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Field Study in Insurance Sector

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					PROJECT REPORT ON




         FIELD STUDY IN INSURANCE SECTOR




             DECLARATION BY THE LEARNER




                                           PREFACE
                         1
Practical studies form an integral part of the P.G.D.B.A. program. Only classroom training
without any practice is of no use. As it is said:



                     “Theory without practice has no fruit.
                      Practice without theory has no root”

The proverb is enough to understand the interdependence of theory and practical on each other.
Teaching gives on insight into the theoretical aspects of management, but implementation of
theory gives practical knowledge of the management field.

In report writing various skills like analytical skills, communication skills, group behavior skills
etc. are used. By writing reports students can learn all these skills. This is the reason why the
practical studies are included in P.G.D.B.A Program.

Before I present this report, I would like to say that, it is a mirror on a reflection of whatever I
observed and came through during my project training.




                                                             ACNOWLEDGEMENT

                                                 2
The main purpose of practical training is to make additional industrial world business practice. I
was fortunate enough to get support from a large number of persons to whom I shall always
remain thankful.

I would like to express my sincere gratitude towards “ICICI Prudential Life Insurance Co.” for
providing me the opportunity to undergo industrial training in their reputed organization.

I pay thanks to Mr. Vimal Dhamija (Branch Manager) and Mr. Manish Gupta (Manager) of
“ICICI Prudential Life Insurance Co.” for their help and I am also thankful to all the staff that
directly or indirectly supported me.

I would like to express my sincere ineptness to my Project Guide for his constant guidance and
valuable support during the project work. Encouragement and excellent guidance in the
successful completion of the project work.

And of course, I wish to take this opportunity to express my sincere gratitude to my parents, for
their unconditional support and encouragement throughout the project. I would also like to
express my thanks to my brother, for their much support during my project, and God almighty to
shower blessing on me.




                                                       OBJECTIVE OF THE STUDY

                                                3
Management as a profession can’t be taught merely in the four walls of classrooms. Only
theoretical knowledge is not sufficient to build competitive managers. Practical knowledge of the
business environment is equally important.

In today business world, insurance sector is running towards its booming stage. This industry
still has many things to come up to, so many changes and opportunities will be given by
insurance industry. So I choose insurance industry for my project report in P.G.D.B.A.

I choose ICICI Prudential Life Insurance is one of those private insurance players who entered
the market before few years and made its own place among all its competitors.

This report is shows insurance sector & how insurance is most important part of life. And
understand insurance definitions, different providers of life insurance and comparisons. It also
shows ICICI Prudential Life Insurance’s Products.

As a Trainee ICICI Prudential Life Insurance give me very practical knowledge about life
insurance and how to working in organization, How manage work, how to maintain relations
with top level management as well as colleges and bottom level management. So, this experience
will helpful in future. I am pleased by taken training at India’s one of the best insurance
company.




                                                                TABLE OF CONTENT

                                               4
Sr                              Content’s         Page No.
1    Preface                                      4
2    Acknowledgement                              5
3    Objective of the Study                       6
4    Introduction                                 8
5    Company Profile:                             26
          ICICI Group                            26
          Prudential Plc                         28
          ICICI Pru Life Insurance               29
          Management                             31
          Company Name & Address                 32
6    Company’s Products                           33
7    Finance Department                           75
8    Research Design & Methodology                81
9    Questionnaire                                90
10   SWOT Analysis                                94
11   Conclusion                                   95
12   Bibliography                                 96




                                            INTRODUCTION

                                       5
    INSURANCE:



Insurance or assurance, device for indemnifying or guaranteeing an individual against loss.
Reimbursement is made from a fund to which many individuals exposed to the same risk have
contributed certain specified amounts, called premiums. Payment for an individual loss, divided
among many, does not fall heavily upon the actual loser. The essence of the contract of
insurance, called a policy, is mutuality. The major operations of an insurance company are
underwriting, the determination of which risks the insurer can take on; and rate making, the
decisions regarding necessary prices for such risks. The underwriter is responsible for guarding
against adverse selection, wherein there is excessive coverage of high risk candidates in
proportion to the coverage of low risk candidates. In preventing adverse selection, the
underwriter must consider physical, psychological, and moral hazards in relation to applicants.
Physical hazards include those dangers which surround the individual or property, jeopardizing
the well-being of the insured. The amount of the premium is determined by the operation of the
law of averages as calculated by actuaries. By investing premium payments in a wide range of
revenue-producing projects, insurance companies have become major suppliers of capital, and
they rank among the nation's largest institutional investors.



GENERAL DEFINITION:

The general definitions are given by the social scientists & they consider insurance as a device to
protection against risks, or a provision against inevitable contingencies or a co-operative device
of spreading risks. Some of such definitions are given below:

    In the words of John Magee, “Insurance is a plan by which large number of people
     associate themselves & transfer to the shoulder of all, risks that attach to individuals.”
    In the words of Sir William Bevridges, “The collective bearing of risks is insurance.”
    In the words of Boone & Kurtz, “Insurance is a substitution for a small known loss (the
     insurance premium) for a large unknown loss, which may or may not occur.”
    In the words of Thomas, “Insurance is a provision, which a prudent man makes against
     for the loss or inevitable contingencies, loss or misfortune.”
    In the words of Allen Z. Mayerson, “Insurance is a device for the transfer to an insurer of
     certain risks of economic loss that would otherwise come by the insured.”
    In the words of Ghosh & Agarwal, “Insurance is a co-operative form of distributing a
     certain risk over a group of persons who are exposed to it.”




                                                6
FUNDAMENTAL STATEMENT:



These are based on economic or business oriented since it is a device providing financial
compensation against risk or misfortune.

    In the words of D. S. Harsell, “Insurance may be defined as a social device providing
     financial compensation for the effects of misfortune, the payments being made from the
     accumulated contribution of all parties participating in the scheme.”
    In the words of Robert I. Mehr & Emerson Cammark, “Insurance is purchased to offset
     the risk resulting from hazards, which exposes a person to loss.”
    In the words of Riegel & Miller, “Insurance is a social device whereby the uncertain risks
     of individuals may be combined in a group & thus made more certain small periodic
     contributions, by the individuals providing a fund, out of which, those who suffer losses
     may be reimbursed.”

   Characteristics of Insurance:

       Sharing of Risks

   Insurance is a co-operative device to share the burden of risk, which may fall on happening
   of some unforeseen events, such as the death of head of the family, or on happening of
   marine perils or loss of by fire.

       Co-operative Device

   Insurance is a co-operative form of distributing a certain risk over a group of persons who are
   exposed to it (Ghosh & Agarwal). A large number of persons share the losses arising from a
   particular risk.

       Evaluation of Risk

   For the purpose of ascertaining the insurance premium, the volume of risk is evaluated,
   which forms the basis of insurance contract.

       Payment of happening of specified event

   On happening of specified event, the insurance company is bound to make payment to the
   insured. Happening of the specified event is certain in life insurance, but in the case of fire,
   marine or accidental insurance, it is not necessary. In such cases, the insurer is not liable for
   payment of indemnity.



       Amount of payment

                                                7
The amount of payment in indemnity insurance depends on the nature of losses occurred,
subject to a maximum of the sum insured. In life insurance, however, a fixed amount is paid
on the happening of some uncertain event or on the maturity of the policy.

    Large number of insured persons

The success of insurance business depends on the large number of persons insured against
similar risk. This will enable the insurer to spread the losses of risk among large number of
persons, thus keeping the premium rate at the minimum.

    Insurance is not a gambling

Insurance is not a gambling. Gambling is illegal, which gives gain to one party & loss to the
other. Insurance is a valid contract to indemnity against losses. Moreover, insurable interest
is present in insurance contracts & it has the element of investment also.

    Insurance is not charity

Charity pays without consideration but in the case of insurance, premium is paid by the
insured to the insurer in consideration of future payment.

    Protection against risks

Insurance provides protection against risks involved in life, materials & property. It is a
device to avoid or reduce risks.

    Spreading of risk

Insurance is a plan, which spread the risks & losses of few people among a large number of
people. John Magee writes, “Insurance is a plan by which large number of people associates
themselves & transfer to the shoulders of all, risks attached to individuals.”

    Transfer of risk

Insurance is a plan in which the insured transfers his risk on the insurer. This may be the
reason that Mayerson observes, that insurance is a device to transfer some economic losses to
the insurer, and otherwise such losses would have been borne by the insured themselves.

    Ascertaining of losses

By taking a life insurance policy, one can ascertain his future losses in terms of money. This
is done by the insurer to determining the rate of premium, which is calculated on the basis of
maximum risks.

    A contract


                                            8
   Insurance is a legal contract between the insurer & insured under which the insurer promises
   to compensate the insured financially within the scope of insurance policy, & the insured
   promises to pay a fixed rate of premium to the insurer.

        Based upon certain principle

   Insurance is a contract based upon certain fundamental principles of insurance, which
   includes utmost good faith, insurable interest, contribution, indemnity, causa proxima,
   subrogation, etc., which are the basis for successful operation of insurance plan.

        Utmost Good Faith

   Insurance is a contract based on good faith between the parties. Therefore, both the parties
   are bound to disclose the important facts affecting to the contract before each other. Utmost
   good faith is one of the important principles of insurance.

   To conclude, insurance is a device for the transfer of risks from the insured to the insurers,
   who agree to it for a consideration (known as premium), & promises that the specified extent
   of loss suffered by the insured shall be compensated. It is a legal contract of a technical
   nature.



    The History of Insurance in the world:

The roots of insurance might be traced to Babylonia, where traders were encouraged to assume
the risks of the caravan trade through loans that were repaid (with interest) only after the goods
had arrived safely a practice resembling bottomry and given legal force in the Code of
Hammurabi (c.2100 B.C.). The Phoenicians and the Greeks applied a similar system to their
seaborne commerce. The Romans used burial clubs as a form of life insurance, providing funeral
expenses for members and later payments to the survivors.

With the growth of towns and trade in Europe, the medieval guilds undertook to protect their
members from loss by fire and shipwreck, to ransom them from captivity by pirates, and to
provide decent burial and support in sickness and poverty. By the middle of the 14th cent., as
evidenced by the earliest known insurance contract (Genoa, 1347), marine insurance was
practically universal among the maritime nations of Europe. In London, Lloyd's Coffee House
(1688) was a place where merchants, ship-owners, and underwriters met to transact business. By
the end of the 18th cent. Lloyd's had progressed into one of the first modern insurance
companies. In 1693 the astronomer Edmond Halley constructed the first mortality table, based on
the statistical laws of mortality and compound interest. The table, corrected (1756) by Joseph
Dodson, made it possible to scale the premium rate to age; previously the rate had been the same
for all ages.


                                                9
Insurance developed rapidly with the growth of British commerce in the 17th and 18th cent.
Prior to the formation of corporations devoted solely to the business of writing insurance,
policies were signed by a number of individuals, each of whom wrote his name and the amount
of risk he was assuming underneath the insurance proposal, hence the term underwriter. The first
stock companies to engage in insurance were chartered in England in 1720, and in 1735, the first
insurance company in the American colonies was founded at Charleston, S.C. Fire insurance
corporations were formed in New York City (1787) and in Philadelphia (1794). The Presbyterian
Synod of Philadelphia sponsored (1759) the first life insurance corporation in America, for the
benefit of Presbyterian ministers and their dependents. After 1840, with the decline of religious
prejudice against the practice, life insurance entered a boom period. In the 1830s the practice of
classifying risks was begun.

The New York fire of 1835 called attention to the need for adequate reserves to meet
unexpectedly large losses; Massachusetts was the first state to require companies by law (1837)
to maintain such reserves. The great Chicago fire (1871) emphasized the costly nature of fires in
structurally dense modern cities. Reinsurance, whereby losses are distributed among many
companies, was devised to meet such situations and is now common in other lines of insurance.
The Workmen's Compensation Act of 1897 in Britain required employers to insure their
employees against industrial accidents. Public liability insurance, fostered by legislation, made
its appearance in the 1880s; it attained major importance with the advent of the automobile.

In the 19th cent. many friendly or benefit societies were founded to insure the life and health of
their members, and many fraternal orders were created to provide low-cost, members-only
insurance. Fraternal orders continue to provide insurance coverage, as do most labor
organizations. Many employers sponsor group insurance policies for their employees; such
policies generally include not only life insurance, but sickness and accident benefits and old-age
pensions, and the employees usually contribute a certain percentage of the premium.

Since the late 19th cent. there has been a growing tendency for the state to enter the field of
insurance, especially with respect to safeguarding workers against sickness and disability, either
temporary or permanent, destitute old age, and unemployment (see social security). The U.S.
government has also experimented with various types of crop insurance, a landmark in this field
being the Federal Crop Insurance Act of 1938. In World War II the government provided life
insurance for members of the armed forces; since then it has provided other forms of insurance
such as pensions for veterans and for government employees.

After 1944 the supervision and regulation of insurance companies, previously an exclusive
responsibility of the states, became subject to regulation by Congress under the interstate
commerce clause of the U.S. Constitution. Until the 1950s, most insurance companies in the
United States were restricted to providing only one type of insurance, but then legislation was
passed to permit fire and casualty companies to underwrite several classes of insurance. Many
firms have since expanded, many mergers have occurred, and multiple-line companies now

                                               10
dominate the field. In 1999, Congress repealed banking laws that had prohibited commercial
banks from being in the insurance business; this measure was expected to result in expansion by
major banks into the insurance arena.

In recent years insurance premiums (particularly for liability policies) have increased rapidly,
leaving unprecedented numbers of Americans uninsured. Many blame the insurance
conglomerates, contending that U.S. citizens are paying for bad risks made by the companies.
Insurance companies place the burden of guilt on law firms and their clients, who they say have
brought unreasonably large civil suits to court, a trend that has become so common in the United
States that legislation has been proposed to limit lawsuit awards. Catastrophic earthquakes,
hurricanes, and wildfires in late 1980s and the 90s have also strained many insurance company's
reserves.



    HISTORY OF INSURANCE SECTOR IN INDIA

The insurance sector in India has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again.

Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed
over a period of almost 190 years.

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.


                                                11
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.

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.

•      LIC Housing Finance.

•      Cholamandalam General Insurance

•      Glaxosmithkline Consumers

•      American Express



     Indian Insurance Market-History:

Insurance has a long history in India. Life Insurance in its current form was introduced in 1818
when Oriental Life Insurance Company began its operations in India. General Insurance was
however a comparatively late entrant in 1850 when Triton Insurance company set up its base in
Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre
Nationalisation b) Nationalisation and c) Post Nationalsiation.

Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was
formed by consolidating the operations of various insurance companies.

General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of
India was set up as the controlling body with New India, United India, National and Oriental as
its subsidiaries. The process of opening up the insurance sector was initiated against the
background of Economic Reform process which commenced from 1991. For this purpose
Malhotra Committee was formed during this year who submitted their report in 1994 and
Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian


                                               12
Insurance was opened for private companies and Private Insurance Company effectively started
operations from 200

    Insurance Market Present

The insurance sector was opened up for private participation four years ago. For years now, the
private players are active in the liberalized environment. The insurance market have witnessed
dynamic changes which includes presence of a fairly large number of insurers both life and non-
life segment. Most of the private insurance companies have formed joint venture partnering well
recognized foreign players across the globe

Capital requirement and foreign participation.

Minimum capital requirement for direct life and Non-life Insurance company is INR1000 million
and that for reinsurance company is INR2000 million. A maximum 26% foreign equity stake is
allowed in direct insurance and reinsurance companies. In the 2004-05 budget, the Government
proposed for increasing the foreign equity stake to 49%, this is yet to be effected. There are
currently fourteen non-life insurance companies, out of which two are specialized Insurance
companies viz. Agricultural Insurance Co, who handles Crop Insurance business and Export
Credit Guarantee Corporation which only transacts export Credit Insurance. There are a total of
13 life insurance companies operating in India, of which one is a Public Sector Undertaking and
the balance 12 are Private Sector Enterprises.

Fifth largest number of life insurance policies in force in the world, Insurance happens to be a
mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and
presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per
cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds
available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And this part of
the population is also subject to weak social security and pension systems with hardly any old
age income security. This itself is an indicator that growth potential for the insurance sector is
immense.

A well-developed and evolved insurance sector is needed for economic development as it
provides long term funds for infrastructure development and at the same time strengthens the risk
taking ability. It is estimated that over the next ten years India would require investments of the
order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain economic growth of the country.

Insurance is a federal subject in India. There are two legislations that govern the sector- The
Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full


                                                 13
circle from being an open competitive market to nationalisation and back to a liberalised market
again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries.

