
you specify. At the end of the policy term, you will receive the accumulated value of your
funds.
In case of your unfortunate demise during the policy term, we will pay the greater of yourSum Assured (less any withdrawals you have made in the two years before your claim)
and your total fund value to your family.
Use HDFC Standard Lifes excellent investment options to maximize your savings &
secure your and your familys future. We will provide financial security for your family
in your absence.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to invest.Step 2 Choose the amount of protection (Sum Assured) you desire.Step 3 Choose the additional plan benefits you desire.Step 4 Choose the investment fund or funds you desire.
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Money Back Plan
Secure your financial independence. Live life on your own terms.
You have always believed in living life on your own terms. So why let the
changing realities of everyday life overwhelm you and make your aspirations take a back
seat? You can plan now to ensure that you have the necessary funds to meet your future
financial needs.
The HDFC Money Back Plan is a With Profit Plan that gives you:
LONG-TERM GOALS SHORT TERM GOALS
Provide adequate cover for Life, Critical
Illness or disability.
Buying a car
Saving for big-ticket assets like your
house.
Saving for your marriage
Saving for your childrens education Vacation abroad
Having a regular system for savings
A proportion of the basic Sum Assured as
cash lump sums at regular 5-year intervals
within the policy term (see the table given
below) an ideal way to secure your long-
term as well as short-term financial goals
A lump sum payment on survival up to
maturity date
Valuable protection to your family by way of
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lump sum payment in case of your
unfortunate death within the policy term.
This is over and above any earlier payouts
Key Benefits
Total
Policy
Term
Survival BenefitDeath
Benefit
5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs.
Within
Policy
Term
10 40%
60% +
Attaching
Bonuses
- - - - 100%
Sum
Assured
+
attaching
bonuses
(Over
and
above
the
earlier
payouts).
15 30% 30%
40% +
Attaching
Bonuses
- - -
20 25% 25% 25%
25% +
Attaching
Bonuses
- -
25 20% 20% 20% 20%
20% +
Attaching
Bonuses
-
30 15% 15% 15% 15% 15%
25% +
Attaching
Bonuses
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EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the amount of targeted savings and policy term using our
Financial Planning Tool.Step 2 Choose from any one of the 4 additional optional benefits as per your
requirement.Step 3 Work out the premium payable and Sum Assured with our Financial Consultant.
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Childrens Plan
Give your child the perfect start in life.
As a parent, your priority is your childs future and being able to meet your childs
dreams and aspirations. Today, providing a good education, establishing a professional
career or even a modest wedding is expensive. Costs are increasing fast. Just imagine
how much youll need when your child takes these important steps in life!
Plan today to ensure a bright future for your child. Start building savings today with our
HDFC Childrens Plan. So that your child is able to lead a life of respect and dignity with
a secured financial future.
The HDFC Children's Plan gives you:
Invaluable financial support to your childHelps you customize an ideal plan for your childProvides you multiple options for multiple benefits
The HDFC Childrens Plan is designed to secure your childs future by giving your child
(the beneficiary) a guaranteed lump sum, on maturity or in case of your unfortunate
demise, early in the policy term. The company to give you good long-term returns invests
the premiums, paid by you.
The plan receives simple Reversionary Bonuses, which are usually added annually. At
the end of the term an additional Terminal Bonus may be paid depending on the
performance of the underlying investment (See Bonuses for more details).
EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the amount of targeted savings and policy term using our Financial
Planning Tool.
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Step 2 Choose any one of the 3 plan options as per your child's requirement.Step 3 Work out the premium payable and Sum Assured with our Financial
Consultant.
Unit Linked Youngster
Invest in your childs dreams, and secure your self-respect.
As a parent, your priority is your childrens future and being able to meet their dreams
and aspirations. Today, providing a good education, establishing a professional career or
even a modest wedding is expensive. Costs are increasing fast. Just imagine how much
you will need when your children take these important steps in life.
Plan today to ensure a bright future for your children. Start building savings today with
our HDFC Unit Linked Young Star so that your child is able to lead a life of respect and
dignity with a secured financial future.
The HDFC Unit Linked Young Star gives you:
An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investments
Valuable protection to your child in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity
This means we will continue to make your savings on your behalf, in your absence. The
fund will be available for your familys use until the original Maturity Date. Use HDFC
Standard Lifes excellent investment options to maximize your savings & maximize your
childs achievements.
We will provide financial security for your child
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All Unit Linked Life insurance plans are different from traditional insurance plans and
are subject to different risk factors.
HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked
Young Star is the name of this plan. The name of our company and the name of our plan
do not, in any way, indicate the quality of the plan, its future prospects or returns.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to invest.Step 2 Choose the amount of protection (Sum Assured) you desire.Step 3 Choose the additional plan benefits you desire.Step 4 Choose the investment fund or funds you desire.
Unit Linked Youngster Plus .
Invest in your childs dreams, and secure your self-respect.
