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1.I NTRODUCTI ON

Life insurance (or commonly life assurance, especially in the Commonwealth) is a contract
between an insured (insurance policy holder)and an insurer or assurer, where the insurer
promises to pay a designated beneficiary a sum of money (the "benefits") in exchange for a
premium, upon the death of the insured person. Depending on the contract, other events such
as terminal illness or critical illness may also trigger payment. The policy holder typically
pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses)
are also sometimes included in the benefits.
Life policies are legal contracts and the terms of the contract describe the limitations of the
insured events. Specific exclusions are often written into the contract to limit the liability of
the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil
commotion.
Life-based contracts tend to fall into two major categories:
Protection policies designed to provide a benefit in the event of specified event,
typically a lump sum payment. A common form of this design is term insurance.
Investment policies where the main objective is to facilitate the growth of capital by
regular or single premiums. Common forms (in the US) are whole life, universal life,
and variable life policies.




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2.History

Insurance began as a way of reducing the risk to traders, as early as 2000 BC in China
and 1750 BC in Babylon. An early form of life insurance dates to Ancient Rome;
"burial clubs" covered the cost of members' funeral expenses and assisted survivors
financially.
Amicable Society for a Perpetual Assurance Office, established in 1706, was the first
life insurance company in the world.
Modern life insurance policies were established in the early 18th century. The first
company to offer life insurance was the Amicable Society for a Perpetual Assurance
Office, founded in London in 1706 by William Talbot and Sir Thomas Allen. The first
plan of life insurance was that each member paid a fixed annual payment per share on
from one to three shares with consideration to age of the members being twelve to
fifty-five. At the end of the year a portion of the "amicable contribution" was divided
among the wives and children of deceased members and it was in proportion to the
amount of shares the heirs owned. Amicable Society started with 2000 members.
The first life table was written by Edmund Halley in 1693, but it was only in the
1750s that the necessary mathematical and statistical tools were in place for the
development of modern life insurance. James Dodson, a mathematician and actuary,
tried to establish a new company that issued premiums aimed at correctly offsetting
the risks of long term life assurance policies, after being refused admission to
the Amicable Life Assurance Society because of his advanced age. He was
unsuccessful in his attempts at procuring a charter from the government before his
death in 1757.
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His disciple, Edward Rowe Mores, was finally able to establish the Society for
Equitable Assurances on Lives and Survivorship in 1762. It was the world's
first mutual insurer and it pioneered age based premiums based on mortality
rate laying the framework for scientific insurance practice and development and
the basis of modern life assurance upon which all life assurance schemes were
subsequently based.
Mores also specified that the chief official should be called an actuary - the earliest
known reference to the position as a business concern. The first modern actuary
was William Morgan, who was appointed in 1775 and served until 1830. In 1776 the
Society carried out the first actuarial valuation of liabilities and subsequently
distributed the first reversionary bonus (1781) and interim bonus (1809) among its
members. It also used regular valuations to balance competing interests. The Society
sought to treat its members equitably and the Directors tried to ensure that the
policyholders received a fair return on their respective investments. Premiums were
regulated according to age, and anybody could be admitted regardless of their state of
health and other circumstances.

The sale of life insurance in the U.S. began in the late 1760s. The Presbyterian Synods
in Philadelphia and New York City created the Corporation for Relief of Poor and
Distressed Widows and Children of Presbyterian Ministers in
1759; Episcopalian priests organized a similar fund in 1769. Between 1787 and 1837
more than two dozen life insurance companies were started, but fewer than half a
dozen survived.
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3.OVERVI EW

Parties to contract : There is a difference between the insured and the policy
owner, although the owner and the insured are often the same person. For example, if
Joe buys a policy on his own life, he is both the owner and the insured. But if Jane, his
wife, buys a policy on Joe's life, she is the owner and he is the insured. The policy
owner is the guarantor and he will be the person to pay for the policy. The insured is a
participant in the contract, but not necessarily a party to it. Also, most companies
allow the payer and owner to be different, e. g. a grandparent paying premiums for a
policy on a child, owned by a grandchild.

The beneficiary receives policy proceeds upon the insured person's death. The owner
designates the beneficiary, but the beneficiary is not a party to the policy. The owner
can change the beneficiary unless the policy has an irrevocable beneficiary
designation. If a policy has an irrevocable beneficiary, any beneficiary changes,
policy assignments, or cash value borrowing would require the agreement of the
original beneficiary.
In cases where the policy owner is not the insured (also referred to as the celui qui
vit or CQV), insurance companies have sought to limit policy purchases to those with
an insurable interest in the CQV. For life insurance policies, close family members
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and business partners will usually be found to have an insurable interest. The
insurable interest requirement usually demonstrates that the purchaser will actually
suffer some kind of loss if the CQV dies. Such a requirement prevents people from
benefiting from the purchase of purely speculative policies on people they expect to
die. With no insurable interest requirement, the risk that a purchaser would murder the
CQV for insurance proceeds would be great. In at least one case, an insurance
company which sold a policy to a purchaser with no insurable interest (who later
murdered the CQV for the proceeds), was found liable in court for contributing to
the wrongful death of the victim (Liberty National Life v. Weldon, 267 Ala.171
(1957).
Contract terms: Special exclusions may apply, such as suicide clauses, whereby the
policy becomes null and void if the insured commits suicide within a specified time
(usually two years after the purchase date; some states provide a statutory one-year
suicide clause). Any misrepresentations by the insured on the application may also be
grounds for nullification. Most US states specify a maximum contestability period,
often no more than two years. Only if the insured dies within this period will the
insurer have a legal right to contest the claim on the basis of misrepresentation and
request additional information before deciding whether to pay or deny the claim.The
face amount of the policy is the initial amount that the policy will pay at the death of
the insured or when the policy matures, although the actual death benefit can provide
for greater or lesser than the face amount. The policy matures when the insured dies
or reaches a specified age (such as 100 years old).