    Insurance Sector Reforms

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N.
Malhotra- was formed to evaluate the Indian insurance industry and recommend its future
direction.The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector. The reforms were aimed at creating a more efficient and
competitive financial system suitable for the requirements of the economy keeping in mind the
structural changes currently underway and recognising that insurance is an important part of the
overall financial system where it was necessary to address the need for similar reforms. In 1994,
the committee submitted the report and some of the key recommendations included:

   i)      Structure Government stake in the insurance Companies to be brought down to 50%.
           Government should take over the holdings of GIC and its subsidiaries so that these
           subsidiaries can act as independent corporations. All the insurance companies should
           be given greater freedom to operate.
   ii)     Competition Private Companies with a minimum paid up capital of Rs.1bn should be
           allowed to enter the sector. No Company should deal in both Life and General
           Insurance through a single entity. Foreign companies may be allowed to enter the
           industry in collaboration with the domestic companies. Postal Life Insurance should
           be allowed to operate in the rural market. Only one State Level Life Insurance
           Company should be allowed to operate in each state.
   iii)    Regulatory Body The Insurance Act should be changed. An Insurance Regulatory
           body should be set up. Controller of Insurance- a part of the Finance Ministry- should
           be made independent
   iv)     Investments Mandatory Investments of LIC Life Fund in government securities to be
           reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in
           any company (there current holdings to be brought down to this level over a period of
           time)
   v)      Customer Service LIC should pay interest on delays in payments beyond 30 days.
           Insurance companies must be encouraged to set up unit linked pension plans.
           Computerisation of operations and updating of technology to be carried out in the
           insurance industry.



The committee emphasised that in order to improve the customer services and increase the
coverage of insurance policies, industry should be opened up to competition. But at the same
time, the committee felt the need to exercise caution as any failure on the part of new players

                                               14
could ruin the public confidence in the industry. Hence, it was decided to allow competition in a
limited way by stipulating the minimum capital requirement of Rs.100 crores.

The committee felt the need to provide greater autonomy to insurance companies in order to
improve their performance and enable them to act as independent companies with economic
motives. For this purpose, it had proposed setting up an independent regulatory body- The
Insurance Regulatory and Development Authority.

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in
December 1999. The IRDA since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private sector
insurance companies. Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. The other decision taken simultaneously to
provide the supporting systems to the insurance sector and in particular the life insurance
companies was the launch of the IRDA online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their products.



    RESENT SCENARIO:

The Government of India liberalised the insurance sector in March 2000 with the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for
private players and allowing foreign players to enter the market with some limits on direct
foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign
partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in
India and this may also include restructuring and revitalizing of the public sector companies. In
the private sector 12 life insurance and 8 general insurance companies have been registered. A
host of private Insurance companies operating in both life and non-life segments have started
selling their insurance policies since 2001.

Non-Life Insurance Market:

In December 2000, the GIC subsidiaries were restructured as independent insurance companies.
At the same time, GIC was converted into a national re-insurer. In July 2002, Parliamant passed
a bill, delinking the four subsidiaries from GIC.

Presently there are 12 general insurance companies with 4 public sector companies and 8 private
insurers. Although the public sector companies still dominate the general insurance business, the
private players are slowly gaining a foothold. According to estimates, private insurance
companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of

                                               15
2002, the private companies booked premiums worth Rs 6.34 billion. Most of the new entrants
reported losses in the first year of their operation in 2001.

With a large capital outlay and long gestation periods, infrastructure projects are fraught with a
multitude of risks throughout the development, construction and operation stages. These include
risks associated with project implementaion, including geological risks, maintenance,
commercial and political risks. Without covering these risks the financial institutions are not
willing to commit funds to the sector, especially because the financing of most private projects is
on a limited or non- recourse basis.

Insurance companies not only provide risk cover to infrastructure projects, they also contribute
long-term funds. In fact, insurance companies are an ideal source of long term debt and equity
for infrastructure projects. With long term liability, they get a good asset- liability match by
investing their funds in such projects. IRDA regulations require insurance companies to invest
not less than 15 percent of their funds in infrastructure and social sectors. International Insurance
companies also invest their funds in such projects.

Insurance costs constitute roughly around 1.2- 2 percent of the total project costs. Under the
existing norms, insurance premium payments are treated as part of the fixed costs. Consequently
they are treated as pass-through costs for tariff calculations.

Premium rates of most general insurance policies come under the purview of the government
appointed Tariff Advisory Commitee. For Projects costing up to Rs 1 Billion, the Tariff
Advisory Committee sets the premium rates, for Projects between Rs 1 billion and Rs 15 billion,
the rates are set in keeping with the committee's guidelines; and projects above Rs 15 billion are
subjected to re-insurance pricing. It is the last segment that has a number of additional products
and competitive pricing.

Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead,
shouldering about 40-50 per cent of the risk and receiving a proportionate percentage of the
premium. The other companies share the remaining risk and premium. The policies are renewed
usually on an annual basis through the invitation of bids.

Of late, with IPP projects fizzling out, the insurance companies are turning once again to old
hands such as NTPC, NHPC and BSES for business.




Re-insurance business:

Insurance companies retain only a part of the risk (less than 10 per cent) assumed by them, which
can be safely borne from their own funds. The balance risk is re-insured with other insurers. In

                                                 16
effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the insurance
business. It helps to provide a better spread of risk in the international market, allows primary
insurers to accept risks beyond their capacity, settle accumulated losses arising from catastrophic
events and still maintain their financial stability.

While GIC's subsidiaries look after general insurance, GIC itself has been the major reinsurer.
Currently, all insurance companies have to give 20 per cent of their reinsurance business to GIC.
The aim is to ensure that GIC's role as the national reinsurer remains unhindered. However, GIC
reinsures the amount further with international companies such as Swissre (Switzerland),
Munichre (Germany), and Royale (UK). Reinsurance premiums have seen an exorbitant increase
in recent years, following the rise in threat perceptions globally.

Life Insurance Market:

The Life Insurance market in India is an underdeveloped market that was only tapped by the
state owned LIC till the entry of private insurers. The penetration of life insurance products was
19 percent of the total 400 million of the insurable population. The state owned LIC sold
insurance as a tax instrument, not as a product giving protection. Most customers were under-
insured with no flexibility or transparency in the products. With the entry of the private insurers
the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the
market in terms of premium income. The new business premiums of the 12 private players has
tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium
business has fallen.

Innovative products, smart marketing and aggressive distribution. That's the triple whammy
combination that has enabled fledgling private insurance companies to sign up Indian customers
faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving
device, are now suddenly turning to the private sector and snapping up the new innovative
products on offer.

The growing popularity of the private insurers shows in other ways. They are coining money in
new niches that they have introduced. The state owned companies still dominate segments like
endowments and money back policies. But in the annuity or pension products business, the
private insurers have already wrested over 33 percent of the market. And in the popular unit-
linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.

The private insurers also seem to be scoring big in other ways- they are persuading people to
take out bigger policies. For instance, the average size of a life insurance policy before
privatisation was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers
are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh-
way bigger than the industry average.

                                                17
Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding
the second phase of their expansion plans. No doubt the aggressive stance of private insurers is
already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new
customers.



    MALHOTRA COMMITTEE :



In 1993, the first step towards insurance sector reforms was initiated with the formation of
Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra.
The committee was formed to evaluate the Indian insurance industry and recommend its future
direction with the objective of complementing the reforms initiated in the financial sector.

Key Recommendations of Malhotra Committee:

Structure

• Government stake in the insurance Companies to be brought down to 50%.

• Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries
can act as independent corporations.

• All the insurance companies should be given greater freedom to operate.

Competition

• Private Companies with a minimum paid up capital of Rs.1billion should be allowed to enter
the industry.

• No Company should deal in both Life and General Insurance through a single Entity.

• Foreign companies may be allowed to enter the industry in collaboration with the domestic
companies.

• Postal Life Insurance should be allowed to operate in the rural market.

• Only one State Level Life Insurance Company should be allowed to operate in each state.

Regulatory Body

• The Insurance Act should be changed.

• An Insurance Regulatory body should be set up.



                                                18
• Controller of Insurance should be made independent.



Investments

• Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to
50%.

• GIC and its subsidiaries are not to hold more than 5% in any company.



Customer Service

• LIC should pay interest on delays in payments beyond 30 days

• Insurance companies must be encouraged to set up unit linked pension plans.

• Computerisation of operations and updating of technology to be carried out in the insurance
industry.

Malhotra Committee also proposed setting up an independent regulatory body - The Insurance
Regulatory and Development Authority (IRDA) to provide greater autonomy to insurance
companies in order to improve their performance and enable them to act as independent
companies with economic motives.

The Insurance Act, 1938:

      The Insurance Act, 1938 was the first legislation governing all forms of insurance to
provide strict state control over insurance business. You can download the act by clicking here

Life Insurance Corporation Act, 1956:

       Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that
life insurance in India was completely nationalized, through a Government ordinance; the Life
Insurance Corporation Act, 1956 effective from 1.9.1956 was enacted in the same year to, inter-
alias, form LIFE INSURANCE CORPORATION after nationalization of the 245 companies into
one entity. There were 245 insurance companies of both Indian and foreign origin in 1956.
Nationalization was accomplished by the govt. acquisition of the management of the companies.
The Life Insurance Corporation of India was created on 1st September, 1956, as a result and has
grown to be the largest insurance company in India as of 2006.

General Insurance Business (Nationalization) Act, 1972:




                                               19
        The General Insurance Business (Nationalization) Act, 1972 was enacted to nationalize the
100 odd general insurance companies and subsequently merging them into four companies. All
the companies were amalgamated into National Insurance, New India Assurance, Oriental
Insurance, United India Insurance which were headquartered in each of the four metropolitan
cities.

Insurance Regulatory and Development Authority (IRDA) Act, 1999:

       Till 1999, there were not any private insurance companies in Indian insurance sector. The
Govt. of India then introduced the Insurance Regulatory and Development Authority Act in
1999, thereby de-regulating the insurance sector and allowing private companies into the
insurance. Further, foreign investment was also allowed and capped at 26% holding in the Indian
insurance companies. In recent years many private players entered in the Insurance sector of
India. Companies with equal strength competing in the Indian insurance market. Currently, in
India only 2 million people (0.2 % of total population of 1 billion), are covered under Mediclaim,
whereas in developed nations like USA about 75 % of the total population are covered under
some insurance scheme. With more and more private players in the sector this scenario may
change at a rapid pace.



    Life Insurance Companies at a Glance:


   a) LIFE INSURANCE CORPORATION OF INDIA:

   On January 19, 1956 the President of the Indian Union issued an ordinance,
   providing for the taking over, in public interest, of the management of life insurance
   pending nationalization of such business, & the then Finance Minister explained the
   objectives of nationalization of life insurance business.
       In June 1956, the parliament passed a bill for nationalization of life insurance
       business in India and for setting up a corporation as the sole agency for carrying
       on this business in India. The corporation, set up under this Act, is known as
       “Life Insurance Corporation of India”, which started functioning on September 1,
       1956.

       For the purpose of servicing of policies issued before September 1, 1956, some
       integrated head offices & integrated branch office units were created. These
       offices have nothing to do with the policies issued by the corporation.
       Corporation also took over foreign life business of the Indian insurers.

        Objectives of LIC:

                                               20
        Maximize mobilization of people’s savings by making insurance – linked savings
         adequately attractive. Conduct business with utmost economy & with the full
         realization that the moneys belong to the policyholders.
        To publicize & extent the insurance business specifically in rural & remote areas.
        To provide suitable financial security at reasonable cost.
        To make the investments more dynamic by popularizing the savings plans
         attached with insurance.
        To invest the insurance fund keeping with maximum benefit & interest of
         insured’s.
        To run the insurance business at minimum administrative costs.
        To function as trusts of the insured’s.
        To fulfill the needs of the society in a changing social and economic environment.
        To make the employees collectively responsible for providing efficient services to
         the insured’s.
        To develop work satisfaction among agents & employees.



b) HDFC STANDARD LIFE INSURANCE COMPANY:

          HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC,
  India’s largest housing finance institution and Standard Life Assurance Company,
  Europe’s largest mutual life company. HDFC manages Rs. 21,450 Crores in
  assets and Standard Life manages over US $100 billion in assets. Both the
  promoters are well known for their ethical dealings, their financial strength and
  their commitment to be a long-term player in the life insurance industry.


c) MAX NEW YORK LIFE INSURANCE COMPANY:
         Max New York Life Insurance Company is a joint venture between New
  York Life International Inc. and Max India Limited. New York Life, a Fortune
  100 Company, is one of the world’s experts in life insurance with over 156 years
  of experience in the business and over US$ 165 billion (Rs. 775,000 Crores) in
  assets under management. Max India Limited is a multi-business corporate,
  focused on the knowledge, people, and service-oriented business of life
  insurance, healthcare and information technology.



d) ICICI PRUDENTIAL LIFE INSURANCE COMPANY :


                                         21
  ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
  a premier financial powerhouse and Prudential plc, a leading international
  financial services group headquartered in the United Kingdom. ICICI Prudential
  was amongst the first private sector insurance companies to begin operations in
  December 2000 after receiving approval from Insurance Regulatory Development
  Authority (IRDA).



e) OM KOTAK MAHINDRA LIFE INSURANCE :

  Om Kotak Mahindra Life Insurance, a company under Kotak
  Mahindra Group is a 74:26 life insurance joint venture between
  Kotak Mahindra Finance Limited with Old Mutual, U.K.
  The philosophy of Om Kotak Mahindra is helping their customers
  take financial decisions at every stage in life. Their aim is to
  consistentl y offer a wide range of innovative life insurance
  products, to help their customers remain financiall y independent,
  which is why they believe that freedom to take life on "Jeene Ki
  Aazadi"
  The alliance of Om Kotak Mahindra with Old Mut ual has given it
  unmatched expertise in life insurance area. With 156 years of
  experience in life insurance business, Old Mutual is today an
  International Financial Service Group based in London.


f) BIRLA SUN LIFE INSURANCE COMPANY:

  It is a joint venture of Adit ya Birla Group and Sun Life Financial
  Services with the objective that Insurance is not about something
  going wrong. It's often about things going right. One of the
  wonders of human nature is that we never believe anything can
  actuall y go wrong. Surel y, life has its share of ifs. At Birla Sun
  Life however, we believe it has its equally pleasant share of buts as
  well. We at Birla Sun Life stand committed to helping you realize
  those happy moments, which make a life. Be it living the same
  lifest yle in your post retirement days or providing a secure future
  for your loved ones, in case something happens to you.




g) TATA AIG LIFE INSURANCE COMPANY :
                                        22
  Tata AIG is a joint venture that is backed by the Tata Group – India’s
  most respected industrial conglomerate, with revenues of more than US
  $8.4 billion, and American International Group, Inc. (AIG) – the leading
  US-based international insurance and financial services organization, with
  a presence in over 130 countries and jurisdictions th roughout the world.
  Tata AIG offers a gamut of innovative products in the Life Insurance
  sector.



h) SBI LIFE INSURANCE COMPANY :

  SBI Life Insurance Company Ltd. is a joint venture between State Bank of
  India and Cardiff of France. SBI is the largest bank in India and Cardiff
  is a leading insurance company in France operating in 29 countries.
  Cardiff is a wholly owned subsidiary of BNP Paribas, the largest
  European Bank.




                                              COMPANY PROFILE

 INTRODUCTION TO COMPANY


 ICICI GROUP:

                                   23
ICICI Bank is India’s second-largest bank with total assets of about Rs.112.024 crore and a
network of about 450 branches and offices and about 1750 ATMs. ICICI Bank offers a wide
range of banking products and financial services to corporate and retail customer through a
variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital, asset management and
information technology. ICICI Bank’s equity shares are listed in India on stock exchanges at

Chennai. Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution,
and was its wholly owned subsidiary. ICICI’s shareholding in ICICI Bank was reduced to 46%
through a public offering of shares in India in fiscal 1998, an equity offering in the form of
ADRs listed on the NYSE in fiscal 2000, ICICI Bank’s acquisition of Bank of Mathura Limited
in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World
Bank, the Government of India and representatives of Indian industry. The principal objective
was to create a development financial institution for providing medium term and long term
project financing to Indian businesses. In the 1990s, ICICI transformed its business from a
development financial institution offering only project finance to a diversified financial services
group offering a wide variety of products and services, both directly and through a number of


                                                24
subsidiaries and affiliates like ICICI Bank, In 1999, ICICI become the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging
competitive scenario in the Indian banking industry, and the move towards universal banking,
the management of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI
Bank would be the optimal strategic alternative for both entities, and would create the optimal
legal structure for the ICICI group’s universal banking strategy. The merger would enhance
value for ICICI shareholders through the merged entity’s access to low-cost deposits, greater
opportunities for earning fee-based income and the ability to participate in the payment system
and provide transaction-banking services. The merger would enhance value for ICICI Bank
shareholders through a large capital base and scale of operations, seamless access to ICICI’s
strong corporate relationships built up over five decades, entry into new business segments,
higher market share in various business segments, Particularly fee-based services, and access to
the vast talent pool of ICICI Bank approved the merger of ICICI and two of its wholly-owned
retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services
Limited, With ICICI Bank.