As a parent, your priority is your childrens future and being able to meet their dreams
and aspirations. Today, providing a good education, establishing a professional career or
even a modest wedding is expensive. Costs are increasing fast. Just imagine how much
you will need when your children take these important steps in life. Plan today to ensure
a bright future for your children. Start building savings today with our HDFC Unit
Linked Young Star Plus so that your child is able to lead a life of respect and dignity with
a secured financial future.
The HDFC Unit Linked Young Star Plus gives you:
An outstanding investment opportunity by providing a choice of thoroughly
researched and selected investmentsRegularLoyalty Units to boost your fund value every yearValuable protection to your child in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity
This means we will continue to make your savings on your behalf, in your absence. The
fund will be available for your familys use until the original Maturity Date. Use HDFC
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Standard Lifes excellent investment options to maximize your savings & maximize your
childs achievements.
We will provide financial security for your child.
All Unit Linked Life insurance plans are different from traditional insurance plans and
are subject to different risk factors.
HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked
Young Star Plus is the name of this plan. The name of our company and the name of our
plan do not, in any way, indicate the quality of the plan, its future prospects or returns.
4 EASY STEPS TO YOUR OWN PLAN
Step 1 Choose the premium you wish to invest.Step 2 Choose the amount of protection (Sum Assured) you desire.Step 3 Choose the additional plan benefits you desire.Step 4 Choose the investment fund or funds you desire.
Group Products
One-stop shop for employee-benefit solutions
HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit solutions
to their employees. We offer different products for different needs of employers rangingfrom term insurance plans for pure protection to voluntary plans such as superannuation
and leave encashment.
We now offer the following group products to our esteemed corporate clients:
Group Term InsuranceGroup Variable Term Insurance
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Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with
Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave
Encashment schemes of your companyAlso suitable for other employee benefit schemes such as salary saving schemes and wealth
management schemes
List of Group / Organizations product
Group Term Insurance
Group Variable Term Insurance
Gratuity
Superannuation orLeave Encashment
Group Term Insurance
Whatever the business Its the people who make it a success. Everybody requires some
type of life insurance, especially when others depend on them financially.
The Group Term Insurance (GTI) plan meets this need and serves as an ideal way for
companies to reinforce their bond with their employees. The sort of needs, you, as an
employer need to cater to could be in form of:
Employee benefits
Cover for housing or vehicle loans given by you to your employeesA GTI cover for future service gratuity liability to be taken along with the HDFC Group
Unit Linked PlanThe HDFC Group Term Insurance is a cost-effective plan that addresses these needs. In
addition you have the choice to opt for a GTI with an experience discount feature
("Profit Share"), where a discount is given on future premiums in case of favorable
claim experience (subject to group size).
The HDFC group term insurance plan will have the following structure:
One year renewable term insurance planOne master policy issued covering all members of the groupSum assured is payable on death (either due to natural causes or accidents)The plan covers death due to any cause; accidental or natural, and hence is more
comprehensive than Group Personal Accident Insurance. Several multinational
corporations, large Indian companies, foreign banks and software companies have
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already chosen the HDFC Group Term Insurance, an innovative product from HDFC
Standard Life Insurance, to protect their employees.
Optional Rider BenefitsAccidental Death BenefitTotal Permanent Disability
Total Permanent and Partial Disability BenefitCritical Illness BenefitTerminal Illness Benefit
Group Variable Term Insurance
The Group Variable Term Insurance is a tailor made insurance policy for third party
institutions. HDFC Standard Life Insurance Company will offer life insurance to
customers of one or more of the third partys specific products in order that in the event
of their death, there will be a lump sum available.The Group Variable Term Insurance:
On death, will pay a lump sum known as a sum assured. The sum assured varies
over time in order that the customer receives the cover that they needIs a group policyHas no lengthy underwriting procedureIs simple to administer
Claim Settlement process
Claim Settlements
The settlement of a claim arises due to Death of the Policyholder or due to Maturity of
the Policy.
Death Claim
In respect of a death claim an intimation regarding death of a policyholder from a
relative / nominee / or assignee is to be received.
The facts required to be submitted are:
1. Date of death,
2. Reason and Place of Death,
3. Full details of policies held by the Life assured should also be submitted.
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Death claims are categorized as Non-Early Death claims and Early Claims. The
procedure for processing these claims is different.
Non-early Death Claim:
Non-early Death Claims refer to death of the Life assured occurring after 3 years from
the date of commencement of policy or Date of last revival / reinstatement
If the policy is in force until death by regular payment of premiums, full sum assured is
payable along with bonus (if it is a with profit policy).
The following are the requirements for the settlement of the death claim:
Policy Document
Death Certificate from the appropriate authority
Legal evidence of Title, if the claimant is not an assignee / nominee
Abridged claim Form (3783/A)
Discharge Form in 3801, duly signed
Assignment / Reassignment deed, if any
Age proof, if age is not already admitted
Once these documents are received and if they are found in order, claim is settled and
payment is made to the person entitled to.
Early Claims:
Early Claims refer to the death of Life assured occurring within 3 years from
commencement of policy.