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Costs, insurability, and underwriting: The insurer (the life insurance company)
calculates the policy prices with intent to fund claims to be paid and administrative
costs, and to make a profit. The cost of insurance is determined using mortality tables
calculated by actuaries. Actuaries are professionals who employ actuarial science,
which is based on mathematics (primarily probability and statistics). Mortality tables
are statistically based tables showing expected annual mortality rates. It is possible to
derive life expectancy estimates from these mortality assumptions. Such estimates can
be important in taxation regulation.
The three main variables in a mortality table are commonly age, gender, and use
of tobacco, but more recently in the US, preferred class-specific tables have been
introduced. The mortality tables provide a baseline for the cost of insurance, but in
practice these mortality tables are used in conjunction with the health and family
history of the individual applying for a policy to determine premiums and insurability.
Mortality tables currently in use by life insurance companies in the United States are
individually modified by each company using pooled industry experience studies as a
starting point. In the 1980s and 1990s, the SOA 197580 Basic Select & Ultimate
tables were the typical reference points, while the 2001 VBT and 2001 CSO tables
were published more recently. The newer tables include separate mortality tables
for smokers and non-smokers, and the CSO tables include separate tables for
preferred classes.
Recent US mortality tables predict that roughly 0.35 in 1,000 non-smoking males
aged 25 will die during the first year of coverage after underwriting. Mortality
approximately doubles for every extra ten years of age, so the mortality rate in the
first year for underwritten non-smoking men is about 2.5 in 1,000 people at age
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65. Compare this with the US population male mortality rates of 1.3 per 1,000 at age
25 and 19.3 at age 65 (without regard to health or smoking status).
The mortality of underwritten persons rises much more quickly than the general
population. At the end of 10 years the mortality of that 25 year-old, non-smoking
male is 0.66/1000/year. Consequently, in a group of one thousand 25-year-old males
with a $100,000 policy, all of average health, a life insurance company would have to
collect approximately $50 a year from each participant to cover the relatively few
expected claims. (0.35 to 0.66 expected deaths in each year x $100,000 payout per
death = $35 per policy). Other costs, such as administrative and sales expenses, also
need to be considered when setting the premiums. A 10 year policy for a 25-year-old
non-smoking male with preferred medical history may get offers as low as $90 per
year for a $100,000 policy in the competitive US life insurance market.
Most of the revenue received by insurance companies consists of premiums paid by
policy holders, with some additional money being made through the investment of
some of the cash raised from premiums. Rates charged for life insurance increase with
the insured's age because, statistically, people are more likely to die as they get older.
The insurance company will investigate the health of an applicant for a policy to
assess the likelihood of incurring a claim, in the same way that a bank would
investigate an applicant for a loan to assess the likelihood of a default. Group
Insurance policies are an exception to this. This investigation and resulting evaluation
of the risk is termed underwriting. Health and lifestyle questions are asked, with
certain responses or revelations possibly meriting further investigation. Life insurance
companies in the United States support the Medical Information Bureau (MIB), which
is a clearing house of information on persons who have applied for life insurance with
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participating companies in the last seven years. As part of the application, the insurer
often requires the applicant's permission to obtain information from their physicians.
Underwriters will determine the purpose of insurance; the most common being to
protect the owner's family or financial interests in the event of the insured's death.
Other purposes include estate planning or, in the case of cash-value contracts,
investment for retirement planning. Bank loans or buy-sell provisions of business
agreements are another acceptable purpose.
Life insurance companies are never legally required to underwrite or to provide
coverage to anyone, with the exception of Civil Rights Act compliance requirements.
Insurance companies alone determine insurability, and some people, for their own
health or lifestyle reasons, are deemed uninsurable. The policy can be declined or
rated (increasing the premium amount to compensate for a greater probability of a
claim).
Many companies separate applicants into four general categories. These categories
are preferred best, preferred, standard, and tobacco. Preferred best is reserved only for
the healthiest individuals in the general population. This may mean, that the proposed
insured has no adverse medical history, is not under medication for any condition, and
his family (immediate and extended) have no history of early-onset cancer, diabetes,
or other conditions. Preferred means that the proposed insured is currently under
medication for a medical condition and has a family history of particular illnesses.