Shareholders of ICICI and ICICI BANK approved the merger in January 2002, by the High
Court of Gujarat at Ahmedabad in March 2002, and by the High Court of

Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger,
the ICICI group’s financing and banking operations, both wholesale and retail, have been
integrated in a single entity. ICICI Bank is the only Indian company to be rated above the
country rating by the international rating agency moody “s and the only Indian company to be
awarded an investment grade international credit rating. The Bank enjoys the highest AAA (or
equivalent) rating from all Leading Indian rating agencies.




    PRUDENTIAL PLC:

               Established in 1848, today prudential plc is a leading international
       financial services company with some 16 million customers, policyholders and
       unit holders and some 20,000 employees worldwide. In the UK Prudential is a
       leading life and pensions provider with around seven million customers. M&G

                                               25
      was acquired by Prudential in 1999 and is the Group’s UK and European fund
      manager, responsible for managing over of 111 billion of funds (as at December
      2003). Launched by Prudential in 1998, Egg is an innovative financial services
      company, with over three million customers, with nearly six per cent of UK credit
      card balances. In Asia, Prudential is the leading European life insurer with 23 life
      and fund management operations in 12 countries serving some five million
      customers. In the US, Prudential owns Jackson National Life, a leading life
      insurance company, and has more than 1.5 millions policies and contracts in
      force.

             Prudential has brought to market an integrated range of financial services
      products that now includes life assurance, pensions, mutual funds, banking,
      investment management and general insurance. In Asia, Prudential is UK”s

             Largest life insurance company with a vast network of 22 life and mutual
      fund operations in twelve countries – China, Hong Kong, India, Indonesia, Japan,
      Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
      Since 1923, Prudential has championed customer-centric products and services,
      supported by over 60,000 staff and agents across the region.

             Prudential plc’s strong mix of business around the world positions us well
      to benefit form the growth in customer demand for asset accumulation and
      income in retirement. Our international reach and diversity of earnings by
      geographic region and product will continue to give us significant advantage.

              Our commitment to the shareholders who own Prudential is to maximize
      the value over time of their investment. We do this by investing for the long term
      to develop and bring out the best in our people and our businesses to produce
      superior products and services, our international peer group in terms of total
      shareholder returns.

               At Prudential our aim is lasting relationships with our customers and
      policyholders, through products and services that offer value for money and
      security. We also seek to enhance our Company’s reputation, built over 150
      years, for integrity and for acting responsibly within society.



    ICICI Prudential Life Insurance:


ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and Prudential Plc, a leading international financial

                                              26
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from insurance Regulatory Development Authority (IRDA).

ICICI Prudential’ s equity base stands at Rs.6.75 billion with ICICI Bank and Prudential
plc holding 74% and 26% stake respectively. Today, our nation-wide reach includes
1,960 branches (inclusive of 1,096 micro-offices), over 237,000 advisors; and 6 banc
assurance partners.

For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private
Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we grow our distribution, product range and customer base, we continue to
tirelessly uphold our commitment to deliver world-class financial solutions to customers
all over India.

EDGE: The ICICI Prudential edge comes from our commitment to our customers, in all that we
do - be it product development, distribution, the sales process or servicing. Here's a peek into
what makes us leaders.

   1. Our products have been developed after a clear and thorough understanding of
      customers' needs. It is this research that helps us develop Education plans that
      offer the ideal way to truly guarantee your child's education, Retirement solutions
      that are a hedge against inflation and yet promise a fixed income after you retire,
      or Health insurance that arms you with the funds you might need to recover from
      a dreaded disease.
   2. Having the right products is the first step, but it's equally important to ensure that
      our customers can access them easily and quickly. To this end, ICICI Prudential
      has an advisor base across the length and breadth of the country, and also partners
      with leading banks, corporate agents and brokers to distribute our products .
   3. Robust risk management and underwriting practices form the core of our
      business. With clear guidelines in place, we ensure equitable costing of risks, and
      thereby ensure a smooth and hassle-free claims process.
   4. Entrusted with helping our customers meet their long-term goals, we adopt an
      investment philosophy that aims to achieve risk adjusted returns over the long-
      term.
   5. Last but definitely not the least, our team is given the opportunity to learn and
      grow, every day in a multitude of ways. We believe this keeps them engaged and
      enthusiastic, so that they can deliver on our promise to cover you, at every step in
      life.




                                                27
Vision & Values: To be the dominant Life, Health and Pensions player built on trust by
world-class people and service

This we hope to achieve by:

   (a) Understanding the needs of customers and offering them superior products and
       service.
   (b) Leveraging technology to service customers quickly, efficiently and conveniently
   (c) Developing and implementing superior risk management and investment
       strategies to offer sustainable and stable returns to our policyholders
   (d) Providing an enabling environment to foster growth and learning for our
       employees
   (e) And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core
values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way we
work.

We do believe that we are on the threshold of an exciting new opportunity, where we can
play a significant role in redefining and reshaping the sector. Given the quality of our
parentage and the commitment of our team, there are no limits to our growth.

Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer
First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have
become the keystones of our success.




    MANAGEMENT:




                                              28
The ICICI Prudential Life Insurance Company Limited Board comprises reputed people
from the finance industry both from India and abroad.

Chairperson: Ms. Chanda D. Kochhar

Director: Mr. N. S. Kannan

Director: Mr. K. Ramkumar

Director: Mr. Barry Stowe

Director: Mr. Adrian O’Connor

Independent Director: Mr. Keki Dadiseth

Independent Director: Prof. Marti G. Subrahmanyam

Independent Director: Ms. Rama Bijapurkar

Independent Direct: Mr. Vinod Kumar Dhall

Managing Director & CEO: Mr. V. Vaidyanathan




    Company Name & Address:




                                            29
Name:           ICICI PRUDENTIAL LIFE INSURANCE




Address:

         Head Office: ICICI Prudential Life Insurance
                       1st Floor, Appasaheb Marathe Marg,
                       Prabhadevi,
                       MUMBAI – 400013

         Branch Office: ICICI Prudential Life Insurance
                         Krishna Palace , 3rd floor,
                         Tejgarhi, Garh Road,
                         Meerut, Uttar Pradesh,
                         Pin-250005




    ICICI Prudential’s Product:



                                            30
ICICI Prudential has a wide array of Insurance Plans that have been designed with the
philosophy that different individuals are bound to have differing insurance needs.

The ideal insurance plan is one that addresses the exact insurance needs of the individual that
will depend on the age and life stage of the individual apart from a host of other factors.

        Life Insurance Plans:

Under Life insurance plans, ICICI Prudential offers plans under the following major need
categories:

Education Insurance Plans:

One of your most important responsibilities as a parent is to ensure that your child gets the best
possible education that can be provided.

ICICI Prudential offers a wide portfolio of education insurance plans that are designed to provide
peace of mind to you, as a parent, that your child's education will be secure. These plans ensure
that money is made available at the crucial junctures in a child's education - Class X, Class XII,
graduation and post-graduation - to fund crucial commitments for the child's future.

Importantly, education insurance plans ensure that in the unfortunate event of the death of a
parent, the child's education continues unhampered.

Under the education insurance plans platform, ICICI Prudential brings the following products to
you.

     Plan Name
                                                                          Plan Type

                                                                          Unit Linked
     ICICI Pru SmartKid Assure
                                                                          Unit Linked
     ICICI Pru SmartKid Maxima
                                                                          Traditional
     ICICI Pru SmartKid Regular Premium




ICICI Prudential Smart kid Assure: As a loving and caring parent, you would like to
ensure that your children get the best of opportunities to realise their dreams. However,
providing these opportunities to your children comes at a cost and you have to save
wisely so that these costs are met, even in your absence.

Presenting ICICI Pru SmartKid Assure, an ideal insurance cum savings product which
allocates your assets based on your chosen portfolio strategy and whose benefits continue


                                                 31
even if you are not around to take care of your child. Start investing today to ensure that
your children’s dreams turn into reality.

     Minumum Premium                          Rs. 15,000 per annum

     Modes of premium payment                 Yearly/Half Yearly/Monthly

                                              5 times Annual Premium, subject to minimum
     Minimum Sum Assured
                                              of Rs. 1,00,000

     Maximum Sum Assured                      As per the maximum sum assured multiples

     Minimum/Maximum age at
                                              20/60 years
     entry(Parent)

     Minimum/Maximum age at
                                              0/15 years
     entry(Child)

     Maximum age at maturity(Parent)          75 years

     Minimum/Maximum age at
                                              18/30 years
     maturity (Child)

     Minimum/Maximum Policy term              15/25 years



ICICI Pru SmartKid Assure : UIN 105L106V01

Features And Benefits:

Complete protection: Lump sum payment of Sum Assured plus payment of future
premiums by the Company in the unfortunate event of death of the parent (Life Assured)

Guaranteed Addition (GA): 120% to 170% of annual premium allocated to your Fund
Value at the end of the 15th Policy year*

LifeCycle based Portfolio Strategy: A unique and personalized strategy to create an ideal
balance between equity and debt, based on your age

Additional allocation of units: More than 100% allocation to funds on premium payment,
from the 6th Policy year onwards

Partial withdrawals: Facility to provide money at key educational milestones for your
child.

                                                32
ICICI Prudential Smart kid Maxima: As parents, we want to provide the best that we can
offer for our children and this includes planning for the best possible education. With the
rising cost of education, you need a savings plan that is designed to provide adequate
money at key educational milestones and take care of your loved ones even if you are not
around.

With this objective in mind, ICICI Prudential Life Insurance now presents ICICI Pru
SmartKid Maxima. With this product, you can safeguard your child’s education and
ensure that your loved ones stay financially secure in your absence. Additionally this
product also offers you a unique strategy that allows you to protect gains made through
your funds invested in the equity market from any future equity market volatility.


     Minimum Premium                       Rs. 12,000 p.a. for yearly mode
                                           Rs. 15,000 p.a. for half yearly & monthly mode

     Modes of Premium Payment              Yearly/ Half yearly/ Monthly

                                           5 X Annual Premium, subject to a minimum of
     Minimum Sum Assured
                                           Rs. 1,00,000

                                           As per the maximum Sum Assured multiples,
     Maximum Sum Assured
                                           subject to a minimum of Rs. 1,00,000

     Minimum/ Maximum age at
                                           20 / 60 years
     entry (Parent)

     Maximum age at maturity
                                           75 years
     (Parent)

     Minimum/ Maximum age at
                                           0 / 15 years
     entry (Child)

     Minimum/Maximum age at
                                           18 / 30 years
     maturity (Child)

     Policy Term                           10 / 15 / 20 / 25 years



ICICI Pru SmartKid Maxima : UIN 105L104V01




                                                33
Features and benefits:

Complete protection: Lump sum payment of Sum Assured plus payment of future premiums by
the Company in the unfortunate event of death of the parent (Life Assured)

Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made in equity markets
from any future equity market volatility.

Guaranteed Additions: Additions of 60% of annual premium accrue to your Fund Value every
five years, starting from the end of 10th Policy year, on payment of all due premiums.

Partial withdrawals: Facility to provide money at key educational milestones of your child.



ICICI Prudential Smart kid Regular Premium: ICICI Prudential's SmartKid is a fixed-term
insurance plan that provides you with funds at regular intervals. The plan also keeps your family
financially secure should an untoward event ever occur. Read more about the features and
benefits of SmartKid.

Features and benefits: SmartKid New Unit-linked Regular Premium, SmartKid New
Unit-linked Single Premium and SmartKid Regular Premium. Take a look at the features
and benefits of each plan:

   1. SmartKid New Unit-linked Regular Premium

UIN 105L058V01

SmartKid New Unit-linked Regular Premium is a unit-linked plan, which enables you
and your child to accumulate wealth by virtue of the performance of the underlying
market-linked instrument. Take a look at the features of the plan:

Premium: The minimum premium to be invested is Rs. 10,000 per annum. After
deducting premium allocation charges from the premium, the remaining amount will be
invested in a fund of your choice.

Sum Assured: The minimum Sum Assured is 5 times of Annual Premium, subject to a
minimum of Rs 1 Lac

Policy term: The term of the policy will be calculated as the difference between your
child's current age and the age of your child when the policy matures.

Mortality, Policy Administration charges: These and other charges will be deducted from
the units in the fund.

                                               34
   2. SmartKid New Unit-linked Single Premium

UIN 105L059V01

SmartKid New Unit-linked Single Premium works in much the same way as SmartKid
New Unit-linked Regular Premium policy mentioned above. The only different feature is
the premium amount-you will be required to pay only a single premium, which starts at
as low as Rs. 50,000.

Additional Features and Benefits Common to All 3 Plans

Regular payouts: As your child approaches key educational milestones such as 12th
standard or graduation exams, he or she will receive regular payouts, guaranteeing he or
she continues to study, no matter what the circumstance.

Death Benefit: Your child will receive the Sum Assured immediately, should something
happen to you. ICICI Prudential will pay the remaining premiums, ensuring your child
continues to receive policy benefits, as always.

Income Benefit Rider: You can choose to add the benefits of this rider to your child's
education plan. Should you depart before your son's or daughter's education is complete,
you child will receive 10% of Rider Sum Assured, for the balance term of the policy.

Add-on riders: 'Accidental Death and Disability Rider' and 'Waiver of Premium Rider'
ensure your child stays doubly protected, at all times. You can choose to add these to
your child's education policy.

Tax benefits: Premiums you pay for a SmartKid policy are eligible for tax savings [u/s
80(C)]. Maturity and death benefits are eligible for tax exemptions [u/s 10(10D)].

   3. SmartKid Regular Premium

UIN 105N014V02

Flexible investment option: Choose the amount of premium with which you wish to
safeguard your child's education.

Flexible policy tenure: The tenure of the plan will be calculated as the difference between
your child's current age and his or her age at which the policy matures.

Flexible premium options: The premium will be calculated based on 3 factors: Sum
Assured, policy tenure and your age.



                                                35
Guaranteed bonus: A guaranteed bonus of 3.5% per annum is declared for the first 4
premium paying years plus an annual vested bonus declared in subsequent years.

Wealth Creation Plans:

Wealth Creation Plans give the customer the dual benefit of protection along with the
potentially higher returns of market-linked instruments. The most important benefit of
ULIPs is the flexibility they give the customer in choosing the premium amount and also
choosing the underlying fund in which this money is to be invested. Wealth creation
plans also offer the customer more liquidity options as compared to traditional plans. As
such, ULIPs are ideal for customers who want the protection of a life cover to be allied to
the returns of market linked instrument – giving them an unmatched combination of
benefits.

Under the wealth creation platform, ICICI Prudential brings the following products to
you.

     Plan Name                                                    Plan Type

     ICICI Pru ACE                                                 Unit Linked

     ICICI Pru Premier Wealth                                     Unit Linked

     ICICI Pru Assure Wealth                                      Unit Linked

     ICICI Pru LifeTime Maxima                                    Unit Linked

     ICICI Pru Pinnacle                                           Unit Linked



 ICICI Pru ACE: You have always wanted the best in life. Just like you, your
investments also deserve the very best. Similarly, your financial planning needs the best
that money can buy. Importantly, you need a plan that helps you achieve your dreams
and also protect them in adverse conditions.

Keeping this in mind, ICICI Prudential brings you ICICI Pru Ace, a savings plan which
offers you the best value for your hard earned savings.

     Minimum Premium                Rs. 18,000 p.a
     Modes of Payment               Yearly / Half Yearly / Monthly
     Minimum Sum Assured            5 times Annual premium subject to min of Rs. 100,000
     Maximum Sum Assured            As permaximum sum assured multiples
     Min / Max age at entry         0 / 65 yrs


                                                36
     Min / Max age at maturity     18 / 75 years
     Policy Term                   10 - 30 years

ICICI Pru ACE : UIN 105L105V01

Features:

Trigger Portfolio Strategy: Option to choose a unique portfolio strategy to protect gains made in
equity markets from any future equity market volatility

100% allocation: At premium payment, in the asset class of your choice

Loyalty Additions: At the end of every five policy years, starting from the 10th policy year, on
payment of all premiums

Additional allocation of units: More than 100% allocation to funds on premium payment from
the sixth policy year to the end of the policy term

Automatic Transfer Strategy: An option that helps you eliminate the need to time your
investment

ICICI Pru Premier Wealth: Just like you your investments also deserve the best. It should not
only give you higher returns but also protection and that too at a minimal cost.

Keeping this in mind, ICICI Prudential brings you ICICI Pru Premier Wealth. This policy offers
you a unique investment strategy that allows you to protect gains made through your funds
invested in the equity markets from any future equity market volatility. In addition, it also
provides an insurance cover.

