ACKNOWLEDGEMENTS

First and foremost, I praise and thank God Almighty from the depth of my heart, who
has been the source of strength in the completion of this project work.

It is my profound concern to thank the Director, Globsyn Business School Prof.

R.C.Bhattacharya, who paved the path for offering me this opportunity and avenues of
infinite possibilities of knowledge.

I further express my deep sense of gratitude to Prof. Bikramjit Sen, coordinator of

PGDIB, Globsyn Business School for his constant encouragement and valuable help.

I wish to extend my sincere and profound thanks to Prof. Amit Dey, Avik Mukherjee,
Krishnendu Ghosh for the help extend towards me during the period of this Summer Project
work.

I would like to thank my project guide Mr. Saavan Rai Khuller (Managing Partner,
Kolkata2) and Mrs. Aradhana Guha Biswas (Partner, Kolkata2) who were highly
instrumental in giving me an in-sight of the Insurance Industry. It was their support and
motivation that made me succeed in my project.

I am also thankful to the librarian, Globsyn Business School for the encouragement
and valuable help.

I extend my thanks to the complete team of sales managers at Kolkata 2 Office

especially Mr. Sourav Mitra, who has helped me in each and every way to execute my ideas
during the entire internship period.

I am also thankful to my parents and friends for their encouragement and support.
Finally I would like to express my sincere gratitude to all those who spent their valuable time
for providing necessary data for this organizational study.

Amit Maity
 DECLARATION

I hereby declare that this Summer Project Report titled “Expansion of the distribution
channel” submitted by me to Department of Management, Globsyn Business School in
partial fulfillment of requirements of “Post Graduate Diploma in International Business”
programme is a bonafide work carried out by me under the guidance of Savaan Rai Khuller,
Managing Partner, Max New York Life. This has not been submitted earlier to any other
University or Institution for the award of any degree/diploma certificate or published any
time before.

Place: KOLKATA
Date: AMIT MAITY
 CERTIFICATE

This is to certify that this Summer Project Report entitled “Expansion of the distribution
channel” Submitted in partial fulfillment for the award of “Post Graduate Diploma in
International Business” of Globsyn Business School was carried out by Amit Maity under
the guidance of Saavan Rai Khuller, Managing Partner, Max New York Life. This has not
been submitted to any other University or institution for the award of any degree/diploma
certificate.

Place: Kolkata Project Guide

Date:
 EXECUTIVE SUMMARY

The insurance penetration in India is considered to be one of the lowest in

the world. According to 2004 figures, the per capita insurance premium in India was
only $10 while it was $4800 in Japan, $1000 in Republic of Korea, $887 in
Singapore, $823 in Hong Kong and $144 in Malaysia. India's share in total
insurance premiums worldwide was only 0.4%, though it was second most populous
country in the world. In the same year, Japan's share was 31%; the European Union
25% of the world total, South Africa 2.3%, and Canada 1.7%. These figures
indicated a huge untapped potential in the Indian insurance market.

Until recently, India continued to be one of the few remaining countries of

the world to remain insulated from the direct foreign investment in its insurance
sector. However, things are changing now with the passage of Insurance
Regulatory Development Act (IRDA) through Indian Parliament in late 1999. A much
awaited and much debated act, it met with strong resistance from the political
institutions of India and took almost six years to see daylight. Though first
recommended by Malhotra Committee on Insurance Reforms in 1994, what emerges is
a diluted form of the original recommendations.

So it is necessary to analyze consumer's perception towards Insurance

Companies because there is a huge change in the perception level of consumer perception
Before 7 years people's attitude towards Insurance Companies was very vague they never
showed an interest in taking insurance policies. But today the sky is changed the
foreign multi nationals are coming to India to set up their business. Most of them are
already started their operations in India but Indian Insurance market still remains an
untapped.
Table of Contents

INTRODUCTION Page
I. Introduction
1.1 What is insurance ………………………………………………………7
1.2 Definition of Insurance ………………………………………………. 7
1.3 Types of Insurance ……………………………………………………. 8
1.4 The importance of insurance …………………………………………. 9
1.5 The insurance Industry today ………………………………………... 10
1.6 Evolution of Insurance in India ……………………………………….10
1.7 Evolution of Insurance Organisation ……………………………….. 12
1.8 Insurance Sector Reforms ……………………………………………. 14
1.9 Life Insurance …………………………………………………………. 15