Most people are in the standard category. People in the tobacco category typically
have to pay higher premiums due to the inherent health problems that smoking
tobacco creates. Profession, travel history, and lifestyle factor into whether the
proposed insured will be granted a policy, and which category the insured falls. For
example, a person who would otherwise be classified as preferred best may be denied
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a policy if he or she travels to a high risk country. Underwriting practices can vary
from insurer to insurer, encouraging competition.

Death proceeds: Upon the insured's death, the insurer requires acceptable proof of
death before it pays the claim. The normal minimum proof required is a death
certificate, and the insurer's claim form completed, signed, and typically notarized. If
the insured's death is suspicious and the policy amount is large, the insurer may
investigate the circumstances surrounding the death before deciding whether it has an
obligation to pay the claim.
Payment from the policy may be as a lump sum or as an annuity, which is paid in
regular installments for either a specified period or for the beneficiary's lifetime.
Insurance vs assurance: The specific uses of the terms "insurance" and
"assurance" are sometimes confused. In general, in jurisdictions where both terms are
used, "insurance" refers to providing coverage for an event that might happen (fire,
theft, flood, etc.), while "assurance" is the provision of coverage for an event that
is certain to happen. In the United States both forms of coverage are called
"insurance" for reasons of simplicity in companies selling both products. By some
definitions, "insurance" is any coverage that determines benefits based on actual
losses whereas "assurance" is coverage with predetermined benefits irrespective of the
losses incurred.

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4.TYPES OF LI FE I NSURANCE

Life insurance may be divided into two basic classes: temporary and permanent; or the
following subclasses: term, universal, whole life, and endowment life insurance.
Term insurance: Term assurance provides life insurance coverage for a specified term.
The policy does not accumulate cash value. Term is generally considered "pure" insurance,
where the premium buys protection in the event of death and nothing else.
There are three key factors to be considered in term insurance:
1. Face amount (protection or death benefit),
2. Premium to be paid (cost to the insured), and
3. Length of coverage (term).
Annual renewable term is a one-year policy, but the insurance company guarantees it will
issue a policy of an equal or lesser amount regardless of the insurability of the applicant, and
with a premium set for the applicant's age at that time.
Level premium term can be purchased in 5, 10, 15, 20, 25, 30 or 35 year terms. The premium
and death benefit stays level during these terms.
Another common type of term insurance is mortgage life insurance, which usually involves a
level-premium, declining face value policy. The face amount is intended to equal the amount
of the mortgage on the policy owner's property, such that any outstanding amount on the
applicant's mortgage will be paid should the applicant die.

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Permanent life insurance: Permanent life insurance is life insurance that remains active
until the policy matures, unless the owner fails to pay the premium when due. The policy
cannot be cancelled by the insurer for any reason except fraudulent application, and any such
cancellation must occur within a period of time (usually two years) defined by law. A
permanent insurance policy accumulates a cash value, reducing the risk to which the
insurance company is exposed, and thus the insurance expense over time. This means that a
policy with a million dollar face value can be relatively expensive to a 70-year-old. The
owner can access the money in the cash value by withdrawing money, borrowing the cash
value, or surrendering the policy and receiving the surrender value.
The four basic types of permanent insurance are whole life, universal life, limited pay,
and endowment.
Whole life coverage: Whole life insurance provides lifetime death benefit coverage
for a level premium in most cases. Premiums are much higher than term insurance at
younger ages, but as term insurance premiums rise with age at each renewal, the
cumulative value of all premiums paid across a lifetime are roughly equal if policies
are maintained until average life expectancy. Part of the insurance contract stipulates
that the policyholder is entitled to a cash value reserve, which is part of the policy and
guaranteed by the company. This cash value can be accessed at any time
through policy loans and are received income tax free. Policy loans are available until
the insured's death. If there are any unpaid loans upon death, the insurer subtracts the
loan amount from the death benefit and pays the remainder to the beneficiary named
in the policy.
While the marketing divisions of some life insurance companies often explain whole
life as a "death benefit with a savings component", this distinction is artificial
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according to life insurance actuaries Albert E. Easton and Timothy F. Harris. The net
amount at risk is the amount the insurer must pay to the beneficiary should the insured
die before the policy has accumulated an amount equal to the death benefit. It is the
difference between the current cash value amount and the total death benefit amount.
Because of this relationship between the cash value and death benefit, it may be more
accurate to describe the policy as a single, indivisible product, as no actual separation
of the cash value and death benefit is possible.
The advantages of whole life insurance are guaranteed death benefits, guaranteed cash
values, fixed, predictable annual premiums, and mortality and expense charges that
will not reduce the cash value of the policy. The disadvantages of whole life are
inflexibility of premiums and the fact that the internal rate of return in the policy may
not be competitive with other savings alternatives. The death benefit can also be
increased through the use of policy dividends, though these dividends cannot be
guaranteed and may be higher or lower than historical rates over time. According to
internal documents from some life insurance companies, like Mass Mutual, the
internal rate of return and dividend payment realized by the policyholder is often a
function of when the policyholder buys the policy and how long that policy remains in
force. Dividends paid on a whole life policy can be utilized in many ways.
The life insurance manual defines policy dividends as a refund of overpayment of
premiums. It is NOT the same as stock dividends.
Universal life coverage: Universal life insurance (UL) is a relatively new insurance
product, intended to combine permanent insurance coverage with greater flexibility in
premium payment, along with the potential for greater growth of cash values. There
are several types of universal life insurance policies which include interest
sensitive (also known as "traditional fixed universal life insurance"), variable
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universal life (VUL), guaranteed death benefit, and equity indexed universal life
insurance.
A universal life insurance policy includes a cash value. Premiums increase the cash
values, but the cost of insurance (along with any other charges assessed by the
insurance company) reduces cash values.
Universal life insurance addresses the perceived disadvantages of whole life namely
that premiums and death benefit are fixed. With universal life, both the premiums and
death benefit are flexible. Except with regards to guaranteed death benefit universal
life, this flexibility comes with the disadvantage of reduced guarantees.
Flexible death benefit means the policy owner can choose to decrease the death
benefit. The death benefit could also be increased by the policy owner, but that would
typically require the insured to go through a new underwriting. Another feature of
flexible death benefit is the ability to choose from option A or option B death
benefits, and to change those options during the life of the insured. Option A is often
referred to as a level death benefit. Generally speaking, the death benefit will remain
level for the life of the insured and premiums are expected to be lower than policies
with an Option B death benefit. Option B pays the face amount plus the cash value. If
cash values grow over time, so would the death benefit which is payable to the
insured's beneficiaries. If cash values decline, the death benefit would also decline.
Presumably, option B death benefit policies would require higher premiums than
option A policies.