So, realize your dreams without compromising your family’s protection


     Minimum Premium                     Rs. 18,000 per annum
     Modes of Premium Payment            Yearly/ Half yearly/ Monthly
                                         5 X Annual Premium, subject to a minimum of
     Minimum Sum Assured
                                         Rs. 100,000
     Maximum Sum Assured                 As per the maximum sum assured multiples
     Minimum/ Maximum age at
                                         0 / 65 years
     entry
     Minimum/ Maximum age at
                                         18 / 75 years
     maturity
     Policy Term                         10 / 15 / 20 / 25 / 30 years
     Tax Benefits                        Premium and any benefit amount received under


                                               37
                                         this policy
                                         will be eligible for the tax benefit as per the
                                         prevailing
                                         Income Tax laws


ICICI Pru Premier Wealth : UIN 105L097V01

Features and benefits:

Investment option: The product will offer the customer multiple investment options, to
provide more freedom in terms of how he/she wants his/her money to be invested. The
product will be available with 2 portfolio strategies

   1. Trigger Portfolio Strategy
   2. Fixed Portfolio Strategy

Additional allocation: Additional allocation of units from 6th year onwards that will
result in more than 100% allocation to funds on premium payment.

Loyalty Bonus: At the end of every five policy years, starting from the 10th policy year,
paid irrespective of the premium payment status.

Partial Withdrawals: 1 partial withdrawal allowed every 3 years starting from the 6h
policy year.

Death benefit: Sum Assured or Fund Value, whichever is higher.

Maturity benefit: Fund value. Alternatively, settlement options can be chosen



ICICI Pru Assure Wealth: You want your investments to work as hard as you do in order
to help you achieve your goals. You also want to be rewarded with life long benefits so
that you have the peace of mind you always desired.

Presenting ICICI Pru Assure Wealth, a whole life insurance and savings product, that
rewards you with a guaranteed addition and also provides you an insurance cover so that
your loved ones are taken care of in your absence.

     Minimum Premium                      Rs. 12,000 per annum
     Modes of Premium Payment            Yearly/Half yearly/Monthly
                                         5 X Annual Premium, subject to a minimum of
     Minimum Sum Assured
                                         Rs.1,00,000
     Maximum Sum Assured                 As per the maximum Sum Assured multiples

                                               38
     Minimum/Maximum         Age    at
                                         0/55 years
     Entry
     Policy Term                         Whole Life

ICICI Pru Assure Wealth : UIN 105L98V01




Features and benefits:

Guaranteed Addition (GA): A Guaranteed addition varying from 120% to 180% of one
annual premium is added to your Fund Value at the end of the 15th Policy year*.

Whole Life: Enjoy the benefits of staying invested throughout your life.

LifeCycle based Portfolio Strategy: A unique and personalized strategy to create an ideal
balance between equity and debt, based on your age.

Choice of variants: You can choose between two product variants:

   1. Assure Wealth Super
   2. Assure Wealth Plus

Partial withdrawals: Facility to withdraw money for your liquidity needs



ICICI Pru LifeTime Maxima: Money saved is money earned. Whenever the value of your
investment rises, you would like to ensure that the gains you have made are safeguarded.
Keeping this in mind, ICICI Prudential brings you ICICI Pru LifeTime Maxima. This
policy offers you a unique strategy that allows you to protect gains made through your
funds invested in the equity markets from any future equity market volatility. In addition,
it also provides an insurance cover. So, realize your dreams without compromising your
family’s protection.

     Minimum/Maximum
                                    0/65 years
     Entry Age

     Maximum Maturity Age           18/75 years

     Policy term                    10/15/20/25/30 years

     Minimum/ Maximum
                                    5 X Annual premium / As per the SA multiple matrix
     Sum Assured


                                                 39
     Premium Payment
                                   Monthly, half-yearly, yearly
     Frequency

     Minimum Premium               Rs.24,000 per annum

                                   Premium and any benefit amount received under this
     Tax Benefit                   policy will be eligible for the tax benefit as per the
                                   prevailing Income Tax laws.

ICICI Pru LifeTime Maxima : UIN 105L096V01

Features and benefits:

Investment option: The product will offer the customer multiple investment options, to
provide more freedom in terms of how he/she wants his/her money to be invested. The
product will be available with 2 portfolio strategies

  • Trigger Portfolio Strategy

  • Fixed Portfolio Strategy

Additional allocation: Additional allocation of units from 6th year onwards that will
result in more than 100% allocation to funds on premium payment.

Partial Withdrawals: 1 partial withdrawal allowed every 3 years starting from the 6h
policy year.

Death benefit: Higher of Sum Assured and Fund Value

Maturity benefit: Fund value. Alternatively, settlement options can be chosen



ICICI Pru Pinnacle: ICICI Pru Pinnacle is a unit linked insurance policy that offers the
advantage of varying exposure to equities along with downside protection, so that your
investments are protected in financially volatile times. It also offers a limited premium
payment term while allowing you to enjoy insurance protection for a longer period.




Guaranteed NAV

With ICICI Pru Pinnacle, we guarantee the highest Net Asset Value (NAV) recorded on
a daily basis, in the first 7 years of the fund, subject to a minimum of Rs.10. The
guarantee will be applicable only at maturity. The period of 7 years starts from the date

                                               40
of launch of Pinnacle Fund and will end on the completion of 7 years (from 24/10/09 to
24/10/16).

At maturity, the higher of Fund Value (Units X NAV) and Guaranteed Value (Units X
Guaranteed NAV) as on the maturity date shall be payable.

                                                           Scenario 1        Scenario 2
    Number       of     Units     at     maturity
                                                           50,000            50,000
    (A)
    Guaranteed                               NAV
                                                           Rs.20             Rs.20
    (B)
    NAV          on         maturity         date
                                                           Rs.15             Rs.25
    (C)
    Guaranteed                             Value
                                                           Rs 10.0 lacs      Rs 10.0 lacs
    (A x B)
    Fund                                    Value
                                                           Rs 7.5 lacs       Rs.12.5 lacs
    (A x C)
    Higher of (Guaranteed Value, Fund Value)               Rs. 10.0 lacs     Rs. 12.5 lacs



Not only this, ICICI Pru Pinnacle gives a boost of additional allocation amounting to 3%
of Fund Value on the day of maturity (Guaranteed NAV will not be applicable to
additional allocation).

    Premium Payment Term
                                  3 years
    Minimum Premium
                                  Rs.50,000 per annum
    Modes of Premium
                                  Half yearly/Yearly
    Payment
    Minimum/Maximum
                                  8/ 65 years
    Entry Age
    Policy Term
                                  10 years
    Maximum Maturity Age
                                  75 years
    Minimum Sum Assured
                                  5 x Annual Premium
                                  Premium and any benefit amount received under this
    Tax Benefit                   policy will be eligible for the tax benefit as per the
                                  prevailing Income Tax laws.

ICICI Pru Pinnacle: UIN 105L095V01


                                                41
Features and benefits:

Guaranteed NAV: get the benefit of the highest NAV recorded on a daily basis, in the
first 7 years of the fund, at maturity.

Limited premium payment term: pay premiums for only 3 policy years.

Additional allocation: added to your fund at maturity

Death benefit: in the unfortunate event of death, the nominee receives higher of Sum
Assured (reduced by partial withdrawals) and Fund Value.

Partial withdrawals: ensures liquidity from the 6th policy year onwards

Tax benefits: avail tax benefits on the premiums paid and benefits received under the
policy, as per the prevailing Income Tax laws.



Protection Plans:

The sole objective of these plans, as their name indicates, is to serve the protection needs
of the customer and by doing so, safeguard one’s family from the financial implications
of unfortunate circumstances than one cannot foresee.

Under the Protection Plans platform, ICICI Prudential brings to you the following
products:

ICICI Pru Pure Protect: As the head of your family, you have always fulfilled your
responsibilities and given your family the comforts they wanted. You have always been
there for them. However, life is full of uncertainties. So, it is important to ensure that
your family is protected, should something unfortunate happen to you.

Keeping this in mind, we bring to you, ICICI Pure Protect, with which you can insure
your life and provide total security to your family, at a very affordable cost.

ICICI Pru Pure Protect is a term plan (Without Return of Premium) which will be
available in two variants:

   1. ICICI Pru Pure Protect Classic: For Sum Assured of up to Rs. 25,00,000
   2. ICICI Pru Pure Protect Elite: For Sum Assured of Rs. 25,00,000 and above

Invest in the plan that best suits your protection needs and guarantees lifelong comfort
and security to your family.




                                                42
Safeguard your family from financial insecurity with the shield of ICICI Pru Pure Protect
at very affordable rates.

     Features           Pure Protect Classic                  Pure Protect Elite
     Minimum
     Annual             Rs. 2400 p.a. ( with service tax )
     Premium
     Minimum /
     Maximum            18 - 65 years
     Entry Age
     Maximum Age
                        75 years
     at Maturity
     Term               10 - 30 years
     Minimum Sum
                        -                                     Rs. 25,00,000
     Assured
     Maximum Sum
                        Up to Rs. 25,00,000
     Assured
     Premium
     Payment            Yearly, Half Yearly, Monthly
     Frequency
                        Premium paid for the policy will be eligible for tax benefit under
                        section 80C, any benefit amount received under this policy will be
     Tax Benefit
                        eligible for the tax benefit under section 10 (10D), as per prevailing
                        Income Tax laws


Features and Benefits:

Death benefit: Provide for your beneficiary to receive the Sum Assured should
something happen to you.

Maturity benefit: There are no maturity benefits available under this plan.

Tax benefits: Receive tax deductions on premiums paid (u/s 80 C). Enjoy tax exemptions
on death benefits [u/s 10 (10 D)] as per prevailing Income Tax laws.

Additional Benefits

For added protection of your family against any unfortunate eventualities, we offer you
the following benefits at a nominal extra cost.

Accidental Death and Disability Benefit Rider:

• On death of the life assured due to an accident, the beneficiary gets the additional Sum
Assured under the Rider.


                                                 43
• In case of death due to accident while the life assured is using, as a fare paying
passenger, authorized public mass surface transport, namely bus or train, operating under
terms of such authorization the beneficiary gets twice the Sum Assured under the rider.

• In the event of total and permanent disability, 10% of the Rider Sum Assured is paid
out every year, for 10 years.

Waiver of Premium Rider:

• In case of total and permanent disability due to an accident, under this rider the
company will pay the remaining premiums till maturity.



LifeGuard: Protect your family with ICICI Prudential's LifeGuard. LifeGuard acts as a
shield that safeguards your loved ones from financial insecurity, at all times.

A cost-effective plan, LifeGuard comes in two variants: LifeGuard with Return of
Premium (life cover with maturity benefit), and LifeGuard Single Premium (premium at
policy inception, cover till policy matures). Invest in a plan that best suits your
requirements and guarantee your family lifelong comfort and security.

Protect your family with ICICI Prudential's LifeGuard. LifeGuard acts as a shield that
safeguards your loved ones from financial insecurity, at all times.

A cost-effective plan, LifeGuard comes in two variants: LifeGuard with Return of
Premium (life cover with maturity benefit), and LifeGuard Single Premium (premium at
policy inception, cover till policy matures). Invest in a plan that best suits your
requirements and guarantee your family lifelong comfort and security.

                           Minimum Sum                              Premium*
     Plan                                        Policy Term
                           Assured                                  Installments
                                                 Between 10 &
     LifeGuard
                                                 30 years           Monthly, half-yearly
     with Return of        Rs 5 Lakhs
                                                                    or annually
     Premium
                                                 Between 3 &
     LifeGuard Single      Rs 2.5 Lakhs
                                                 15 years           Single Premium plan
     Premium



Features and Benefits:

LifeGuard offers a choice of 2 life insurance plans: LifeGuard with Return of Premium
and LifeGuard Single Premium. Take a look at the features and benefits of the plans:


                                               44
Death benefit: Provide for your beneficiary to receive the Sum Assured should
something happen to you.

Extended life cover: Invest in LifeGuard with Return of Premium plan and safeguard
your family with an additional cover—at 50% of the original Sum Assured—for 5 years
after your policy terminates.

Additional riders: Protect your family from accidents and disability by adding on the
Accident and Disability Benefit Rider (ADBR) and the Waiver of Premium Rider
(WOPR).

ADBR: The rider benefit amount will be paid to your family in the event of death or
disability due to an accident.

WOPR: In the case of total and permanent disability due to an accident, all further
premiums will be waived and policy benefits will continue.

Tax benefits: Receive tax deductions on premiums paid (u/s 80 C). Enjoy tax exemptions
on maturity proceeds and death benefits [u/s 10 (10 D)] as per prevailing Income Tax
laws.

Maturity benefit: Invest in LifeGuard with Return of Premium plan and receive all the
premiums you have paid, when your policy matures.



Save'n'Protect: Assure your loved ones stay secure, even when you are unable to hold up
the protective umbrella yourself. Invest in ICICI Prudential's Save'n'Protect life insurance
scheme, and in addition to safeguarding your family, Save'N'Protect will enable you to
make regular, systematic savings, so you can effortlessly provide your family with every
comfort and meet your long-term financial objectives.

Minimum           Rs 50,000
Sum Assured
Minimum           10 years
Term
Maximum           30 years
Policy Term
Minimum           0
Entry Age
Maximum           60 years
Entry Age
Maximum           70 years
Age        at

                                                45
maturity
Minimum           Rs 6000 p.a.
Premium

                  Premium paid for the policy and critical illness benefit rider will be
Tax Benefit
                  eligible for tax benefit under section 80C & 80D respectively, any
                  benefit amount received under this policy will be eligible for the tax
                  benefit under section 10 (10D), as per prevailing Income Tax laws.


Features and benefits:

When you invest in Save’N’Protect, you give yourself the guarantee of safeguarding
your family’s well being in addition to savings towards some important goals.

Take a look at the features and benefits of this plan:

Sum Assured: Choose your Sum Assured depending on the level of cover with which
you want to protect your family. The minimum Sum Assured is Rs. 50,000.

3 premium paying modes: Choose to pay your premium in monthly, bi-annual or annual
installments. Your premium is determined based on your age and the Sum Assured you
choose.

Death benefit: Your nominee will immediately receive the Sum Assured and accrued
guaranteed and vested bonuses, should something happen to you.

Maturity benefit: Receive guaranteed and vested bonuses plus the Sum Assured when
your policy matures.

Extended life cover: Opt to protect your family even after you have stopped paying the
premium. Enjoy an extended cover for 5 years, at 50% of the Sum Assured, after your
policy matures.

Additional riders: Keep your family financially secure even in the event of a critical
illness, accident and disability. Invest in Critical Illness Rider (CIR), Accident and
Disability Benefit Rider (ADBR) and Accident Benefit Rider (ABR).

Tax benefits: Enjoy tax deductions on your premiums (u/s 80 C) and tax exemptions on
maturity proceeds and death benefit [u/s 10 (10 D)] as per prevailing Income Tax laws.




                                                 46
CashBak: ICICI Prudential's CashBak is a fixed-term insurance plan that provides you
with funds at regular intervals. The plan also keeps your family financially secure should
an untoward event ever occur.

     Minimum/Maximum Entry Age           16 years and 55 years
     Minimum Sum Assured                 Rs. 75000
     Liquidity years for CashBak 15
                                         3 rd , 6 th , 9 th and 12 th year
     years
     Liquidity years for CashBak 20
                                         4 th,8 th, 12 th and 16 th year
     years
                                         50% of Sum Assured + Guaranteed Additions and
     Maturity Benefit
                                         Vested Bonuses


Features and benefits:

CashBak is a fixed-term insurance plan that you can invest in for either 15 or 20 years,
depending on your financial goals and objectives. Take a look at the features and benefits
of this plan

Guaranteed additions: Receive additional sums at the rate of 3.5% compounded annually
on the Sum Assured, for the first four years.

Liquidity benefit: Receive a percentage of the basic Sum Assured at the end of year 3, 6,
9 and 12, if you choose a 15-year plan. If you choose a 20-year plan, receive payouts at
the end of year 4, 8, 12 and 16.

Death benefit: Should something happen to you, your nominee will receive the Sum
Assured along with guaranteed additions for the first 4 years, along with vested bonuses,
irrespective of the survival benefits already paid.

Maturity benefit: Receive 50% of the Sum Assured along with guaranteed additions, for
the first 4 years, and vested bonuses (if any).

Tax benefits: Enjoy tax savings on your premiums (under u/s 80 C) and tax exemptions
on your death and maturity benefits [under u/s 10 (10 D)].



Home Assure: Own your dream home, we will cover it!

Owning your very own home is a cherished dream. We want to ensure that this dream
comes true, irrespective of what the future holds. We are pleased to bring you Home
Assure. This extremely affordable Term Life Insurance Plan offers you protection against

                                               47
your loan amount with complete convinience in application. In case of an unfortunate
event of death, the financial security of your family is not affected. The family need not
direct their savings towards paying off the outstanding loan. ICICI Prudential will pay
the outstanding amount to the bank directly. Your family will continue to retain the home
purchased by your hard earned money.