The following forms are to be submitted duly completed:
Claim Form B: Statement from the medical attendants who last treated the
deceased Life assured.
Claim form B1: certificate of treatment issued by the hospital authorities where
the deceased was treated last.
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Claim form E - certificate by the employer if the deceased was an employee.
Claim form C - certificate of burial/cremation signed by a person who attended
the funeral of the deceased.
Where death takes place due to accident, the death has to be reported to the police
and a FIR (First Information Report), police inquest report, and postmortem
report (if conducted only) are to be submitted.
Wherever death takes place within 2 years from Date of commencement an
enquiry is conducted to determine the genuineness of claim.
On the basis of these, the decisions to settle accidental benefits are taken.
Maturity:
If the life insured survives to the full term, then basic sum assured is payable. This
payment by the insurer to the insured on the date of maturity is called maturity payment.
In majority of the plans, full sum assured becomes payable along with Bonus as a
maturity payment, unless survivals benefits are paid earlier as in a money back policy.
At least 2 months before maturity date, information is sent to the life assured with a blank
discharge form for signature & completion by him. It is to be returned to the office along
with:
Original Policy document
Age proof if age not already submitted
Assignment /reassignment, if any.
Postdated cheques are submitted to the Life Insured on receipt of the above-mentioned
requirements.
Certain Relaxations in Settlements of the claims:
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Legally no claim is acceptable in respect of a lapsed policy or death of the Life assured
occurring within 3 years from the date of commencement of the policy. However, some
concessions are available and payment of claims are made -
If the Life assured had paid at least 3 years' premiums and thereafter if premiums
have not been paid, the nominees get proportionate paid up value. In the event of the death of the Life assured within 3 years and the policy is under
the lapsed position, nothing is payable.
Other concessions are:
If minimum 2 years premiums are paid and if death of Life assured occurs :
1. Within 3 months from the Date of first unpaid premium
Full sum assured along with bonus is payable subject to recovery of the premium
already fallen due and the premium that falls during the policy anniversary.
2. Between 3 to 6 months from fully unpaid premium
Only 50% of basic sum assured is payable. No bonus is paid and no arrears of
premium are received.
3. 6 months to 1 year from fully unpaid premium
Only notional paid up value is given
Loans On Policies
Policyholders are eligible to take loans on their policies subject to certain rules.
The policyholder has to apply for a loan in a prescribed form and submit the
Policy Bond along with the form duly completed.
The loan amount is calculated depending on the Surrender Value (SV) that the
policy would have acquired, and approximately 85% of the Surrender Value is
given as loan.
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Rate of interested charged on loans taken on insurance policies varies from
company to company and from time to time.
A policyholder can repay the loan amount either in part or in full, any time during
the term of the Policy. For LIC, the minimum repayment should be Rs. 50 and
thereafter in multiples of Rs. 10.
If the loan amount is not repaid during the term of the Policy or early claim, the
amount of loan plus interest, if any, will be deducted from the claim money
payable and the balance amount will be paid to the claimant. In case of LIC , if
the interest is not paid regularly every half year, then the interest is calculated on
compound interest basis.
If the premiums are not paid regularly, that is, if the policy is not kept in force,
there is a possibility that the loan amount along with accrued interest exceeds the
surrender value. At that stage, foreclosure action is taken on the policy.
Generally, plans for Children or special plans like Jeevan Griha and Deferred Annuity/
Pension Plans as well as Money Back Plans etc. are not eligible for loans.
Nomination:Nomination is the process of identifying a person to receive the policy
money in the event of the death of the Policyholder.
Nomination can be done at the inception of the Policy by providing details of
nominee in the proposal form. However, if the nomination is not given at the
beginning, the policyholder can give it later.
This nomination has to be effected by giving notice in a prescribed form to the
insurer and getting it endorsed on Policy Bond.
The Policyholder can do change of Nomination any time during the term of the
Policy and any number of times. For this, the policyholder has to give a notice ina prescribed form to the insurer and get it endorsed at the back of the Policy.
Further, the Policyholder can remove Nomination any time without giving prior
notice to the Nominee.
Nomination can be done only by a policyholder, who is a major, and on a policy
on his own life.
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Under Nomination, the Nominee gets only the right to receive the policy money
in the event of the death of the Policyholder.
Nomination does not pass on the property in the Policy.
If Nominee dies when the Policyholder is still surviving then the nomination
would be ineffective.
Nomination has no effect if the Policyholder is surviving.
If Nominee dies after the death of the policyholder but before receiving policy
money, then also Nomination becomes ineffective and only the Legal Heirs of the
Policyholder can claim money.
In the case of children policies, nomination is not done until the child becomes a
major. Section39 of Insurance Act 1938 governs nomination.
CHAPTER-3
INSURANCE IN INDIA
INTRODUCTION TO INSURANCE INDUSTRY
Insurance is as old as civilization. It has been developing from the family form of
insurance to mutual associations, stock exchange securities and again to state owned
organizations. Yogakshema has been the oldest term of insurance used in the Rig-
Veda for some kind of insurance.