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Limited-pay: Another type of permanent insurance is Limited-pay life insurance, in
which all the premiums are paid over a specified period after which no additional
premiums are due to the policy in force. Common limited pay periods include 10-
year, 20-year, and are paid out at the age of 65.
Endowments: Endowments are policies in which the cumulative cash value of the
policy equals the death benefit at a certain age. The age at which this condition is
reached is known as the endowment age. Endowments are considerably more
expensive (in terms of annual premiums) than either whole life or universal life
because the premium paying period is shortened and the endowment date is earlier.
In the United States, the Technical Corrections Act of 1988 tightened the rules on tax
shelters (creating modified endowments). These follow tax rules in the same manner
as annuities and IRAs.
Endowment insurance is paid out whether the insured lives or dies, after a specific
period (e.g. 15 years) or a specific age (e.g. 65).
Accidental death: Accidental death is a limited life insurance designed to cover the
insured should they die due to an accident. Accidents include anything from an injury
and upwards, but do not typically cover deaths resulting from health problems or
suicide. Because they only cover accidents, these policies are much less expensive
than other life insurance policies.
It is also very commonly offered as accidental death and dismemberment
insurance (AD&D) policy. In an AD&D policy, benefits are available not only for
accidental death, but also for the loss of limbs or bodily functions, such as sight and
hearing.
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Accidental death and AD&D policies very rarely pay a benefit, either because the
cause of death is not covered by the policy, or the coverage is not maintained after the
accident until death occurs. To be aware of what coverage they have, an insured
should always review their policy for what it covers and what it excludes. Often, it
does not cover an insured who puts themselves at risk in activities such as
parachuting, flying, professional sports, or involvement in a war (military or not).
Accidental death benefits can also be added to a standard life insurance policy as a
rider. If this rider is purchased, the policy will generally pay double the face amount if
the insured dies due to an accident. This used to be commonly referred to as a double
indemnity policy. In some cases, insurers may even offer triple indemnity cover.


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5.RELATED PRODUCTS
Riders are modifications to the insurance policy added at the same time the policy is
issued. These riders change the basic policy to provide some feature desired by the
policy owner. A common rider is accidental death (see above). Another common rider
is a premium waiver, which waives future premiums if the insured becomes disabled.
Joint life insurance is either a term or permanent policy insuring two or more persons
with the proceeds payable on either the first or second death.
Survivorship life is a whole life policy insuring two lives with the proceeds payable
on the second (later) death.
Single premium whole life is a policy with only one premium which is payable at the
time the policy matures.
Modified whole life is a whole life policy featuring smaller premiums for a specified
period of time, after which the premiums increase for the remainder of the policy.

1. Group life insurance: Group life insurance (also known as wholesale life
insurance or institutional life insurance) is term insurance covering a group of
people, usually employees of a company, members of a union or association,
or members of a pension or superannuation fund. Individual proof of
insurability is not normally a consideration in the underwriting. Rather, the
underwriter considers the size, turnover, and financial strength of the group.
Contract provisions will attempt to exclude the possibility of adverse
selection. Group life insurance often includes a provision for a member exiting
the group to buy individual coverage.
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2. Senior and preneed products: Insurance companies have in recent years
developed products to offer to niche markets, most notably targeting the senior
market to address needs of an aging population. Many companies offer
policies tailored to the needs of senior applicants. These are often low to
moderate face value whole life insurance policies, to allow a senior citizen
purchasing insurance at an older issue age an opportunity to buy affordable
insurance. This may also be marketed as final expense insurance, and an agent
or company may suggest that the policy proceeds could be used for end-of-life
expenses.
Preneed life insurance policies are limited premium payment whole life
policies that, although available at almost any age, are usually purchased by
older applicants. This type of insurance is designed to cover
specific funeral expenses when the insured person dies, which the applicant
has designated in a preneed funeral goods & services contract with a funeral
home. The policy's death benefit is initially based on the total funeral cost at
the time of prearrangement, and it then typically grows as interest is credited.
In exchange for the policy owner's designation of the funeral home as the
primary beneficiary, the funeral home will typically guarantee that the death
benefit proceeds will cover the future cost of the selected goods & services no
matter when death occurs. Excess proceeds may go to either the insured's
estate, a designated beneficiary, or to the funeral home, as set forth in the
prearrangement funeral contract. Purchasers of these policies usually make a
single premium payment equal to the funeral amount at the time of
prearrangement, but companies offering these products also allow premiums
to be paid over as much as ten years.
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6.UNI T LI NKED I NSURANCE PLANS