     Age at entry                                   18 - 60 years


     Maximum Cover ceasing age                      70 years


     Term of the plan                               2 -22 years


     Minimum Sum Assured                            Rs.25,000


     Maximum Sum Assured                            Equivalent to the loan amount

Features and benefits:

   1. All you have to do is pay a single premium to opt for the insurance cover and you will
      continue to remain covered throughout the insurance tenure i.e. the under-construction
      period (if applicable) + the original home loan tenure.




   2. You will need to state in advance the expected under-construction period as 0,1, or 2
      years. This will be added to the home loan term to compute the total insurance term.
   3. You will be covered for the entire loan amount (santioned home loan + single premium
      paid). The premium is very affordable and there will be a minimal increase in the EMI
      due to the loan for the insurance premium
   4. The insurance cover would start from the date of first disbursement of the home loan and
      ICICI Prudential shall accept risk from the date the premium is debited to the account of
      the life assured.


                                               48
   5. The insurance cover would be as per the original loan schedule.

   6. On survival upto the end of term, no benefit will be payable.

   7. Tax benefits: Premium paid for the policy and critical illness benefit rider will be
      eligible for tax benefit under Sec. 80C and 80D respectively. Any amount paid to you
      will be eligible for tax benefits under Sec. 10 (10D) as per prevailing Income Tax laws.



        Pension & Retirement Solutions



The primary objective of a pension plan is to help you provide for your financial needs in your
post retirement years. You will find a Pension Planning Calculator on the site, meant to make
your pension plan review as simple as possible. The calculator is the first step in your Pension
Plan scheme; there are other steps towards getting the Indian pension policy you need.

ICICI Pru Lifetime Pension Maxima

In the prime of your life and at the peak of your career, you enjoy all the comforts of life. A
happy family, your own home and car, frequent dining out, holidays in India and abroad... these
are pleasures you are used to today. Wouldn't you wish to continue enjoying them even after you
stop working? You can, if you plan for it now. All you need is a good retirement plan.

At ICICI Prudential Life Insurance, we understand your needs and help you plan for a better
future. We bring to you ICICI Pru LifeTime Pension Maxima, a regular premium, unit-linked
pension product. This product offers you the flexibility to invest in unit-linked funds that
generate potentially higher returns over the long term.

This product also offers you a unique strategy that allows you to protect gains made through your
funds invested in the equity markets from any future equity market volatility.

So, start investing today to realize your retirement dreams.

                                             Rs.10,000 p.a. for yearly mode
     Minimum Premium
                                             Rs.15,000 p.a. for half yearly & monthly mode
     Modes of Premium Payment                Yearly / Half yearly / Monthly
     Minimum/Maximum Sum Assured             0/As per the sustainability matrix
     Minimum/Maximum Age at Entry            18 / 70 years
     Minimum/Maximum       Age  at
                                             50 / 80 years
     Vesting
     Maximum cover ceasing age               80 years


                                                49
                                            10 to 60 years, allowed only in multiple of 5
     Policy Term
                                            years

ICICI Pru Lifetime Pension Maxiam : UIN 105L101V01

Features and benefits:

Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made in equity
markets from any future equity market volatility while maintaining a pre-defined asset
allocation

Additional allocation of units: More than 100% allocation to funds on premium payment
from the sixth policy year onwards

Loyalty Addition: At the end of every five policy years, starting from the 10th policy
year, paid irrespective of the premium payment status

Flexibility to increase your investment by investing additional money over and above
your regular premiums as top ups

ATS: Eliminate the need to time your investment with the Automatic Transfer Strategy.

Five pension options: Flexibility to choose a pension plan as per your needs.



ICICI Pru LifeStage Pension Advantage:

The word retirement brings to mind beautiful images of a comfortable and relaxed life. A
life spent in the company of your loved ones and free of the worries and tensions of
work. To ensure that this dream is realized, you need to build an adequate retirement
corpus, which will allow you to be free from any financial worries. To help you achieve
this goal, ICICI Prudential presents ICICI Pru LifeStage Pension Advantage.

The distinguishing feature of this policy is that it has no premium allocation charge for
any regular premiums, which means 100% of your money is invested at premium
payment. This policy also provides you with a unique lifecycle-based investment strategy
that continuously re-distributes your money across various asset classes based on your
life stage and risk tolerance, eventually providing you with a customized retirement
solution. So, start investing today to realize your retirement dreams.


                                            Rs. 15,000 per annum
     Minimum Premium
     Modes of Premium Payment               Yearly/Half yearly/Monthly
     Minimum/Maximum          Sum           0/As per the sustainability matrix

                                               50
     Assured
     Minimum/Maximum Age at Entry           18/70 years
     Minimum/Maximum      Age   at
                                            50/80 years
     Vesting
     Maximum cover ceasing age              75/80 years
     Policy Term                            10 to 60 years, in multiples of 5 years
                                            Premium and any benefit amount received
                                            under this
     Tax Benefits                           policy will be eligible for the tax benefit as per
                                            the
                                            prevailing Income Tax laws.

ICICI Pru LifeStage Pension Advantage: UIN : 105L100V01

Features and benefits

Investment option: The product will offer the customer multiple investment options, to
provide more freedom in terms of choice of investment. The product will be available
with 2 portfolio strategies

   1. Lifecycle based Portfolio Strategy
   2. Fixed Portfolio Strategy

Additional allocation: Additional allocation of units from 6th year onwards that will
result in more than 100% allocation to funds on premium payment.

Partial Withdrawals: 1 partial withdrawal allowed every 3 years starting from the 6h
policy year.

Death benefit: Sum Assured or Fund Value, whichever is higher

Five pension options: provide you the flexibility to choose a pension plan as per your
needs.



ICICI Pru Elite Pension II:

For an exclusive customer like you, who likes to be in complete control, we present
ICICI Pru Elite Pension II.

It is a regular premium paying, unit-linked pension product that offers potentially higher
returns over the long term. This product comes with the unique Trigger Portfolio
Strategy which automatically protects your gains made in equity markets from any future


                                               51
market volatility. And once you arrive at your retirement age, you are assured of regular
income (pension) for life

     Minimum Premium                                  Rs 3,00,000 p.a.
     Mode of Premium Payment                          Yearly and Half yearly
     Min / Max Age at Entry                           18 / 74 years
     Min / Max Policy Term                             6 / 62 years
     Min / Max Age at Vesting                         50 / 80 years

ICICI Pru Elite Pension II: 105L099V01UIN

Features and benefits

Loyalty Addition: A loyalty addition equal to 1.5% of Fund Value will be allocated at the
end of every fifth policy year. These additions will be made only if 3 full years’
premiums are paid within the completion of first 3 policy years.

Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made in equity
markets from any future equity market volatility while maintaining a pre-defined asset
allocation.

Fixed Portfolio Strategy: Choose from 8 investment funds to invest your money, based
on your financial goals and risk profile. You can switch funds 4 times a year, at no cost.
For subsequent switches you will be required to pay a switch fee of Rs. 100.

Partial withdrawal benefit: To ensure liquidity, you will be entitled to make one partial
withdrawal, every three policy years, up to a maximum of 20% of the Fund Value. The
partial withdrawals are free of cost. The minimum partial withdrawal amount is Rs.
2,000. Partial withdrawals will be allowed after completion of five policy years and on
payment of at least three full years' premium.

Flexibility to choose the date from which you want to start receiving pension: Choose to
start receiving your pension from anytime between 50-80 years, according to your
requirement.

Enjoy the flexibility to choose from 5 pension options: through which you can receive
your pension.



ICICI Pru Assure Pension:

A retirement plan provides you an income to enjoy a comfortable lifestyle even after you
stop working.

                                               52
Presenting ICICI Pru Assure Pension, an innovative pension product especially designed
to help you systematically save towards a joyful and carefree retirement.

Moreover, this product provides you with a unique LifeCycle based Portfolio Strategy
that regularly re-distributes your money across various asset classes based on your life
stage, eventually providing you with a customized retirement solution.


                                                Rs 15,000 p.a.
     Minimum Premium
     Mode of Premium Payment                    Yearly / Half yearly / Monthly
     Min / Max Age at Entry                     18 / 65 years
     Min / Max Age at Vesting                   50 / 80 years
     Max cover ceasing age                      80 years

ICICI Pru Assure Pension : UIN 105L102V01

Features and benefits

Guaranteed Addition (GA): 120% to 170% of one annual premium, based on number pf
premiums paid, allocated to your Fund Value at the beginning of the 15th Policy year

Additional allocation of units: More than 100% allocation to funds on premium payment
from the 6th Policy year onwards

LifeCycle based Portfolio Strategy: A unique and personalized strategy to create an ideal
balance between equity and debt, based on your age

Fixed Portfolio Strategy: Choose from 7 investment funds to invest your money, based
on your financial goals and risk profile. You can switch funds 4 times a year, at no cost.
For subsequent switches you will be required to pay a switch fee of Rs. 100.

Partial withdrawal benefit: To ensure liquidity, you will be entitled to make one partial
withdrawal, every three policy years, up to a maximum of 20% of the Fund Value. The
partial withdrawals are free of cost. The minimum partial withdrawal amount is Rs.
2,000. Partial withdrawals will be allowed after completion of five policy years and on
payment of at least three full years' premium.

Flexibility to choose the date from which you want to start receiving pension: Choose to
start receiving your pension from anytime between 50-80 years, according to your
requirement.

Enjoy the flexibility to choose from 5 pension options: through which you can receive
your pension.


                                               53
Forever Life:

ICICI Prudential's Forever Life is a complete insurance cum pension plan that performs
two crucial roles: it acts as a protective cover while you earn for your retirement, and
provides you with regular pensions once you retire. Read more about the features and
benefits of this plan.

     Minimum Sum Assured
                                                              Rs. 50,000


     Minimum Premium                                          Rs. 6,000 per annum


     Minimum/ maximum entry age                               20 years – 60 years


     Minimum/Maximum Term                                     5 years – 30 years


     Minimum/Maximum vesting age                              50 years - 70 years



Features and benefits

Forever Life is a regular premium deferred pension plan, which provides you with the
security of a life cover during your working years (the Accumulation phase of the policy)
and regular pensions once you retire (Annuity phase of the policy).

Take a look at the features and benefits of this plan:

Premiums: Choose the Sum Assured and Vesting Age (age at which you want to start
receiving your pensions). Depending on these as well as your age at entry, we determine
your annual premium.

Pre-decided vesting age: Choose the date from which you want to receive your pensions.

Life cover: Enjoy the protective benefits of a life cover during the term of your policy i.e.
the time from when you purchase the policy to the time you retire. The life cover
amounts to the Sum Assured along with guaranteed additions and vested bonuses.

Annuities: Receive the Sum Assured along with guaranteed additions and vested bonuses
when you retire. Choose how you want to receive your annuities.

                                                 54
5 options of annuity payouts: Choose to receive your annuity out of five annuity options
that come with this retirement plan.

Guaranteed additions: Receive additional sums at the rate of 3.5% per annum
compounded on the Sum Assured, for the first four years.

Vested bonuses: Receive these from the 5th year onwards, as an annual compounded
percentage of the Sum Assured.

Death benefit: Should something happen to you, your nominee will receive the Sum
Assured along with guaranteed additions and vested bonuses.

Tax benefits: Enjoy tax savings on the premiums you pay (under u/s 80 CCC) and tax
exemptions on death benefits [under u/s 10 (10 D)].



Immediate Annuity:

Security and comfort during retirement is a top priority for everyone. It forms the central
aspect of a dream that everyone hopes to achieve and realize at some point or the other
during his or her life as a senior citizen.

If you fear that you've missed the bus as far as retirement planning is concerned, there is
no reason to despair. With ICICI Prudential's Single Premium Product, you can start
earning an annuity income immediately after paying the premium. What's more, the
annuity income is guaranteed for life which means that the insurance company pays you
and your spouse (as the case maybe) a guaranteed pension till you live.

     Premium Payment Frequency
                                                       Single Premium Product


     Annuity Options Available                         5 annuity options


     Minimum Annuity Size                              12,000 p.a.


     Minimum Age                                       45 years


     Maximum Age                                       80 years




                                                55
]Features and benefits

   a)   Flexible Payout Modes-Monthly,Quarterly, Half-Yearly,Yearly
   b)   Provision of Annuity Card which makes servicing of annuity very easy
       Five different payout options:
       Life Annuity
       Life Annuity with Return of Purchase Price
       Joint life Last Survivor without return of purchase price
       Joint Life Last Survivor with return of purchase price
       Annuity Guaranteed for 5/ 10/ 15 years and life thereafter
   c)   No underwriting to be done in this plan



    Health Product Suite

Under Health Product Suite, ICICI Prudential offers plans under the following major need
categories:

Health Assure Plus:

Illnesses have a way of sneaking up on us, weakening our financial stability and stealing our
family's peace of mind. It is best to keep oneself insured at all times against the most critical
illnesses that are also the most common: Cancer, Coronary Artery Bypass Graft or Surgery,
Heart Attack, Kidney Failure, Major Organ Transplant, and Stroke.

ICICI Prudential's HealthAssure Plus financially insures you against these six critical illnesses.
Should you ever be diagnosed with one or more of these, HealthAssure Plus provides you with a
fixed sum, irrespective of your actual medical expenses. The health plan thus shoulders the
heavy costs of your treatment and ensures you stay financially stable, come what may.

This financial guarantee during illness is not all that HealthAssure Plus delivers. HealthAssure
Plus comes with an added benefit: it insures your life, as well. So should an unexpected accident
or disability claim your life, your family will receive the entire Sum Assured-an amount large
enough to ensure they live securely, even in your absence.

                                   Life and Six Critical Illnesses: Cancer, Coronary Artery
     Coverage Against              Bypass Graft or Surgery, Heart Attack, Kidney Failure,
                                   Major Organ Transplant, and Stroke
     Minimum Sum Assured           Rs. 1 lakh
     Maximum Sum Assured           Rs. 10 lakhs
     Minimum/Maximum
                                   18 years to 55 years
     Entry Age
     Maximum Age at Policy         65 years

                                                 56
     Maturity
     Minimum Policy Term          10 years
     Maximum Policy Term          30 years
     Maturity Benefit             Yes, calculated on basis of no claims made
     Surrender Value              Payable after 3 years of plan
                                  15 days from the date on which you receive your
     Freelook Period
                                  documents
                                  Tax benefit under Sec. 80 (C) for premiums paid towards
     Tax Benefits
                                  both, Life and Critical Illness covers.


HealthAssure Plus: UIN 105N051V01

Features and Benefits

Long-term coverage against 6 critical illnesses: Choose a cover, for as long as 30 years with a
premium guarantee for 5 years, depending on your age.

Sum Assured of up to Rs. 10 lakhs: Receive the Sum Assured on diagnosis of any of the 6
covered critical illnesses: Cancer, Coronary Artery Bypass Graft/Surgery, Heart Attack, Kidney
Failure, Major Organ Transplant, and Stroke.

Life Insurance Sum Assured: This amount is paid to the nominee should something happen to
the policyholder.

Flexible withdrawal options: Choose to receive the benefit amount either in a lump-sum amount
or in installments over 5 years. These installments will be payable as 25% in the first years and
20% each year for the next 4 year.

Waiver of premium: Enjoy a waiver of premiums towards your Life Cover even after you
receive the benefit amount on being diagnosed with a critical illness.

Maturity benefit: Receive a 'No claim benefit' when the policy term ends, provided you have
made no claims during the tenure. The Maturity Benefit is equal to the sum total of all the
premiums paid.

Surrender Value: You can surrender your plan after 3 years of cover. The Surrender Value will
be paid immediately, provided you have paid all your premiums in the first 3 years.

No medical/other bills: Receive your claim amount on diagnosis without having to show any
bills.

No medical examinations: Enjoy a waiver on medical examinations if you choose a Sum Assured
up to Rs. 5 lakhs.


                                                57
Tax benefits: Enjoy tax benefits on the premiums you pay (under u/s 80 C) for premiums paid
for both Critical Illness and Life Cover.

ICICI Pru MediAssure:

Health problems, in most cases, strike us unexpectedly, resulting in a sudden financial burden.
Despite this, only around one in every fifty Indians, is covered through some form of individual
medical insurance. Further, it has been observed that 2 out of every 5 individuals hospitalised in
India end up either borrowing money or selling assets to cover healthcare costs. This situation is
set to escalate further as private health care spends in India are estimated to increase by 2 to 3
times over the next 12 years.

Hence you need a solution that gives you peace of mind by providing financial cover to both you
and your family against unforeseen hospitalisation events.