The concept of formal insurance originated in the 12 th century in the form of
protection against financial loss to the seafarers involved in foreign trade. Growing
economic uncertainties caused by not only multiplicity of social, cultural, ethnic and
political factors but also natural calamities necessitated invention and development of
avenues capable of providing economic security to the bereaved family 8in the event of
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loss of bread earner. Thus began the concept of Life Insurance. With the development of
social security and the welfare status of the societies, the business of life insurance
assumed multidimensional. The disintegration in most of the societies, of the extended
family system, and ancient social institution, which provided a natural umbrella of
economic protection and emotional solace upon the death of the bread earner led to a
greater acceptability of the doctrine of life insurance and the growth of life insurance
industry around the globe. From a meager beginning of providing pecuniary protection
on the death earner, it has moved to become major vehicle in the financial planning for
both security and investment purpose. The industry hardly resembles 16 th or 17th century.
It would have been impossible to conceive then the development that has propelled
extensive changes in the product field, customer attitudes and market environment.
BENEFITS OF LIFE INSURANCE:
Superior To Any Other Savings Plan
Unlike any other savings plan, a life insurance policy provides full protection risk
of death. In the event of death of a policyholders, near and dear ones. In comparisons, any
other savings plan would amount to the total savings accumulated till date. If any other
incidence occurs prematurely, such savings can be much lesser than the sum assured.
Evidently, the potential financial loss to the family of the policyholder is cease able.
Encourages And Forces Thrift
A saving deposit can easily be withdrawn. The payment of life insurance
premium, however, is considered sacrosanct and is viewed with the same seriousness
as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings
about compulsory savings.
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Easy Settlement And Protection Against Creditors
A life insurance policy is the only financial instrument the proceeds of which can
be protected against the claims of a creditor of the assured by effecting a valid
assignment of the policy.
Administering the Legacy for Beneficiaries
Speculative or unwise expense can quickly cause the proceeds to be squandered.
Several policies have foreseen this possibility and provide for payments over a
period of years or in a combination of installation and lump sum amount.
A Ready Marketability and Suitability for Quick Borrowings
A life insurance policy can, after a certain time period (generally 3 years), be surrendered
for a cash value. The policy is also acceptable as a security for a commercial loan, for
example a student loan, it is particularly advisable for housing loans when an acceptable
policy may also cause the lending institution to give loan at lower interest rates.
Disability Benefits
Death is not the only hazard that is insured, many policies also provide disability
benefits. Typically, these provide for waiver of future premiums and payment of monthly
installment spread over certain time period.
Accident Death Benefits
Many policies can also provide for an extra sum to be paid (typically equal to the
sum assured) if death occurs because of accident.
Tax Relief
Under the Indian tax act, the following tax relies are available
1. 30% of the premium paid can be deductible from your total income-tax
liability.
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2. 100% of the premium paid is deductible from your total taxable income.
When these benefits are factored in, it is found that most policies offer return that are
comparable/or even better than older savings modes such as PPF, NSC etc. Moreover,
the cost of insurance is very negligible.
AN OVERVIEW OF THE INDUSTRY:
Life Insurance Market in India
Many may not be aware that the life insurance industry of India is as old as it is in any
other part of the world. The first Indian life insurance company was the Oriental Life
Insurance Company, which was started in India in 1818 at Kolkata. A number of players
(Over 250 in life and about 100 in non-life) mainly with regional focus flourished all
across the country. However, the Government of India, concerned by the unethical
Standards adopted by some players against the consumers, nationalized the industry in
Two phases in 1956 (life) and in 1972 (non-life). The insurance business of the country
was then brought under two public sector companies, Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India (GIC).
In line with the economic reforms that were ushered in India in early nineties, the
Government set up a Committee on Reforms (popularly called the Malhotra Committee)
In April 1993 to suggest reforms in the insurance sector. The Committee recommended
Throwing open the sector to private players to usher in competition and bring more
Choice to the consumer. The objective was to improve the penetration of insurance as a
Percentage of GDP, which remains low in India even compared to some developing
Countries in Asia.
Reforms were initiated with the passage of Insurance Regulatory and Development
Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority,
which has put in place regulations in line with global norms. So far in the private sector,
POTENTIAL OF INSURANCE MARKET IN INDIA
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By any yardstick, India, with about 200 million middle class households, presents a huge
untapped potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for global
insurance majors.
With the per capita income in India expected to grow at over 6% for the next 10 years
and with improvement in awareness levels, the demand for insurance is expected to grow
at an attractive rate in India. An independent consulting company, The Monitor Group
has estimated that the life insurance market will grow from Rs.218 billion in 1998 to
Rs.1003 billion by 2008 (a compounded annual growth of 16.5%).
WINDS OF CHANGE
Reforms have marked the entry of many of the global insurance majors into the Indian
Market in the form of joint ventures with Indian companies. Some of the key names are
AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and Old
Mutual. The entry of new players has rejuvenated the erstwhile monopoly player LIC,
which has responded to the competition in an admirable fashion by launching new
products and Improving service standards.