These are unique insurance plans which are basically a mutual fund and term insurance plan
rolled into one. The investor doesn't participate in the profits of the plan per se, but gets
returns based on the returns on the funds he or she had chosen.
The premium paid by the customer is deducted by initial charges by the insurance companies
(basically the distribution and initial costs) and the remaining amount is invested in a fund
(much like a mutual fund) by converting the amount into units based upon the NAV of the
fund on that date.
Mortality charges, fund management charges, and a few other charges are deducted in regular
intervals by way of cancellation of units from the invested funds.
A Unit Linked Insurance Plan (ULIP) offers high flexibility to the customer in form of higher
liquidity and lower term.
The customer has the choice of choosing the funds of his choice from whatever his/her
insurance provider has to offer. He can switch between the funds without the necessity to opt
out of the insurance plan.
ULIPs got extremely popular in the heyday of the equity bull run in India, as the returns
generated in equity linked funds were beating any kind of debt or fixed return instrument.
However, with the stagnation of the economy and the equity market this product category
slowed down.


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With-profits policies: Some policies afford the policyholder a share of the profits of the
insurance company these are termed with-profits policies. Other policies provide no rights
to a share of the profits of the company these are non-profit policies.
With-profits policies are used as a form of collective investment scheme to achieve capital
growth. Other policies offer a guaranteed return not dependent on the company's underlying
investment performance; these are often referred to as without-profit policies, which may be
construed as a misnomer.



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7.ANNUI TI ES & TAXATI ON

ANNUITIES: An annuity is a contract with an insurance company whereby the
insured pays an initial premium or premiums into a tax-deferred account, which pays
out a sum at pre-determined intervals. There are two periods: the accumulation (when
payments are paid into the account) and the annuitization (when the insurance
company pays out). IRS rules restrict how money can be withdrawn from an annuity.
Distributions may be taxable and/or penalized.



TAXATION - INDIA: Premiums paid by the policy owner are deductible from the
taxable income of the policy owner under section 80 (C) up to a maximum limit of
Rs.1,00,000. Any proceeds from an Insurance Plan in form of maturity proceeds,
claims, partial withdrawal is exempt from taxation under section 10 (10) D of Income
Tax law of India.



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8.STRANGER ORI GI NATED POLI CY LI FE I NSURANCE

Stranger originated life insurance or STOLI is a life insurance policy that is held or financed
by a person who has no relationship to the insured person. Generally, the purpose of life
insurance is to provide peace of mind by assuring that financial loss or hardship will be
alleviated in the event of the insured person's death. STOLI has often been used as an
investment technique whereby investors will encourage someone (usually an elderly person)
to purchase life insurance and name the investors as the beneficiary of the policy. This
undermines the primary purpose of life insurance, as the investors would incur no financial
loss should the insured person die. In some jurisdictions, there are laws to discourage or
prevent STOLI.








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9.HDFC STANDARD LI FE I NSURANCE COMPANY LTD

ABOUT HDFC STANDARD LIFE INSURANCE
HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance
companies, which offers a range of individual and group insurance solutions. It is a joint
venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's
leading housing finance institution and a Group Company of the Standard Life, UK. HDFC
as on December 31, 2007 holds 72.38 per cent of equity in the joint venture.
HDFC STANDARD LIFE INSURANCE PARENTAGE
HDFC is India leading housing finance institution and has helped build more than
23,00,000 houses since its incorporation in 1977.
In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr.
As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor
base now stands at around 1 million depositors.
Rated AAA by CRISIL and ICRA for the 10th consecutive year
Stable and experienced management
High service standards
Awarded The Economic Times Corporate Citizen of the year Award long-standing
commitment to community development.
Presented the Dream Home award for the best housing finance provider in 2004 at
the third Annual Outlook Money Awards.



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Standard Life Group (Standard Life plc and its subsidiaries)
Standard Life Group (Standard Life plc and its subsidiaries).
The Standard Life group has been looking after the financial needs of customers for
over 180 years.
It currently has a customer base of around 7 million people who rely on the company
for their insurance, pension, investment, banking and health-care needs.
Its investment manager currently administers 125 billion in assets.
It is a leading pensions provider in the UK, and is rated by Standard & Poor's as
'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's.
Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the
Money Marketing Awards, and it was voted a 5 star life and pensions provider at
the Financial Adviser Service Awards for the last 10 years running. The '5 Star'
accolade has also been awarded to Standard Life Investments for the last 10 years,
and to Standard Life Bank since its inception in 1998. Standard Life Bank was
awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in
2006.