So what should you look for when buying a medical/hospitalisation cover:

   1. Does the plan guarantee you insurability at renewal irrespective of your health status?
   2. Does the plan ensure that no new exclusions are added or no increase in premiums occurs
      just because a claim is made?
   3. Does the plan clearly state exclusions at the time of taking the policy and also offer you
      cover against pre-existing conditions?

ICICI Prudential Life Insurance presents MediAssure, a health insurance plan with a AAA
guarantee for the family

   1. Assured cover till age 75 years
   2. Assured coverage for accepted pre-existing illnesses after 2 years
   3. Assured price for 3 years

Moreover, this policy covers all your hospitalisation needs with the flexibility to choose your
location and quality of treatment.

     Term                    3 years

                             18      -      65      years      for     individual     policies
     Min/ Max age at
                             90 days–65 years for dependents in a family floater
     entry
                             Maximum cover ceasing age for children is 25 years under the
                             family floater
     Annual Limits           Rs 2 lacs, Rs 3 lacs, Rs 5 lacs, Rs 7 lacs, Rs 10 lacs
     Premium Modes           Monthly, Half yearly, Yearly
                             Guaranteed                                           Renewablity
     Renewability
                             (subject to a cover ceasing age of 75 yrs)
                             30                                                         Days
     Waiting Period
                             (No waiting period applies for claims due to accident)

                                                58
                             Premium                                                    Plan
     Plan Types
                             Classic Plan

                             Premiums shown below are for an Annual Limit of Rs 5 lacs

                                  Age          Classic             Premium
                                  25           5,602               7,770
                                  30           5,762               8,008
     Yearly Premiums              35           6,417               8,991
     (Male/ Female)               40           7,851               11,142
     (in Rs.)                     45           9,903               13,953
                                  50           12,124              17,284
                                  55           15,153              21,827

                             Premiums are shown for an individual option with an annual
                             payment mode and are exclusive of service tax and education
                             cess.


Features & benefits

Key Benefits of the MediAssure policy

   1.   Hospitalization coverage for your family under a single policy
   2.   Pre-existing illnesses & conditions covered subject to underwriting
   3.   Guaranteed insurability up to 75 years of age
   4.   Coverage for Pre & Post-Hospitalization expenses
   5.   Over 125 day care procedures covered
   6.   No claim bonus of 5% of annual limit for every claim free policy year
   7.   Cashless Hospitalization in our extensive network of hospitals across the country
   8.   Flexibility in upgrading hospital room facilities with additional co-pay
   9.   Avail tax benefits on premium paid u/s section 80D of IT Act, 1961



Benefits in detail

   1. Family Floater: With the family floater option, you can additionally cover your spouse
      and up to the first three dependent children to the same annual aggregate limit.
   2. Guaranteed insurability up to 75 years of age: You can renew the policy once and within
      30 days from the termination date with the same terms and conditions. You can further
      renew the cover under the then offered ICICI Pru MediAssure product or its nearest
      substitute within 30 days from the policy termination date. The outstanding waiting
      period from the current policy will be applied on continuation of cover. Your premium

                                                59
        payable on renewal and on subsequent continuation of cover shall be reviewed subject to
        IRDA approval.
   3.   Pre exiting illnesses covered: Pre existing illnesses and conditions which are declared at
        inception and specifically accepted by the company would be covered under this policy.
        For conditions of diabetes or hypertension which are disclosed at inception and which are
        accepted for cover, any complications arising from these conditions will be covered after
        the first two consecutive policy years.
   4.   Pre-Hospitalisation and Post Hospitalisation Cover: Pre-Hospitalisation expenses up to
        30 days prior to hospitalisation and post-hospitalisation expenses up to 60 days from the
        date of discharge are also covered. The Pre and Post Hospitalisation expenses would be
        covered only in case the expenses incurred are due to the main hospitalisation event.
   5.   Day Care Treatment Cover: In addition to hospitalisation, you are also covered for
        procedures which require less than 24 hours of hospitalisation. These include over 125
        listed day care surgeries, Parenteral Chemotherapy, Radiotherapy, Intervention
        Cardiology, Intervention Radiology, Radio frequency Ablation Treatment, Lithotripsy
        and Dialysis.
   6.   No Claim Bonus: You are entitled to a 5% increase in your annual limit for every claim
        free year subject to a maximum of 25% increase in the annual limit. Incase a claim is
        made during a policy year; the bonus amount would revert to 0% in the following year.



Hospital Care:

Today, when you are young and healthy, planning for a contingency is not always a priority but
the cost of treating even the smallest of ailments is on the rise. You realize it only when you or
your loved ones has to undergo some medical emergency and you are faced with the challenge of
organizing funds to meet the hospitalisation related expenses. Hence a medical emergency comes
not only with emotional turmoil but also with a huge expense attached to it.

During such an unexpected situation, your only concern should be that the best doctors and
medical facilities are available and cost should not be a constraint so that you can take care of
things without compromise but to ensure that best in class treatment is provided, the key to that
is to be financially prepared for it.

To help you manage this unexpected emergency, ICICI Prudential presents Hospital Care - a
comprehensive insurance policy that has:

   1. Facility of cashless hospitalisation in an extensive network of hospitals in India
   2. Benefit amount will be paid in addition to payment received by you from other medical
      insurance plans.
   3. You will receive lump-sum benefit amount, irrespective of the actual billing.
   4. Long term guaranteed coverage up to 20 years.

                                                60
   5. Tax benefits on premium paid up to Rs.15,000 under Section 80D.

    Minimum / Maximum Age of Entry               1 year - 60 years (age nearest birthday)
    Minimum / Maximum Policy Term                10 years - 20 years
    Maximum Cover Ceasing Age                    80 years
    Premium Payment Frequency                    Yearly, half-yearly & monthly
    Maturity / Death Benefit                     No maturity / death benefit is payable

The premiums are valid for one year from the date of commencement of the policy. Thereafter,
the company reserves the right to change the premium. Any change in the above premiums will
take place subject to approval from IRDA and after giving notice to the policyholder. These
premiums are exclusive of any service tax and education cess.

Premium rates for Male and Female lives for term 10 - 20 years excluding service tax and
Education cess.


    Age Band             Plan A          Plan B             Plan C            Plan D


    1-5                  2,876           4,685              6,494             8,304


     6-10                2,631           4,174              5,717             7,263


    11-15                3,415           5,742              8,068             10,394


    16-20                3,905           6,720              9,535             12,351


    21-25                4,062           7,034              10,005            12,977


    26-30                4,330           7,570              10,810            14,050


    31-35                4,861           8,631              12,402            16,172


    36-40                5,542           9,991              14,439            18,888




                                            61
A summary of the benefits payable on the insured events is given in the table below


                                  How and when benefits are          Size of such benefits/
       Event
                                  payable                            policy monies


                                  1.Hospitalisation for more         1.Plan's DHCB will be
       1.Hospitalisation for
                                  than 24 hrs. 1. The patient is     paid for each day of
       more than 24 hrs.
                                  charged for at least 2 full days   hospitalisation.
                                  room & board.
                                                                     2.An additional 50% of
       2.Admission to ICU         2.If admitted to an ICU            plan's DHCB for each day
                                                                     of admission

                                  3.If hospitalised for more than    3.An amount equal to 3
       3.Convalescence
                                  5 days continuously.               times the plan's DHCB.

                                                                     4.Based on the severity of
       4.Surgery                  4.If any surgery is performed      the surgery a multiple of
                                                                     the plan's DHCB is paid.

       5.Death during the
                                  5.On death                         5.No benefit is payable
       term of the policy


                                  6.At the end of the term of the
       6.Expiry of policy                                            6.No benefit is payable
                                  policy

                                                                     7.No benefit is payable on
       7.Surrender/Lapse          7.On stopping of premiums
                                                                     Surrenders/Lapses



Features & Benefits

.   Hospitalisation Benefits (DHCB)

                  Get a benefit amount if you are hospitalized for more than 24 hours i.e. at least 2
                   consecutive nights and must be charged for 2 days room expenses.
                  The benefit amount is fixed and will be paid irrespective of actual hospitalisation
                   expenses
                   DHCB is payable for hospitalisation up to 90 days per policy year, which
                   includes any days spent in Intensive Care Unit.




                                                    62
2. Intensive Care Unit (ICU) benefit

          An additional 50% of DHCB amount per day is paid to you if you get admitted to an
           Intensive Care Unit (ICU), and this amount is paid depending on the plan chosen.
          The ICU benefit is payable for hospitalisation up to 30 days per policy year, and is
           paid in addition to DHCB.

3. Recuperating benefit

              A post-hospitalisation benefit amount in addition to all other amounts will be paid
               out to ensure that follow-up tests, medicines and consultations go ahead as
               planned .
              You are eligible for recuperating benefit only on being hospitalized continuously
               for 5 or more days DHCB.

4. Surgery benefit

Over and above the hospitalisation expenses, a fixed lump-sum amount is also paid for more than
900 surgical procedures. These surgeries have been classified into four grades, depending on the
type and severity. A sample list of surgeries is given below:

5.Benefit amounts at-a-glance

You can choose any one plan, from the following four options Each plan has fixed benefit
amounts, as shown below:

                                       Plan A         Plan B        Plan C         Plan D
               Benefit
                                        (Rs.)          (Rs.)         (Rs.)          (Rs.)
    Daily Hospitalistion Cash
                                     1,000           2,000         3,000          4,000
    Benefit (per day)
    ICU (Intensive Care Unit)
                                     500             1,000         1,500          2,000
    Benefit per day)
    Recuperating Benefit             3,000           6,000         9,000          12,000
    Surgery Benefit
    Surgery grade 1                  15,000          30,000        45,000         60,000
    Surgery grade 2                  50,000          1,00,000      1,50,000       3,00,000
    Surgery grade 3                  75,000          1,50,000      2,25,000       4,00,000
    Surgery grade 4                  1,00,000        2,00,000      3,00,000       4,00,000


Waiting period – 90 days except accidental claims.




                                                63
                                          Sample Case 1
      In case you opt for plan A, then for an 8-day hospitalisation, your benefit amount is
                        DHCB = 8 days * Rs. 1,000 per day = Rs. 8,000
                                                  +
                                Recuperating Benefit = Rs. 3,000
                          (refer to the table below for benefit amounts)
                                Total benefit amount = Rs. 11,000



                                          Sample Case 2
     In case you opt for plan D, then for an 6-day hospitalisation, including 4 days in ICU,
     with a Grade 2 surgery, your benefit amount is
                        DHCB = 6 days * Rs. 4,000 per day = Rs. 24,000
                                                  +
                  4-day ICU benefit = 4 days * Rs. 2,000 per day = Rs. 8,000
                                                  +
                                                  +
                             Grade 2 Surgery benefit = Rs. 2,00,000
                          (refer to the table below for benefit amounts)


   6. High benefit limits

Hospital Care policy offers you high benefit limits. For instance,under plan A, you can claim up
to Rs.4 lakhs for multiple claims, including surgical benefit up to Rs.3 lakhs annually. However,
for the entire policy term, you can make multiple claims up to Rs.20 lakhs.
     Benefit Limits         Plan A (Rs.)     Plan B (Rs.)     Plan C (Rs.)     Plan D (Rs.)
     Yearly Limit           4,00,000         8,00,000         12,00,000        16,00,000
     Surgical benefit       3,00,000         6,00,000         9,00,000
     Policy Term Limit      20,00,000        40,00,000        60,00,000        80,00,000


Benefits of Hospital Care

Payout in addition to other plans

You can claim benefit amount from this policy as well as any other medical insurance policy you
may have, since the company only requires submission of photocopies or duplicates of bills and
certificates. The lump-sum benefit amount will be paid to you, irrespective of your actual
medical expenses.


                                               64
Cashless hospitalisation

You don't need to make any payment upfront. We shall pay the billed amount upto the benefit
payable under the product, directly to the hospital, as settlement of your dues. This facility is
available through our extensive list of network hospitals across the country. Click here for the list
of network hospitals.

Multiple claims

Life being uncertain, you may incur medical treatment costs several times. You can make
multiple claims during the policy term, so long as the total amount payable does not exceed the
benefit limit you are entitled to.

Transparent coverage norms

This policy is very transparent and informs you upfront about benefit payouts, the coverage and
exclusions. This helps you plan your finances in the event of an emergency, so that you can
concentrate on the treatment.

Guaranteed coverage

Medical eventualities can occur at any time. This policy guarantees you coverage for the entire
policy term, so that you enjoy the benefit of the cover, irrespective of any claims made or a
change in your health status during the policy term.

Tax benefit

The premium paid by you up to Rs.15,000 p.a. is eligible for tax benefit under Section 80 D, as
per prevailing Income Tax laws .

General Exclusions
   1. No benefits shall be payable with respect to any period of Hospital Confinement/ICU
      stay unless the entire confinement / ICU stay and all the Hospital services rendered and
      performed there had been recommended by a physician and are in accordance with the
      diagnosis and treatment of the condition for which hospitilisation was required.
   2. No benefits shall be paid for the following services, products and conditions:

           1. pre-existing illness unless stated in the proposal form and specifically accepted by
              the ompany and endorsed thereon;
           2. hospitalisation and / or treatment within the Waiting Period (as stated in clause 6);
           3. eye tests, refractive errors of the eyes, refractive surgery;




                                                 65
4. any dental surgery, extraction of impacted tooth / teeth, orthodontics or
    orthographic surgery, or Temporo-Mandibular Joint Disorder except as
    necessitated by an accidental injury;
5. treatment arising from pregnancy which shall include childbirth, infertility,
    erectile dysfunction or impotency, miscarriage, abortion, sterilization and
    contraception including any complications relating thereto;
6. treatment for congenital conditions including physical defects present from birth;
7. hospitalisation primarily for investigatory purpose, diagnosis, X-ray examination,
    general physical or routine medical examination; preventive treatments /
    medicines, treatments / examinations specifically for weight reduction or gain
    regardless of whether the same is caused (directly or indirectly) by a medical
    condition; convalescence, custodial, sanitaria, rehabilitation centre, nature cure
    clinics or rest care and similar establishments; or private nursing.
8. treatment arising from any geriatric, psycho-geriatric or psychiatric condition,
    insanity, mental or nervous breakdown or "rest cures";
9. treatment directly or indirectly arising from alcoholism or drug abuse and any
    injury or sickness which the Life Assured may suffer after he has taken
    intoxicating liquors or drugs;
10. treatment directly or indirectly arising from or consequent upon war, commando
    or bomb disposal duties or training, terrorism, invasion, acts of foreign enemies,
    engagement in hostilities, active military and police duties such as maintenance of
    civil order, whether war be declared or not, civil war, rebellion, active
    participation in strikes, riots or civil commotion, revolution, insurrection or
    military or usurped power or travel by military aircraft or waterborne vessel, and
    full- time service in any of the armed forces;
11. Acquired Immune Deficiency Syndrome (AIDS) and all illnesses or diseases
    caused by or related to the Human Immuno-deficiency Virus (HIV);
12. sexually transmitted diseases (STD);
13. cosmetic or plastic surgery except to the extent that such surgery is necessary for
    the repair of damage caused solely by Accidental Injuries, treatment of
    xanthelesema, syringoma, acne and alopecia;
14. study and treatment of sleep apnoea;
15. deliberate exposure to exceptional danger (except in an attempt to save human
    life);
16. nuclear disaster, radioactive contamination and/or release of nuclear or atomic
    energy; and injuries arising out of or in connection with:
17. military duties of a peace-time nature, namely normal training range work and
    military exercises;
18. treatment for injury or illness caused by intentionally self-inflicted injuries; or any
    attempts at suicide while sane or insane;
19. treatment for injury or illness caused by violation or attempted violation of the
    law or resistance to arrest;
20. treatment for injury or illness caused by professional sports, racing of any kind,
    scuba diving, aerial sports, activities such as hand-gliding, ballooning, and any
    other hazardous activities or sports unless agreed by special endorsement;



                                      66
           21. All organ transplant where the Life Assured acts as a donor and all expenses
               incurred by the donor for such organ transplant;
           22. Circumcision unless necessary for treatment of a diseases or necessitated due to
               an accident;
           23. Diagnosis and treatment outside India. However, this exclusion shall not be
               applicable in the following countries: Australia, Brunei, Canada, Dubai, Hong
               Kong, Japan, Malaysia, New Zealand, Singapore, Switzerland, UAE, USA, and
               countries of the European Union. The company may at its discretion review the
               above list of accepted foreign countries from time to time. Claims documents
               from outside India are only acceptable in English language unless specifically
               agreed otherwise, and dully authenticated
           24. Failure to seek or follow reasonable medical advice.
           25. Ayurvedic, Homeopathy, Unani, naturopathy, reflexology, acupuncture, bone-
               setting, herbalist treatment, hypnotism, rolfing, massage therapy, aroma therapy
               or any other treatments other than Allopathy /western medicines.
           26. Hospitilisation and treatment of any kind not actually performed, necessary or
               reasonable, or any kind of elective surgery or treatment which is not medically
               necessary or any surgical procedure not performed in a hospital.