The following are the key winds of change brought about by
privatization.
Market Expansion:
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There has been an overall expansion in the market. This has been Possible due to
improved awareness levels thanks to the large number of advertising campaigns launched
by all the players. The scope for expansion is still unlimited as virtually all the players are
concentrating on large cities and towns - except by LIC to an extent there was no
significant attempt to tap the rural markets.
New Product Offerings:
There has been a plethora of new and innovative products offered by the new players,
mainly from the stable of their international partners. Customers have tremendous choice
from a large variety of products from pure term (risk) insurance to unit-linked investment
products. Customers are offered unbundled products with a variety of benefits as riders
from which they can choose. More customers are buying products and services based on
their true needs and not just traditional money-back policies, which is not considered very
appropriate for long-term protection and savings. However, there are still some key new
products yet to be introduced - e.g. health products.
Customer Service:
Not unexpectedly, this was one area that witnessed the most significant change with theentry of new players. There is an attempt to bring in international best practices in service
and operational efficiency through use of latest technologies. Advice and need based
selling is emerging through much better trained sales force and advisors. There is
improvement in response and turnaround times in specific areas such as delivery of first
policy receipt, policy document, premium notice, final maturity payment, settlement of
claims etc. However, there is a long way to go and various customer surveys indicate that
the standards are still below customer expectation levels.
Channels of Distribution:
Until two years back, the only mode of distribution of life insurance products was
through Agents. While agents continue to be the predominant distribution channel, today
a number of innovative alternative channels are being offered to consumers. Some of
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them are banc assurance, brokers, the Internet and direct marketing. Though it is too early
to predict, the wide spread of bank branch network in India could lead to banc assurance
emerging as a significant distribution mechanism.
A brief history of the Insurance sector
The business of life insurance in India in its existing form started in India in the year:
1818: with the establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the
year
1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the
general insurance business in India with effect from 1st January 1973.
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107 insurers amalgamated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.
Indian insurance industry
Life Insurers: Top 10
S.No. Registration
Number
Date of
Reg.
Name of the Company
1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 104 15.11.2000 Max New York Life Insurance Co. Ltd.
3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited
5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
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7 111 30.03.2001 SBI Life Insurance Company Limited .
8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited
9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited
10 117 06.08.2001 Metlife India Insurance Company Pvt. Ltd.
General Insurers : Top 6
S.No. Registration
Number
Date of
Registration
Name of the Company
1 102 23.10.2000 Royal Sundaram Alliance Insurance Company
Limited
2 103 23.10.2000 Reliance General Insurance Company Limited.
3 106 04.12.2000 IFFCO Tokio General Insurance Co. Ltd
4 108 22.01.2001 TATA AIG General Insurance Company Ltd.
5 113 02.05.2001 Bajaj Allianz General Insurance Company
Limited
6 115 03.08.2001 ICICI Lombard General Insurance Company
Limited.
http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.metlife.co.in/http://www.royalsundaramalliance.com/http://www.royalsundaramalliance.com/http://www.reliancegeneral.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.metlife.co.in/http://www.royalsundaramalliance.com/http://www.royalsundaramalliance.com/http://www.reliancegeneral.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/8/3/2019 Anil Project Amit
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INSURANCE BUSINEES:
Insurance business is divided into four classes:
1) Life Insurance
2) Fire Insurance
3) Marine Insurance and
4) Miscellaneous Insurance.
Life Insurers transact life insurance business; General Insurers transact the rest.
No composites are permitted as per law.
LEGISLATION (as on 1.4.2000):
Insurance is a federal subject in India. The primary legislation that deals with insurance
business in India is:
Insurance Act, 1938, and Insurance Regulatory & Development Authority Act, 1999.
INSURANCE PRODUCTS (as on 1.4.2000) (for latest information get in touch
with the current insurers website information of insurers is provided at the web page for
insurers ):
Life Insurance:
Popular Products: Endowment Assurance (Participating) and Money Back
(Participating). More than 80% of the life insurance business is from these products.
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General Insurance:
Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle insurance
is compulsory.
Tariff Advisory Committee (TAC) lays down tariff rates for some of the general
insurance products (please visit website ofGIC for details)
2001
New products have been launched by life insurers. These include linked-products. For
details, please visit the websites of life insurers.