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HI STORY HDFC LI FE

HDFC Standard Life Insurance Co. Ltd was incorporated on 14th august 2000. It is a joint
venture between Housing Development Finance Corporation Limited (HDFC Ltd.) India and
UK based Standard Life Company. Both the joint venture partners being one of the leaders in
their respective areas came together in this 81.4:18.6 joint Venture to form HDFC standard
life insurance company limited.
The MD and CEO of HDFC Standard Life Mr. Deepak S. Parekh , has given the company
new directions and has helped the company achieve the status it currently enjoys. HDFC
Standard Life brings to you a whole range of insurance solutions be it group or individual or
NAV services for corporations, they can be easily customized as per specific needs.
HDFC Standard Life Insurance India boasts of covering around 8.7 lakh lives by March'2007.
The gross incomes standing at a whopping Rs. 2, 856 crores, HDFC Standard Life Insurance
Corporation is sure to become one of the leaders and the first Preference for any life
insurance customer.
The Bancassurance partners of HDFC Standard Life Insurance Co Ltd are HDFC, HDFC
Bank India Limited, Union Bank of India, Indian Bank, Bank of Baroda, Sarawat Bank and
Bajaj Capital.
The premium payment options available to the customers vary from online payment to direct
desk payments at the HDFC Standard Life Branches, by courier services or in drop boxes
provided. You can also pay by ECS or Automatic Debit System or credit cards or standing
instruction mandate. HDFC Standard Life Insurance Company is a customer oriented
corporation and aim at complete customer satisfaction.
The lapsation and renewal policy of HDFC Standard Life are clearly defined on the official
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website. Online renewal forms are also available. For any change in personal details like the
contact details or the nominee of the policy or policy benefits, online servicing is also
available. Even the claim procedure has been simplified since affect of the loss life is
irreparable and is thus fully understandable at HDFC Standard Life. A completely hassle-free
process has been formulated to provide maximum convenience.
HDFC Standard Life first came together for a possible joint venture, to enter the Life
Insurance market, in January 1995. It was clear from the outset that both companies shared
similar values and beliefs and a strong relationship quickly formed. In October 1995 the
companies signed a 3 year joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the
relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing
delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in
parliament. Despite this both companies remained firmly committed to the venture.
In October 1998, the joint venture agreement was renewed and additional resource made
available. Around this time Standard Life purchased 2% of Infrastructure Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC
Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level. Therefore, in
January 2000 an expert team from the UK joined a hand picked team from HDFC to form the
core project team, based in Mumbai.
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Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in
HDFC Bank.
In a further development Standard Life agreed to participate in the Asset Management
Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was
Launched on 20th july 2000.
Incorporation of HDFC Standard Life Insurance Company Limited: The company was
incorporated on 14th August 2000 under the name of HDFC Standard life insurance company
limited.
Their ambition from the beginning was to be the first private company to re-enter the life
insurance market in India. On the 23rd of October 2000, this ambition was realised when
HDFC Standard Life was the first life company to be granted a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life
owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the
maximum investment allowed under current regulations.
HDFC and Standard Life have a long and close relationship built upon shared values and
trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies
and be the yardstick by which all other insurance companies in India are measured.
HDFC Standard Life Insurance Company Limited is one of India's leading private life
insurance companies offering a range of individual and group insurance solutions. It is a joint
venture between Housing Development Finance Corporation Limited (HDFC Ltd), India's
leading housing finance institution and Standard Life plc, the leading providers of financial
services in the United Kingdom.
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HDFC Ltd. as on December 31, 2007 holds 72.38 per cent of equity in the joint venture.
HDFC Standard Life's Product portfolio comprises solutions, which meet various customer
needs such as Protection, Pension, Savings, and Investment.
Customers have the added advantage of customizing the Plans, by adding optional benefits
called riders, at a nominal price. The company currently has 21 retail and 6 group products in
its portfolio.
HDFC Standard Life maintains very high professional standards during product offerings by
providing sound financial advice, efficient post-sale service, and immaculate financial
security. Ongoing training for conventional products, and specialized training, for unit-linked
products, for its financial consultants, has also helped its customers choose the product, best
suited for their needs.
HDFC Standard Life operates across more than 726 cities and towns of the country supported
by its strong network of more than 1,45,000 Financial Consultants. HDFC Standard Life also
has more than 383 corporate agents and other sales intermediaries including banks for
distribution of insurance products.