Crisis Cover:
Life is hectic in today's fast paced world. Along with the rapid pace and progress comes the bane
of modern life such as increased stress, poor diet and lack of exercise. The alarming aspect is
that, owing to these factors, more and more Indians are becoming vulnerable to critical illnesses
every year. These illnesses, coupled with increasing costs of treatment, have made recovery a
long and expensive process.

It goes without saying that securing your family's financial future is a part of prudent financial
planning. However, no less important is your health and well-being, for which you need a
comprehensive health coverage. And, given our lifestyles, it should ideally be a plan that
provides complete protection against Disease, Disability and Death.




                                               67
Keeping this need in mind, ICICI Prudential Life Insurance presents Crisis Cover. This all-
inclusive long term insurance policy provides coverage against 35 critical illnesses, total and
permanent disability, and also death.

So, get the right protection tailored to suit your lifestyle, with this plan which is

        Comprehensive
        Affordable
        Long Term


       Eligible Age                        18 years to 60 years


       Coverage term                       10 years to 50 years


       Maximum Coverage Ceasing
                                           75 years
       Age


       Sum Assured                         Rs. 300,000 to Rs. 2,000,000


       Premium payment frequency           Monthly, Half-yearly, Annual


                                           As per prevailing tax laws under Section 80C &
       Tax Benefit
                                           80D


Modes of Premium Payment:
Premiums are payable through any of the following modes:
   1.    Cash*
   2.    Cheques
   3.    Demand Drafts
   4.    Pay Orders
   5.    Bankers Cheque
   6.    Internet facility as approved by the Company from time to time.
   7.    Electronic Clearing System
   8.    Credit Cards (Only standing instruction)
*Amount and Modalities will be subject to company Rules and relevant legislation/regulations


                                                68
Premium Payment frequency:
Your Premium will fall due in every policy year based on the periodicity of payment of
premiums, i.e.
        Yearly,
        Half-Yearly or
        Monthly
How much does the coverage cost?
The most comprehensive coverage is also affordable. Below are the annual premium rates for a
Sum Assured of Rs. 500,000 for various policy terms and entry ages for Males.
       Age(Years)           Policy Term
                            15 years                 20 years             25 years
              25                  Rs. 2435               Rs. 2474             Rs. 2734
              30                  Rs. 2896               Rs. 3204             Rs. 3738
              35                  Rs. 4106               Rs. 4724             Rs. 5576
              40                  Rs. 6282               Rs. 7281             Rs. 8442
              45                  Rs. 9804              Rs. 11,182           Rs. 12,554


The premiums are guaranteed for first five years from the date of commencement of the policy.
Thereafter, the premiums are annually reviewable. Any change in premium will only be effected
with approval from IRDA.
Above premiums are inclusive of modal rebate and Large SA discount & exclusive of any
service tax and education cess.
Waiting Period:
No benefit in respect of Critical Illness Benefit (CIB) or Total & Permanent Disability Benefit
(TPDB) will be payable if it has occurred due to sickness within the first 6 months of the policy
or first 3 months of the policy reinstatement date where the policy has lapsed for more than 3
months.


Key benefits of Crisis Cover
   1. Benefit amount paid on diagnosis of any of the 35 diseases (critical Illnesses), disability
      or death
   2. Receive lump-sum benefit amount irrespective of actual billing
   3. Benefit amount will be paid in addition to payment received by you from other medical
      insurance plan
   4. Long term coverage upto 75 years of age
   5. Coverage continues even after claiming benefit on select critical illness
   6. Premium paid is eligible for deduction under section 80C & section 80D*

                                               69
* The overall limit of deduction for investment u/s 80C & u/s 80D of the Income Tax Act, 1961
are Rs. 1,00,000 & Rs. 15,000 respectively, subject to conditions mentioned therein.


How does Crisis Cover work?
   1. Choose a Sum Assured under Crisis Cover
   2. Pay Premium based on your age and sum assured and term of cover chosen
   3. Get the applicable sum assured in the event of being diagnosed with a critical illness or
      on being rendered totally disabled or on death, whichever occurs first.
   4. Remain covered even after a claim on select Critical Illnesses


Get the Sum Assured on under the plan on first occurrence of Death or Total Permanent
Disability or on diagnosis of any one of the following 35 Critical illnesses.
Flexible Payouts for the 35 Critical Illnesses covered
Flexible payouts for 35 Critical Illnesses covered are as below:
                                                 CI with Coverage Continuation
     with Full Payout Advantage
                                                 Advantage
           Apallic Syndrome
           Benign Brain Tumour                         Angioplasty*
           Blindness                                   Alzheimer's Disease
           Brain Surgery                               Aplastic Anaemia
           Cancer                                      Cardiomyopathy
           Chronic Lung Disease                        Deafness
           Coma                                        Loss of Speech
           Coronary Artery Bypass                      Medullary Cystic Disease
            surgery                                     Motor Neurone Disease
           End stage liver disease                     Multiple Sclerosis
           Heart Attack                                Muscular Dystrophy
           Heart Valve Surgery                         Parkinson’s Disease
           Kidney Failure                              Poliomyelitis
           Loss of Independent existence               Primary Pulmonary hypertension
           Loss of Limbs                               SLE with Lupus Nephritis
           Major Burns
           Major Head Trauma
           Major Organ Transplant
           Paralysis
           Stroke
           Surgery to aorta
           Terminal Illness




                                                70
The Critical Illnesses with Full Payout Advantage: Get the full benefit amount for Critical
Illnesses covered under this category. The benefit amount payable is equal to the full sum
assured chosen under the policy.
The Critical Illnesses with Coverage Continuation Advantage: The maximum benefit amount
payable is Rs. 500,000* for Angioplasty and Rs. 1,000,000 for all other critical illnesses in this
category and the cover continues for all other remaining illnesses benefits for the remaining sum
assured chosen under the policy.The premium is also revised proportionately on the following
Policy anniversary for the reduced Sum Assured.
* 50% of sum assured with a max limit of Rs. 500,000


Death or Total & Permanent Disability
The Full Sum Assured as chosen under the plan is paid in the event of Death or Total Permanent
Disability of the Life Assured. This benefit is payable even if death or disability occurs because
of an accident.


Claims Process made simple
Our claims process is an easy 3-step process. This will ensure that you get a hassle-free and
convenient claims experience.
   1. Submit a written notice along with the proof of diagnosis of the critical illness / disability
      death required for claim.
   2. The company verifies the documents and admits the claim.
   3. The company pays the entire benefit amount as applicable.


    Group Plans
              ICICI Prudential also offers Group Insurance Solutions for companies
       seeking to enhance benefits to their employees.

   1. Group Gratuity Plan:
               ICICI Pru”s group gratuity plan helps employers fund their statutory
       gratuity obligation in a scientific manner. The plan can also customize to
       structure schemes that can provide benefits beyond the statutory obligations.

   2. Group Superannuation Plan:

              ICICI Bank offers flexible defined contribution superannuation scheme to
       provide a retirement kitty for each member of the group. Employees have the
       option of choosing from various annuity options or opting for partial
       commutation of the annuity at the time of retirement.




                                                71
3. Group Term Plan:

         ICICI Pru”s flexible group term solution helps provides affordable cover
   to members of group. The cover could be uniform or based on designation/rank
   or a multiple of salary. The benefit under the policy is paid to the beneficiary
   nominated by the member on his/her death.

4. Flexible Rider Options:
             ICICI Pru Life offers flexible riders, which can be added to the basic
    policy at marginal cost, depending on the specific of the customer.
5. Accident & disability benefit: If death occurs as the result of an accident during
    the term of the policy, the beneficiary receives an additional amount equal to the
    sum assured under the policy. If the death occurs while traveling in an authorized
    mass transport vehicle, the beneficiary will be entitled to twice the sum assured as
    additional benefit.
6. Accident benefit: This rider option pays the sum assured the rider on death due to
    accidents.
7. Critical Illness Benefit: protects the insured against financial loss in the event of 9
    specified critical illnesses. Benefits are payable to the insured for medical prior to
    death.
8. Major Surgical Assistance Benefits: provides financial support in the event of
    medical emergencies, ensuring that benefits are payable to the life assured for
    medical expenses Incurred for surgical procedures. Cove is offered against 43
    different surgical procedures.
9. Income Benefit: This rider pays the 10% of the sum assured to the nominee every
    year, till maturity, in the event of the death of the life assured. It is available on
    SmartKid, SecurePlus and Cashplus.
10. Waiver of Premium: In Case of total and permanent due to an accident, the
    premiums are waived till maturity. This rider is available with SecurePlus and
    CashPlus.




                                             72
                                                             FINANCE DEPARTMENT


INTRODUCTION:

Financial management, as an academic discipline, has undergone fundamental changes in its
scope and coverage. In the early years of its evolution it was treated synonymously with the
raising of funds. In the current literature pertaining to financial

        Management, a broader scope so as to include, in addition to procurement of funds,
efficient use of resources is universally recognized. Similarly, the academic thinking as regards
the objective of financial management is also characterized by a change over the years.

        Financial management, as an integral part of overall management, is not a totally
independent area. It draws heavily on related disciplines and fields of study, such as economics,
accounting, marketing, production and quantitative methods. Although these disciplines are
interrelated, there are key differences among them. The relationship between finance and
accounting, conceptually speaking, has two dimensions:

(1) They are closely related to the extent that accounting is an important input in financial
decision-making and

(2) There are key differences in viewpoints between them.

The viewpoint of accounting relating to the funds of the firm is different from that of finance.
The measurement of funds (income and expenses) in accounting is based on the accrual
principle/system.



Capitalization and Capital Structure:

        Capital structure can affect the value of a company by affecting either its expected
earnings or the cost of capital, or both. While it is true that financing-mix cannot affect the total
operating earnings of a firm, as they are determined by the investment decisions, it can affect the
share of earnings belonging to the ordinary shareholders. The capital structure decision can
influence the value of the firm through the earnings available to the shareholders. But the
leverage can largely influence the value of the firm through the cost of capital. In exploring the
relationship between leverage and value of a firm the relationship between leverage and cost of
capital from the standpoint of valuation.

        The importance of an appropriate capital structure is, thus, obvious. There is a viewpoint
that strongly supports the close relationship between leverage and value of a firm. There is an


                                                 73
equally strong body of opinion, which believes that financing-mix or the combination of debt
and equity has no impact on the shareholders’ wealth and the decision on financial structure is
irrelevant. In other words, there is nothing such as optimum capital structure.

        Capital structure theories are based on certain assumptions, they are:

[1] There are only two sources of funds used by a firm: perpetual risk less debt and ordinary
shares.

[2] There are no corporate taxes. This assumption is removed later.

[3]The dividend-payout ratio is 100. That is, the total earnings are paid out as dividend to the
shareholders and there are no retained earnings.

[4]The total assets are given and do not change. The investment decisions are, in other words,
assumed to be constant.

[5]The total financing remains constant. The firm can change its degree of leverage (capital
structure) either by selling shares and use the proceeds to retire debentures or by raising more
debt and reduce the equity capital.

[6]The operating profits (EBIT) are not expected to grow.

[7]All investors are assumed to have the same subjective probability distribution of the future
expected EBIT for a given firm.

[8]Business risk is constant over time and is assumed to be independent of its capital structure
and financial risk.

[9] Perpetual life of the firm.



Leverage Analysis:

A firm can make use of different sources of financing whose costs are different. These sources
may be, for purposes of exposition, classified into those that carry a fixed rate of return and those
on which the returns vary. The fixed returns on some sources of finance have implications for
those who are entitled to a variable return. Thus, since debt involves the payment of a stated rte
of interest, the return to the ordinary shareholders is affected by the magnitude of debt in the
capital structure of a firm.

The employment of an asset or source of funds for which the firm has to pay a fixed cost or fixed
return may be termed as leverage. Consequently, the earnings available to the shareholders as
also the risk are affected. If earnings les the variable costs exceed the fixed cost, or earnings


                                                 74
before interest and taxes exceed the fixed return requirement, the leverage is called favorable.
When they do not, the result is unfavorable leverage.

There are 2 types of leverage- ‘operating’ and ‘financial’. The leverage associated with
investment (asset acquisition) activities is referred to as operating leverage, while leverage
associated with financing activities is called financial leverage. While we are basically concerned
with financial leverage for purposes of the financing decision of a firm, the discussion of
operating leverage is to serve as a background to the understanding of financial leverage because
the two types of leverage are closely related. Operating leverage is determined by the
relationship between the firm’s sales revenues and its earnings before interest and taxes (EBIT).
The earnings before interest and taxes are also generally called as operating profits. Financial
leverage represents the relationship between the firm’s earnings before interest and taxes
(operating profits) and the earnings available for ordinary shareholders. The operating profits
(EBIT) are thus, used as the pivotal point in defining operating and financial leverage. In a way,
operating and financial leverage represent two stages in the stages in the process of determining
the earnings available to the equity shareholders and, hence, their discussion in this chapter.
Apart from the elaboration of the return-risk implications, their combined effect has also been
discussed.

       Operating leverage results from the existence of fixed operating expenses in the firm’s
income stream. The operating leverage may be defined as the firm’s ability to use fixed operating
costs to magnify the effects of changes in sales on its earnings before interest and taxes.
Operating leverage occurs any time a firm has fixed costs that must be met regardless of volume.
We employ assets with fixed cost in the hope that volume will produce revenues more than
sufficient to cover all fixed and variable costs. In other words, with fixed costs, the percentage
change in profits accompanying a change in volume is greater than the percentage change in
volume. This occurrence is known as operating leverage.

       Financial leverage relates to the financing activities of a firm. The sources from which
funds can be raised by a firm, from the point of view of the cost/charges, can be categorized into
[1] those which carry a fixed financial charge, and [2] those which do not involve any fixed
charge. The sources of funds in the first category consist of various types of long-term debt,
including bonds, debentures, and preference shares. Long-term debts carry a fixed rate of interest
which is a contractual obligation for the firm. Although the dividend on preference shares is not
a contractual obligation, it is fixed charge and must be paid before anything is paid to the
ordinary shareholders. The equity shareholders are entitled to the remainder of the operating
profits of the firm after all the prior obligations are met. Financial leverage results from the
presence of fixed financial charges in the firm’s income stream. These fixed charges do not vary
with the earnings before interest and taxes (EBIT) or operating profits.




                                                75
Capital Budgeting:

Capital budgeting decision pertains to fixed/long-term assets which by definition refer to assets
which are in operation, and yield a return, over a period of time, usually, exceeding one year.
They therefore, involve a current outlay or series of outlays of cash resources in return for an
anticipated flow of future benefits. In other words, the system of capital budgeting is employed
to evaluate expenditure decisions which involve current outlays but are likely to produce benefits
over a period of time longer than one year. These benefits may be either in the form of increased
revenues or reduced costs. Capital expenditure management, therefore, includes addition,
disposition, modification and replacement of fixed assets.

       Capital budgeting decisions are of paramount importance in financial decision-making. In
the first place, such decisions affect the profitability of a firm. They also have a bearing on the
competitive position of the enterprise mainly because of the fact that they relate to fixed assets.
The fixed assets represent, in a sense, the true earning assets of the firm. They enable the firm to
generate finished goods that can ultimately be sold for profit. The current assets are not generally
earning assets. Rather, they provide a buffer that allows the firms to make sales and extend
credit. True, current assets are important to operations, but without fixed assets to generate
finished products that can be converted into current assets, the firm would not be able to operate.
Further, they are ‘strategic’ investment decisions as against ‘tactical’- which involve a relatively
small amount of funds. Therefore, such capital investment decisions may result in a major
departure from what the company has been doing in the past. Acceptance of a strategic
investment will involve a significant change in the company’s expected profits and in the risks to
which these profits will be subject.



Working Capital Management:

Working capital management is concerned with the problems that arise in attempting to manage
the current assets, the current liabilities and the interrelationship that exists between them. The
term current assets refer to those assets which in the ordinary course of business can be, or will
be, converted into cash within one year without undergoing a diminution in value and without
disrupting the operations of the firm. The major current assets are cash, marketable securities,
accounts receivable and inventory.

Current liabilities are those liabilities which are intended, at their inception, to be paid in the
ordinary course of business, within a year, out of the current assets or earnings of the concern.
The basic current liabilities are accounts payable, bills payable, bank overdraft, and outstanding
expenses. The goal of working capital management is to manage the firm’s current assets and
liabilities in such a way that a satisfactory level of working capital, it is likely to become
insolvent and may even be forced into bankruptcy. The current assets should be large enough to
cover its current liabilities in order to ensure a reasonable margin of safety. Each of the current

                                                76
assets must be managed efficiently in order to maintain the liquidity of the firm while not
keeping too high a level of any one of them. Each of the short-term sources of financing must be
continuously managed to ensure that they are obtained ad used in the best possible way. The
interaction between current assets and current liabilities is, therefore, the main theme of the
working capital management.