INFORMATION
About the insurance industry, the following documents may be helpful:
Malhotra Committee Report (The Report of the Committee on Reforms in the Insurance
Sector);
IRDA's First Annual Report - 2001
ENTRY OF FOREIGN PLAYERS
As a few of these players are also in different areas of financial services, the revenue
figures do not relate only to insurance related income. However, most of the global
insurance majors wish to participate in the opening up of the industry in India. Players
like ING Group, Prudential of the U.K., Standard Life, Sun Life of Canada and Zurich
Financial Services have already made an entry into the asset management business in
India. Further, a few such as AIG, Allianz and Zurich Financial Services have started
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offering risk management services to Indian corporate. The entrants into the insurance
business in India can be divided into the following categories:
(i) Major international insurance groups, (ii) large private groups such as the Tatas, Birlas
and Reliance, who can enter the insurance industry on their own strength in terms of
funds, but who require technical/ managerial support from foreign participants; the
number of Indian groups belonging to this category is limited as insurance demands
substantial investment in ventures with long gestation periods. Such groups may involve
foreign insurance companies as they feel that this would be the best way to proceed, (iii)
Indian groups/companies which are not financially very strong but would still like to
enter this new field opening up. They can, however, enter the business only in joint
ventures with foreign insurance majors. The foreign majors would provide technical,
managerial and equity support. However, the amount of equity that would be required
over the years is substantial and given the fact that insurance projects have long gestation,
such groups may have difficulty in meeting fund requirements on their own at a later
date; (IV) banks and financial institutions such as State Bank of India and ICICI.
GUIDELINES FOR ENTRY OF INSURANCE
Commercial banks in India have a huge distribution network that cannot be matched by
other financial service organizations. Hence, commercial banks have been eyeing banc
assurance as a logical diversification. The Reserve Bank of India (RBI) has come out
with detailed guidelines on the entry norms of commercial banks into insurance.
For banks wanting to enter the insurance field, there are three options. Strong banks,
subject to eligibility norms, will be permitted to set up joint ventures for undertaking
insurance business with risk participation. The maximum equity contribution such a bank
would hold in the joint venture would normally be 50 per cent of the paid-up capital of
the insurance company. However, a higher level of equity contribution may be permitted,
subject to divestment of equity within the prescribed period.
Banks, which are not eligible as joint venture participants can make investments up to ten
per cent of the net worth of the bank or Rs. 50 crores, whichever is lower, in the
insurance company for providing infrastructure and services support. Such participation
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shall be treated as an investment and should be without any contingent liability for the
bank.
Finally, any scheduled commercial bank would be permitted to undertake insurance
business as agent of insurance companies on fee basis, without any risk participation.
Subsidiaries of banks will also be allowed to undertake distribution of insurance products
on agency basis. However, it may be added here that marketing/ selling of insurance
products is different from banking products, hence the selling techniques will be
different.
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HDFC - Standard Life
HDFC Standard Life Insurance HDFC Standard Life
Insurance Company is a joint venture between India's
largest housing finance provider, HDFC and Europe's
largest mutual life assurance company - The Standard
Life Assurance Company (U. K).
HDFC Standard Life Insurance Company Limited is the First Private Sector Life
Insurance Company to be granted a license.
Foreign Partner: Standard Life, UK
Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance
industry for 175 years by combining sound financial judgments with integrity and
reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs. 5,
50,000 crore.
It is one of the very few insurance companies in the world to have received 'AAA' rating
from two of the leading international credit rating agencies, Moody's and Standard &
Poor's. Standard Life was recently voted 'Company of the Decade' in U.K. by the
Independent Brokers called IFAs.
ICICI Prudential Life Insurance
ICICI Prudential Life Insurance is a joint
venture between the ICICI Group and
Prudential plc, of the UK. ICICI started its
operations in 1955 with providing finance
for industrial development, and since then it has diversified into housing finance,
consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture
Life Insurance.
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Foreign Partner:
Established in 1848, Prudential plc. of U.K. has grown to be the largest life insurance and
mutual fund company in U.K. Prudential plc. has had its presence in Asia for the past 75
years catering to over 1 million customers across 11 Asian countries.
Prudential is the largest life insurance company in the United Kingdom (Source: S&P's
UK Life Financial Digest, 1998).
ICICI and Prudential came together in 1993 to provide mutual fund products in India and
today are the largest private sector mutual fund company in India.
Their latest venture ICICI Prudential Life plans to take care of the insurance needs at
various stages of life.
OM Kotak Mahindra Life Insurance
Established in 1985 as Kotak Capital ManagementFinance promoted by Uday Kotak the company has
come a long way since its entry into corporate finance. It has dabbled in leasing, auto
finance, hire purchase, investment banking, consumer finance, broking etc. The company
got its name Kotak Mahindra as industrialists Harish Mahindra and Anand Mahindra
picked a stake in the company. Kotak Mahindra is today one of India's leading Financial
Institutions.
Old Mutual
Old Mutual plc is an international financial services group based in London with
expanding operations in life assurance, asset management, banking and general
insurance. Old Mutual is listed on the London Stock Exchange (where it is included on
the FTSE 100 Index) and also on the South African, Namibian, Malawi and Zimbabwe
stock exchanges. It has 156 years of experience in the life insurance business.
OM Kotak Mahindra
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OM Kotak Mahindra is the coming together of Kotak Mahindra Finance Ltd., and Old
Mutual plc to enter the Indian insurance arena to offer a wide range of innovative life
insurance products.