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AWARDS & ACCOLADES
In 2012

Best Prax Benchmark 2012 Award



Best Product Innovation Award at Indian Insurance Award 2012


HDFC Life has won the BestPrax Benchmark
Award 2012 for Leadership Governance in the
Service category at the recently held BestPrax
Conclave.
This award recognizes our efforts inbuilding
world class practices at HDFC Life. This is
an ongoing journey at creating a culture of
excellence .
Received the Best Product Innovation Award
for its Product SAMPOORN SAMRIDDHI
The company has received Award for the
second consecutive year. This award seeks to
honour a life insurer that has launched an
innovation product that has set the benchmark
in terms of fulfilling an un-met customer need
in domain.
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Celent Model Insurer Global Award



5th Loyalty Awards 2012 - Insurance Sector (Life)













HDFC Life has been selected, among the 23
Insurance Companies Worldwide, as a
Model Insurer 2012, for the use of
Enterprise Wide Learning via the Internet by
Celent USA. HDFC Life has also won the
Celent Model Insurer Asia 2012 award.
Declared as the winner for Customer & Brand
Loyalty in 'Insurance Sector - Life. These
awards recognize Customer loyalty efforts of
Companies across various sectors. The Theme
of this year's Summit was 'Driving Loyalty
through Customer Experience Management.
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Century International Quality ERA AwarD






My FM Star of the Industry Awards Excellence in Life Insurance









Received the award in Gold Category. Century
International Quality ERA is based on
Excellence in Leadership and Business
Management, Quality and Excellence, Business
and Brand name Prestige, and Technology,
Innovation and Expansion.
HDFC Life won the Silver award for Excellence
in Life Insurance.The Stars of the Industry Awards
recognises individual and corporate excellence
across the banking and financial services sector.
These Awards were decided by an eminent Jury
comprising senior professionals. The Awards were
given away in 17 categories.
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10.DI FFERENT I NSURANCE COMPANI ES


Insurance is an upcoming sector, in India the year 2000 was a landmark year for life
insurance industry, in this year the life insurance industry was liberalized after more than fifty
years. Insurance sector was once a monopoly, with LIC as the only company, a public sector
enterprise. But nowadays the market opened up and there are many private players competing
in the market. There are fifteen private life insurance companies has entered the industry.
After the entry of these private players, the market share of LIC has been considerably
reduced. In the last five years the private players is able to expand the market (growing at
30% per annum) and also has improved their market share to 18%.For the past five years
private players have launched many innovations in the industry in terms of products, market
channels and advertisement of products, agent training and customer services etc. The various
life insurers entered India:-

1. Bajaj Allianz Life Insurance Company Limited

2. Birla Sun Life Insurance Co. Ltd

3. HDFC Standard life Insurance Co. Ltd

4. ICICI Prudential Life Insurance Co. Ltd.

5. ING Vysya Life Insurance Company Ltd.

6. Max New York Life Insurance Co. Ltd
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7. Met Life India Insurance Company Ltd.

8. Kotak Mahindra Old Mutual Life Insurance Limited

9. SBI Life Insurance Co. Ltd

10. Tata AIG Life Insurance Company Limited

11. Reliance Life Insurance Company Limited.

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

13. Sahara India Life Insurance Co, Ltd.

14. Shriram Life Insurance Co, Ltd.

15. Bharti AXA Life Insurance Company Ltd.

16. Future General Life Insurance Company Ltd.

17. IDBI Fortis Life Insurance Company Ltd.

18. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

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Top companies in insurance sector

LIC: LIC has the strongest market base in comparison with all the life insurance companies
in India, with a total share of about 70% of market share. It is still the leader in life insurance
market extending its services to more than 200 million people in India.

Birla Sun Life: Birla Sun Life Insurance today holds the highest market share in private life
insurance companies in India. Its market share is 8% with various life insurance policies to
support.

Bajaj Allianz: Bajaj Allianz is the second life insurance company to capture a market share
of about 6.8%. The company provides various life insurance policies such as term life, whole
life, ULIPs, Pension plans, children plans, etc.

ICICI Prudential Life: ICICI Prudential Life is one of the top private life insurance
companies in India with a market share of 5.9% offering various life insurance policies.


HDFC Standard Life: HDFC Standard Life is yet another private life insurance company in
India. Its current market share is 3.65% of the whole life insurance market in India.


Tata AIG Life: Tata AIG Life is also one of the private life insurance companies in India. Its
market share is 2.1% of Indian life insurance market.

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Market share of different companies





S.NO COMPANY NAME PERCENTAGE
1 LIC 70%
2 BIRLA SUN LIFE 8%
3 BAJAJA ALLIANZ 6.80%
4 ICICI PRUDENTIAL
LIFE
5.90%
5 HDFC STANDARD
LIFE
3.65%
6 TATA AIG 2.10%
7 OTHERS 3.55%


70%
8%
6.80%
5.90%
3.65%
2.10% 3.55%
LIC
Birla Sun Life
Bajaj Allianz
ICICI Prudential Life
HDFC Standard Life
TATA AIG
Others
Market Share of
Different Companies
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11.ADVANTAGES

ADVANTAGES:

Protection against risk of untimely death

Life insurance is a product, which offers protection against the risk of death the full sum
assured is made available under a life assurance policy, whereas under other savings
schemes, the total accumulated savings alone will be available.


Educational requirements and charity

The object of insurance may be to serve as a security to educational funds in respect of loans
advanced for educational purpose or to provide donations to charitable institutions like
hospital and school.

Nomination and assignment

The life insured can name the person or persons to whom the policy money would be payable
in the event of his death .the proceeds of a life insurance policy can be protected against the
claims of the creditors of the life insured by effecting a valid assignment of the policy. The
beneficiaries are fully protected from creditors expect to the extent of any interest in the
policy retained by the insured.