Receivables Management:

       The receivables represent an important component of the current assets of a firm. The
receivables are defined as ‘debt owned to the firm by customers arising from sale of goods or
services and in the ordinary course of businesses. When a firm makes an ordinary sale of goods
or services and does not receive payment, the firm grants trade credit and creates accounts
receivable, which could be collected in the future. Receivables management is also called trade
credit management. Thus, accounts receivables represent an extension of credit to customers,
allowing them a reasonable period of time in which to pay for the goods received.

        The sale of goods on credit is an essential part of the modern competitive economic
systems. In fact, credit sales and, therefore, receivables are treated as a marketing tool to aid the
sale of goods. The credit sales are generally made on open account in the sense that there are no
formal acknowledgements of debt obligations through a financial instrument. As a marketing
tool, they are intended to promote sales and thereby profits. However, extension of credit
involves risk and cost. Management should weigh the benefits as well as cost to determine the
goal of receivables management. The objective of receivables management is ‘to promote sales
and profits until point is reached where the return on investment in further funding receivables is
less than the cost of funds raised to finance that additional credit (i.e. cost of capital)’. The
specific costs and of receivables management, are:

   1.   Cost
   2.   Collection cost
   3.   Capital cost
   4.   Delinquency cost
   5.   Default cost

Dividend policy:

       Dividend refers to that portion of a firm’s net earnings which are paid out to the
shareholders. Since dividends are distributed out of profits, the alternative to the payment of
dividends is the retention of earnings/profits. The retained earnings constitute an easily
accessible important source of financing the investment requirements of firms. There is, thus, a
type of inverse relationship between retained earnings and cash dividends. Larger the retention,


                                                 77
lesser dividends; and smaller retentions, larger dividends. Thus, the alternative uses of the net
earnings-dividends and retained earnings-are competitive and conflicting.

        A major decision of financial management is the dividend decision in the sense that the
firm has to choose between distributing the profits to the shareholders and plugging them back
into the business. The choice would obviously hinge on the effect of the decision on the
maximizing present values; the firm should be guided by the consideration as to which
alternative use is consistent with the goal of wealth maximization. That is, the firm would be
well advised to use the net profits for paying dividends to the shareholders if the payment will
lead to the maximization of wealth of the owners. If not, the firm should rather retain them to
finance investment programes. The relationship between dividends and value of the firm should,
therefore, be the decision criterion.

       There are however, conflicting opinions regarding the impact of dividends on the
valuation of a firm. According to one school of thought, dividends are irrelevant so that the
amount of dividends paid has no effect on the valuation of a firm. On the other hand certain
theories consider the dividend decision as relevant to the value of the value of the firm
measured in terms of the market price of the shares. The crux of the argument supporting the
irrelevance of dividends to valuation is that the dividend policy of a firm is a part of its
financing decision.

      As a part of the financing decision, the dividend policy of the firm is a residual decision
and dividends are a passive residual. If the dividend policy is strictly a financing decision,
whether dividends are paid out of profits, or earnings are retained, will depend upon the
available investment opportunities. It implies that when a firm has sufficient investment
opportunities, it will retain the earnings to finance them. Conversely, if acceptable investment
opportunities are inadequate, the implication is that the earnings would be distributed to the
shareholders.

The test of adequate acceptable investment opportunities is the relationship between the return
on investments and the cost of capital. As long as investments exceed cost of capital, a firm has
acceptable investment opportunities. In other words, ifs firm can earn a return higher tan its cost
of capital; it will retain the earnings to finance investment projects. If the retained earnings fall
short of the total funds required, it will raise external funds-both equity and debt-to make up the
shortfall.




                                                 78
                               RESEARCH DESIGN AND METHODOLOGY


    Objectives:
   To Study the Brand awareness of the new product i.e. Unit Linked Insurance
    Plans in Meerut City.
   To know what are the priorities of people of city for making investment in
    Insurance.
   To know what are the perception of the consumer about ICICI Prudential Life
    Insurance Co.
   To know the standing of the ICICI Prudential Life Insurance Co. in Meerut City.


 Data Source:

    The data would be collected from both primary as well as secondary source.
    Consumers would be asked to fill questionnaires to arrive at the information.
    Various secondary sources of data as magazines, journal, Internet etc. would also
    be explored.



 Sampling Area:

       The sampling areas of this research are Meerut.



 Sampling method:

           The convenient sampling method was used for this research and the
    respondents were those who have already taken life insurance policy.



 Sample Size:

           The size of this research is 50 respondents.




                                            79
 Research Instrument:

          The research instruments, which was used, for collecting the data is
   questionnaire.



 Method of contact:

           The method of contact would be personal and direct as this would help to
   qualify the customer’s issues while filling up the questionnaire and also helps
   them if they do not have the knowledge about any insurance plan of the company.



 Method of making an approach for Sales:

          After analyzing the data form the questionnaires the needs of prospects
   were identified and the best suitable insurance solution was suggested to them
   accordingly.



 Data Collection and Analysis



   Q.1.Do you have a Life Insurance Policy?

                Criteria                    No. Of Respondents

                  Yes                                50

                   No                                 0



   As our sample is those people who have insurance so all the respondents are
   falling under the “Yes” criteria.




                                          80
Q.2.Which Company’s Insurance Policies do you have?



                       Company                       No. of Respondents

         LIC                                                  50

         Birla Sunlife                                         2

         SBI                                                   3

         ICICI Pru. Life                                      10

         Kotak Mahindra                                        3

         Post Office                                          15

         HDFC                                                  3




                               No. of Respondents

                            60
                            50
            No. of          40
                            30
            Respondents     20
                            10
                             0
                                  LIC        SBI         Mahindra HDFC
                                                       Kotak




       As from the above chart it is very clear the all of the respondents have an
insurance of the LIC while some of them have an insurance of the other
companies like post Office, ICICI Prudential Life insurance Co., HDFC Co. Etc.

       The reason behind this is that the LIC competitor since more than four
decades and the Indian Govt. allowed the Introduction of private player in
Insurance in the year 2000.



                                        81
     Q.3What is amount of insurance premium you pay annually?

                          Criteria                 No. of Respondents

                   Below Rs. 10,000                        11

                   10,000 to 20,000                        18

                   20,000 to 30,000                        6

                   30,000 to 40,000                        5

                     Above 40,000                          10



     The analysis of the above available data is merely to find out the percentage of
     income that one is willing to invest in insurance.

     Q.4What priorities would you consider most important, while purchasing a
          policy?



Criteria/Rank         1              2            3             4          5            Total

Death Benefit        29              10           6             2          3             50

 Children’s           7              13           21            3          0             44
  Future

 Retirement           5              5            6             20         7             43
  Planning

Tax Planning          8              18           8             8          6             48

  Financial           2              5            3             11         25            46
  Planning



     From the table and chart it can be say that most of the people rank death benefit
     first for the decision to make investment in Insurance. Their second priority is tax
     planning because the premium, which is paid by the people towards Insurance, is
     deductible up to certain limit from the income and also the maturity amount is
     also tax free. The third and fourth priorities are children’s future and retirement
     planning.
                                             82
Q.5    Do you have any knowledge of the stock market?



              Criteria                No. of Respondents

                Yes                           32

                 No                           18



Q.6If “Yes” do you have any knowledge about unit linked insurance plans?



              Criteria                No. of Respondents

                Yes                           25

                 No                            7



The question number 5 and 6 are designed to know the awareness of people who
have knowledge of share market or deals in shares also have the knowledge of the
new modern insurance product i.e. Unit Linked Insurance Plan. From the
available data it can be say that those who deal in shares are also aware of the
ULIP.



Q.7Is your current Insurance policy “Unit Linked” or “Traditional?



               Criteria              No. of Respondents

          Only Unit Linked                    0

           Only Traditional                   39

                 Both                         11




                                      83
   From the Q. No. 7 we can say that even though the modern products available in
   the market since more than two years and which are having the more flexibility
   and also giving the higher return than traditional one most of the people do not
   have or may be not aware of it which shows the lack of brand awareness and it
   requires an aggressive promotional efforts on the part of company.

   There is a lot of scope available for the company to attract more customers by
   giving or introducing most suitable ULIP products and at the same time increase
   the customer base.



   Q.8 If given a choice, where would you like to invest your money?

             (Please Rank Your Choice)

Choice/Rank         1       2       3        4        5       6        7        8     Total

Mutual Fund         0       1       5        1       25       12       5        1          50

 Insurance          4      12       14       4        8       3        0        0          45

    Gold            4       8       1        2        2       5       13       13          48

  Equities          17      3       0        5        2       6        1        0          34

 Post Office        22     12       12       2        2       0        0        0          50

 Debenture          0       2       4       10        1       14       2        0          33

Bank Deposit        0       6       12      19        1       0        3        1          42

   Other            10      5       0        2        1       0        0        2          20



   This question is mainly designed to know the investment priorities of the people
   of Ahmedabad town. The objective behind this Q. is that after the Charotar
   Nagrik Co-oprerative Bank and other Credit Societies, which are giving higher
   interest on deposits, the whole scenario of city is changed. Most of the people
   prefer to invest in post office saving schemes and where their money is safe even
   though the return is very less. So there is a great need to divert the efforts of the
   company towards the safety and security as ICICI Prulife is a private insurance
   Company.

                                            84
  Q.9    According to you what are the factors that would affect you decision
         while purchasing an insurance policy?

Criteria/Rank         1           2            3             4          5           50

  Premium            12           15           15            6          2           50

   Return            21           17           8             2          2           50

   Safety            20           14           15            1          0           50

  Liquidity           1           1            9             18         21          50

   Market             1           2            0             16         21          40
  Condition



          The question No. 9 is designed to know which the factors are affecting the
  most to the prospect while making decision to invest in insurance. As far as
  investment in insurance is concerned most of the people want that it should be
  safe and at the same time giving the compatible returns because insurance is not
  only for death benefit it is also a saving tool for future. So the mix response of
  respondents is welcomed. Available data is such that there is a bit ambiguity. But
  we can say that the most affecting factors to the prospect are return and safety. As
  per the finance theory risk and return goes in hand in hand but as far as insurance
  is concerned it is all about the compatible and safe returns over others.



  Q. 10 Are you or ay of your family members are planning to buy an
        insurance policy in near future?



                      Criteria                 No. of Respondents

                          Yes                           13

                          No                            37




                                          85
This question is taken to collect the information of those respondents who are
going to plan to purchase insurance within near future that is used by the company
for making personal contact for sale.



Q. 11 Are your needs satisfied with your current investment in insurance?



                      Criteria                   No. of Respondents

                        Yes                             10

                        No                              30



Q. 11(a)        If “No”, then give reasons?



           Criteria              No. of Respondents

      High Premium                           0

       Low Return                            1

      Poor Services                          7

           Others                            2



The question No.11 and 12 are designed to know the percentage of people who
are not satisfied with the current investment in insurance and also to know the
reasons behind it. So, that the company can focus on those areas where the
competitors fail. Because now a days the competition is very stiff in the insurance
industry. All companies are trying to attract more customers by anyhow. So it will
be useful for designing the promotional schemes of the company.

        From the above table and chart it can be seen that the respondents who are
dissatisfied give the main reason behind it are poor services. There are many
others reasons like more time taken by the company for claim settlement, non-
dispatchment of cheques and other important vouchers, etc. So the company can



                                        86
improve upon these and increase its market share by offering quality service to
the customers.

Q. 12 Do you know anything ICICI Prudential Life Insurance?

              Criteria                 No. of Respondents

                 Yes                              30

                 No                               20



Q. 13 If “Yes”, from where did you come to know about the company?

          Criteria                No. of Respondents

         Television                          4

        News Paper                           3

   Sales Representative                      14

       Others source                         9




Q. 14 What do you feel about “ICICI Prudential Life Insurance?

       (Open Ended)

        The question No.13, 14 and 15 are designed to know the company
awareness the respondents of the city and also the source of awareness. But I felt
very much difficulty while filling up these questions because most of the people
know about the company but they know it as an ICICI Bank not as a different
identity. So there is a great need to design the advertisement campaign in such a
way that it will create the different image of the company. The main reason
behind this is that the image of ICICI Bank in city is such that most of the people
ask for charges first than the service that it provides.




                                        87
                                                                      QUESTIONNAIRE


Q.1.   Do you have a Life Insurance Policy?

             Yes            No     



Q.2.   Which Company’s Insurance Policies do you have?

             (Please specify the numbers)



             LIC                                    SBI Life Insurance          

             HDFC Standard Life                     New York MaxLife            

             Birla Sunlife                          Alliance Bajaj              

             Cholamandalam                          ICICI Pru. Life Insurance   

             TATA AIG Insurance                     MetLife Insurance           

             ING Vysya                              OM Kotak Mahindra           

             AVIVA Life                             AMP Sanmar                  



Q.3    What is amount of insurance premium you pay annually?



             Amount



Q.4 What priorities would you consider most important, while purchasing a
policy? (Please Rank Your Choice)



             Death Benefit          

             Children’s Education           


                                                88
             Retirements Benefit         

             Tax Planning                

             Financial Planning          



Q.5   you have any knowledge of the stock market?

             Yes           No     



Q.6   If “Yes” do you have any knowledge about unit linked insurance plans?

             Yes           No     



Q.7   Is your current Insurance policy “Unit Linked” or “Traditional?

             Yes           No     



Q.8   If given a choice, where would you like to invest your money?

             (Please Rank Your Choice)

             Mutual Funds                        Post Office Schemes         

             Insurance Policies                  Debentures                  

             Gold                                Banks (FD’s etc.)           

             Equities                            If other (specify)___________



Q.9 According to you what are the factors that would affect you decision while
purchasing an insurance policy?

             (Please Rank Your Choice)

             Premium                     

             Return                      


                                             89
             Safety                        

             Liquidity                     

             Market Condition              



Q. 10 Are you or any of your family members are planning to buy an insurance
policy in near future?

             Yes           No    



Q. 11 Are your needs satisfied with your current investment in insurance?

             Yes           No    



Q. 11 (a)    If “No”, then give reasons?

             High Premium                          Poor Services         

             Low Return                            Other Reasons__________

                                                    ______________________



Q. 12 Do you know anything ICICI Prudential Life Insurance?

             Yes           No    



Q. 13 If “Yes”, from where did you come to know about the company?

             T.V.                 Newspaper               Magazine    

             Radio                Internet                Hoarding    



             Others (Please Specify)_____________________________




                                               90
Q. 14 What do you feel about “ICICI Prudential Life Insurance?

      __________________________________________________________________
      __________________________________________________________________
      _______________




                                         91
                                                                   SWOT ANALYSIS


 Strengths



       1.   Flexible Products
       2.   Partners having experience in different markets of the world.
       3.   Synergy with exiting operations
       4.   Expertise in the field of insurance
       5.   Professional management
       6.   Good Customer service
       7.   Create a brand name



 Weakness



1. Low capital base
2. Yet to build strong distribution network
3. Cannot tap rural market



 Opportunities



1. Untapped market
2. Banks ready to tie up for as a readymade distribution network for a small fee.



 Threats



1. Large distribution network of LIC
2. Decades of experience and brand name of LIC
3. 5% service tax on investments.




                                              92
                                                                              CONCLUSION


So according to the data available from the survey one can conclude that even though the Unit
Linked Insurance Plans are very much popular in Metro and semi cities, the product awareness
of ULIP is very low among the people of city and at the same time there is a need to create the
different image of the company among the people by any means like advertisement, seminars or
meetings.

Competition will surely cause the market to grow beyond current rates, create a bigger "pie," and
offer additional consumer choices through the introduction of new products, services, and price
options. Yet, at the same time, public and private sector companies will be working together to
ensure healthy growth and development of the sector. Challenges such as developing a common
industry code of conduct, contributing to a common catastrophe reserve fund, and chalking out
agreements between insurers to settle claims to the benefit of the consumer will require
concerted effort from both sectors.

The market is now in an evolving phase where one can expect a lot of actions in coming days.
The current impediments for foreign participation – like 26% equity cap on foreign partner, ill
defined regulatory role of IRDA (Insurance Regulatory development Authority- the watchdog of
the industry) in pension business etc.—are expected to be removed in near future. The early-
adopters will then have a clear advantage compared to laggards in gaining the market share and
market leadership. The will need to make sure right now that all their infrastructure is in place so
that they can reap the benefit of an "unlimited potential."




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                                               BIBLIOGRAPHY


 WEBSITES

  www.iciciprulife.com
  www.irdaindia.com
  www.bimaonline.com
  www.icicibank.com



 MAGZINES


    India today

    Outlook Express

    Business Today

    Business and Economy



 MATERIALS



   ICICI Prudential literature and brochures

   LIC literature and brochures




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Description: Field Study in Insurance Sector. In depth analysis and study of insurance sector