Royal Sundaram Alliance Insurance Co. Ltd
Royal Sundaram marks the coming together of Sundaram Finance; one of Indias most
respected and trusted finance companies, and Royal and Sun Alliance, one of the largest
insurance groups in the world. Royal Sundaram aims to bring the customer innovative
products, developed and delivered on par with international standards. This vision is built
on the foundation of expertise and superior service laid by the parent companies, well
known as they are of creating benchmarks in customer loyalty and satisfaction.
Sundaram Finance
Founded in 1954, Sundaram Finance is one of Indias leading finance companies. Quality
in lending, transparency in transactions, caring for the customer and commitment to be
the best, have made Sundaram Finance one of the most respected finance companies in
India. From being a leader in automobile financing, Sundaram Finance has expanded its
range of financial services and products to encompass deposits, leasing, mutual funds and
housing finance.
Tata AIG General Insurance Company
The Tata AIG joint venture is a tie up between the established Tata Group
and American International Group Inc. The Tata Group is one of the largest
and most respected industrial houses in the country, while AIG is a leading
US based insurance and financial services company with a presence in over
130 countries and jurisdictions around the world.
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Max New York Life
Max India:
Max India Limited is a multi-business corporation thathas business interests in telecom services, bulk
pharmaceuticals, electronic components and specialty
products. it is also the service-oriented businesses of
healthcare, life insurance and information technology.
New York Life:
New York Life has grown to be a Fortune 100 company and an expert in life insurance. It
was the first insurance company to offer cash dividends to policy owners. In 1894, New
York Life pioneered the then unheard-of concept of insuring women at the same rate as
men. Thereafter, it continued to introduce a series of firsts - a disability benefit clause in
1920, unemployment insurance in 1992, and complete customer care on the Web in 1998.
Today New York Life has over US billion in assets under management and over 30,000
agents and employees worldwide. The October 2000 Fortune Survey named New York
Life amongst the top three most admired life and health insurance companies worldwide.
With over 3 million policyholders, New York Life is a leading provider of insurance in a
host of countries worldwide.
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Metropolitan Life
MetLife India proudly carries a 135-year-old legacy
of helping build financial freedom for everyone.
Metropolitan Life Insurance Company ("MetLife"), a
subsidiary of MetLife, Inc. (NYSE: MET), is a
leading provider of insurance and other financial services to individual and institutional
customers. The MetLife Companies serve approximately 12 million individuals in the
U.S. and companies and institutions with 33 million employees and members, including
88 of the Fortune 100 companies. MetLife also has, through its subsidiaries and affiliates,
international insurance operations in 12 countries.
The Joint Venture
MetLife India Insurance Company Private Limited ("MetLife India") is the Indian
affiliate of Metropolitan Life Insurance Company ("MetLife"), the number one life
insurer in the U.S, based on approximately US$ 2.4 trillion in life insurance in-force as of
December 31, 2002. MetLife India was incorporated in April 2001 as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M.
Pallonji and Co. Private Limited and other private investors.
MetLife India benefits from its affiliated company's 135-year old expertise and track
record of establishing successful operations in emerging markets, in addition to the
unique strengths of its Indian promoters. MetLife India offers a range of innovative
products and aims to build financial freedom for everyone. MetLife India is
headquartered in Bangalore and has offices in 9 cities and an additional 1,000-outreach
points through its distribution channel partners..
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About ING Vysya Life
ING Vysya Life Insurance Company Private
Limited entered the private life insurance industry
in India in September 2001, and in a short span of 18 months has established itself as a
distinctive life insurance brand with an innovative, attractive and customer friendly
product portfolio and a professional advisor force. It also distributes products in close
cooperation with its sister company ING Vysya Bank through Bancassurance. Currently,
it has over 3000 advisors working from 22 locations across the country and over 300
employees.
ING Vysya Life Insurance Company is headquartered at Bangalore and has established a
strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and Chennai. In
addition ING Vysya Life operates in Vizag, Vijaywada, Mangalore, Mysore, Pune,
Nagpur, Chandigarh, Ludhiana and Jaipur.
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Chapter 4
Insurance Regulatory & Development Authority (IRDA)
GOVERNMENT REGULATION
INSURANCE REGULATORY DEVELOPMENT ACT
(IRDA):
On the recommendation of the Malhotra Committee Indian
Parliament passed Insurance Regulatory Development Act.
(IRDA) in the year 1999. Government of India has set up oninterim Insurance Regulatory Authority (IRA) for proper monitoring and control of the
insurance industry. The IRA is headed by a chairman who also controller of insurance
and Chairman of IBC.
IRDA, for the time being prohibits 100% foreign equity in insurance. It requires the
Indian promoters to invest either wholly in an insurance venture or team up with a
foreign insurer with a cap of 26% of equity for a foreign partner. The Indian promoter is
permitted to divest only after 10 years to the Indian public, through a public offering of
shares, at which tune the equity structure will provide for equal participation between the
Indian and foreign partner with a share of 26% each in the share capital. IRA is a sole
authority responsible for awarding of licenses. There is no restriction on the number of
licenses and no composite license for life & non-life business.