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Loans from the insurance company

A policy holder can take a loan from his insurance company against the Security of his life
insurance policy provided the terms of the terms of his policy allow such a loan. This loan
can be taken usually after a period of 3 years from Commencement of the policy and is a
percentage of its surrender value.

Investment options

The unit link products gives comprehensive insurance solutions that cater to an Individuals
dual need of earning potentially high returns as well as stay for life. Thus, there is an option
to invest money in the products that combine the best of insurance and investment. In a
volatile market conditions it is possible to secure both as one can hedge the investment with
saver investment vehicles that provide a diversified portfolio.

Tax benefits

The Indian income tax act provides tax concessions to the policyholder both on payment of
premium and on the maturity amount. Under sec 88 the tax benefits on premium paid by an
individual for life insurance policies on his own life\on the life of spouse \children minor or
major, including married daughters. Under sec 6 of the married womens property act if a
married man takes a policy of life insurance on his own life and expenses on the face of it to
be for the benefit of his wife or of his wife and children or any of them, then it shall be
deemed to be a trust for the benefit of his wife and children or any of them.

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12.LI MI TATI ONS

LIMITATIONS:

1. Useful Financial insights are not easily available.

2. Due to time constraint sufficient research on all the investment tools is difficult.
3. The survey sample is not very large for analysis

4. Properly convincing people to invest in insurance products is
challenging.

5. Due to recession there is liquidity crunch in the market.

6. There might have been tendencies among the respondents to amplify or filter their
responses under the testing conditions.

7. The research is confined to Varanasi and does not necessarily shows a pattern
applicable to other parts of the country.



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13.Suggestions and recommendation


People are not aware of the life insurance. Most of them know only one company which
provides life insurance i.e. LIC. So awareness campaign should be run so that people are
aware of different life insurance companies in India.

People should be educated about the different types of products or plans offered by the life
insurance companies. Most of them dont know much of the different types of plan or
products.

It was felt that most of the people took life for tax savings or just to cover up their life, not
as an investment avenue. Life Insurance companies need to advertise in such a manner that
people start investing in life insurance like the way they invest in the stock market.

Now at the time of global turmoil insurance company had to hold on to the policyholders
trust which might lead the company to the path of success.

Insurance companies should try to adopt different strategies to market their products or
plan. Companies should not primarily focus on the agents for their business.



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14.CRI TCI SM
Although some aspects of the application process (such as underwriting and insurable interest
provisions) make it difficult, life insurance policies have been used to facilitate exploitation
and fraud. In the case of life insurance, there is a possible motive to purchase a life insurance
policy, particularly if the face value is substantial, and then murder the insured. Usually, the
larger the claim, and the more serious the incident, the larger and more intense the ensuing
investigation, consisting of police and insurer investigators.
The television series Forensic Files has included episodes that feature this scenario. There
was also a documented case in 2006, where two elderly women were accused of taking in
homeless men and assisting them. As part of their assistance, they took out life insurance for
the men. After the contestability period ended on the policies, the women are alleged to have
had the men killed via hit-and-run car crashes.
Recently, viatical settlements have created problems for life insurance providers. A viatical
settlement involves the purchase of a life insurance policy from an elderly or terminally ill
policy holder. The policy holder sells the policy (including the right to name the beneficiary)
to a purchaser for a price discounted from the policy value. The seller has cash in hand, and
the purchaser will realize a profit when the seller dies and the proceeds are delivered to the
purchaser. In the meantime, the purchaser continues to pay the premiums. Although both
parties have reached an agreeable settlement, insurers are troubled by this trend. Insurers
calculate their rates with the assumption that a certain portion of policy holders will seek to
redeem the cash value of their insurance policies before death. They also expect that a certain
portion will stop paying premiums and forfeit their policies. However, viatical settlements
ensure that such policies will with absolute certainty be paid out. Some purchasers, in order
to take advantage of the potentially large profits, have even actively sought to collude with
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uninsured elderly and terminally ill patients, and created policies that would have not
otherwise been purchased. These policies are guaranteed losses from the insurers'
perspective.


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15.Conclusion

Insurance is one sector that witnessed continuous growth owing to the reforms in 2000. The
insurance sector is likely to attain a size of Rs. 2,00,000 crore ($ 51.2 billion) in 2009-10. In
life insurance, the business grew by 23.3% to Rs. 93,000 crore in 2007-08
(Source:Assocham). The sector alone employs close to 30 lakh people (including agents and
direct employees).A well-functioning insurance market plays an important role in economic
development and financial stability of developing economies such as Indias. First, it
inculcates and encourages the habit of saving. Second, it provides a safety net to rural and
urban enterprise and productive individuals.
The life insurance market in India is on a growth path. In spite of this, the country lags far
behind the others in awareness about life insurance. The challenge is to spread awareness
about life insurance and it true benefits. The industry has to convince people to park their
hard earned money in long-term insurance and not just look at it as a tax saving instrument.


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16.BI BLI OGRAPHY


www.hdfclifeinsurance.com

www.irdaindia.org

www.wikipedia.org

www.selling-well.com

www.insureme.com

www.advisortoday.com

www.unlockthegame.com

www.lic.com