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development
Authority (IRDA, which was constituted by an act of parliament) specify the composition
of Authority .The Authority is a ten-member authority consists of:
a chairman
5 whole-time members
4 part-time members
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IRDA proposals for new license are:
New players should commence business within 15-18 months.
Trafficking of licenses not to be permitted and shares are not Transferable without
approval.
REPORT 2000:
(General Insurance - Reinsurance) Regulations, 2000
In exercise of the powers conferred by Sections 114A of the Insurance Act, 1938(4 of
1938), the Authority in consultation with the Insurance Advisory Committee hereby
makes the following regulations, namely:
PRELIMINARY
1. Short title and commencement
These regulations may be called the Insurance Regulatory and Development Authority
(Reinsurance) Regulations, 2000 and are issued in pursuance of Section 114 of the Act.
They shall come into force from the date of its publication in the Official Gazette.
These regulations apply to all general insurers transacting direct insurance business.
The General Insurance Company
The business of general insurance is the monopoly of General Insurance Corporation of
India (GIC), owned by the Government of India. This entity is a single organization with
four subsidiaries. GIC was incorporated as a holding company in 1992 under the General
Insurance Act, 1972. The insurance business is subject to regulations under the Insurance
Act. 1938, and General Insurance Act, 1972. Being a fully owned subsidiary of GOI, the
paid-up capital of the GIC is fully subscribed by the govt. and GIC, in turn owns fully,
the paid-up capital of its four subsidiaries.
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Before nationalization in November, 1972, a number of Indian and many foreign
companies did general insurance business in India and this business was linked with their
branches abroad. In addition, LIC, some mutual companies and cooperative societies also
offered 68 Indian (including LIC) this product In fact, on the eve of nationalisation, and
45 non-Indian entities carried out insurance business in India. Nationalization saw the
business of all
National Insurance Co. Ltd.
New India Assurance Co. Ltd.
Oriental Fire and General Insurance Co. Ltd.
United India Insurance Co. Ltd.
These organizations absorbed by the General Insurance Company (GIC) with its four
subsidiaries viz. These subsidiaries carry out the entire general insurance business in the
country and cede 20% of it to GIC through the obligatory reinsurance premium on a
quota share basis. GIC's direct business is only in the form of aviation insurance.
The general insurance business is mainly of three types:
Marine,
Fire and miscellaneous
Miscellaneous.
As of now, fire insurance contributes the largest share in the business, although its share
has been going down. Miscellaneous business has been the growth area with health
insurance assuming increasing importance in terms of potential. Marine insurance is
relatively less important in India.
Acknowledging the trend of growth in miscellaneous business, GIC has recently come
out with a host of new policies/plans/schemes. Personal Accident Policy for Visitors in
Bank Premises, Mediclaim, Householders' Comprehensive Insurance Policy, Professional
Indemnity Insurance, insurance against liability and contingency for members of stock
exchanges and joint stock companies, Rejection Insurance on marine products, Nuclear
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Insurance Pool for insurance of nuclear power plants and other nuclear related risks, hut
insurance, and Personal Accident Insurance Social Security Scheme are examples of such
policies. GIC has also become active in mutual funds and housing as GIC Mutual Fund,
GIC Grih Vitta Ltd. Floating of Loss Prevention Association of India Ltd., and the
National Insurance Academy are some of the other long term customer friendly activities.
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.
Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the
insurance business and re-insurance business.
(2) Without prejudice to the generality of the provisions contained in sub-section1, the
powers and functions of the Authority shall include, -
Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
Protection of the interests of the policy holders in matters concerning
Assigning of policy, nomination by policy holders, insurable interest,
Settlement of insurance claim, surrender value of policy and other
Terms and conditions of contracts of insurance;
Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
Specifying the code of conduct for surveyors and loss assessors;
Promoting efficiency in the conduct of insurance business;
Promoting and regulating professional organizations connected with the insurance
and re-insurance business;
Levying fees and other charges for carrying out the purposes of this Act;
Calling for information from, undertaking inspection of, conducting
Enquiries and investigations including audit of the insurers,
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IRDA NOTIFICATION
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(LICENSING OF INSURANCE AGENTS) (AMENDMENT) REGULATIONS,
2002
F.No. IRDA/Reg./ 10/2002.-- In exercise of the powers conferred by section 42 and
section 114A of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with
the Insurance Advisory Committee, hereby makes the following regulations to amend the
Insurance Regulatory and Development Authority (Licensing of Insurance Agents)
Regulations, 2000, namely:-
1 (1) These regulations may be called the Insurance Regulatory and Development
Authority (Licensing of Insurance Agents) (Amendment) Regulations, 2002.
They shall come into force on the date of their publication in the Official Gazette.
In the Insurance Regulatory and Development Authority (Licensing of Insurance Agents)Regulations, 2000, after sub-regulation 3(2), the following sub-regulations 3(3) and 3(4)
shall be added:-
(3)The designated person shall grant or renew the licence within a period of 3
months from the date of application.
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