REVIEW
II. About the Company
2.1 Max India Limited …………………………………………………….. 19
2.2 New York Life Insurance Company …………………………………. 20
2.3 MDRT ……………………………………………………………………21
2.4 Products at Max New York Life …………………………………….. 22
2.5 Corporate Social Responsibility …………………………………….. 23

DESIGN
III. Expansion of the distribution Channel
3.0 Recruitment of agent ……….…………………………………………. 25
3.1 Objective ……………………………………………………………….. 25
3.2 Procedure ………………………………………………………………. 25
3.3 Methodology …………………………………………………………… 32

IV. Guide to Tax Planning

4.1 What 80C offers ……………………………………………………….. 35
4.2 Tax Liability …………………………………………………………… 35
4.3 Tax Slabs ………………………………………………………………. 36
4.4 Tax Free Incomes ……………………………………………………… 36
4.5 Gift Tax ………………………………………………………………… 37
4.6 Insurance – the smart way of Tax Plannings ………………….…… 38
4.7 Mediclaim ……………………………………………………………… 39
4.8 Max New York Life and Tax Benefits ……………………………… 40

SUMMARY & CONCLUSIONS

V. Summary and Conclusions
5.1 Results Achieved ………………..……………………………………. 43
5.2 Recommendations …………………………………………………….. 43
5.3 Results Obtained ………………………………………………………. 44

List of Figures
List of Tables
Appendix

5
INTRODUCTION

6
I. INTRODUCTION

Everyone is exposed to various risks. Future is very uncertain, but there is

way to protect one's family and make one's children's future safe. Life Insurance
companies help us to ensure that our family's future is not just secure but also
prosperous.

Life Insurance is particularly important if you are the sole breadwinner for
your family. The loss of you and your income could devastate your family. Life
insurance will ensure that if anything happens to you, your loved ones will be able to
manage financially.

Insurance is a tool by which fatalities of a small number are compensated out

of funds (premium payment) collected from plenteous. Insurance companies pay back
for financial losses arising out of occurrence of insured events e.g. in personal
accident policy death due to accident, in fire policy the insured events are fire and
other allied perils like riot and strike, explosion etc. hence insurance safeguard
against uncertainties. It provides financial recompense for losses suffered due to
incident of unanticipated events, insured with in policy of insurance. Moreover,
through a number of acts of parliament, specific types of insurance are legally
enforced in our country e.g. third party insurance under motor vehicles Act, public
liability insurance for handlers of hazardous substances under environment protection
Act. Etc

1.1 WHAT IS INSURANCE

It is a commonly acknowledged phenomenon that there are countless risks

in every sphere of life; for property, there are fire risk; for shipment of goods. There
are perils of sea; for human life there are risk of death or disability; and so on. The
chances of occurrences of the events causing losses are quite uncertain because these
may or may not take place. Therefore, with this view in mind, people facing
common risks come together and make their small contribution to the common
fund. While it may not be possible to tell in advance, which person will suffer the
losses, it is possible to work out how many persons on an average out of the group,
may suffer losses. When risk occurs, the loss is made good out of the common fund. In
this way each and every one shares the risk. Infact they share the loss by payment of
premium, which is calculated on the likelihood of loss in olden time, the
contribution make the above-stated notion of insurance

7
1.2 DEFINITION OF INSURANCE

Insurance has been defined to be that in, which a sum of money as a premium
is paid by the insured in consideration of the insurer's bearings the risk of paying a
large sum upon a given contingency. The insurance thus is a contract whereby:

a. Certain sum, termed as premium, is charged in consideration,

b. Against the said consideration, a large amount is guaranteed to be paid
by the insurer who received the premium,
c. The compensation will be made in certain definite sum, i.e., the loss or the
policy amount which ever may be, and
d. The payment is made only upon a contingency

More specifically, insurance may be defined as a contract between two

parties, wherein one party (the insurer) agrees to pay to the other party (the insured) or
the beneficiary, a certain sum upon a given contingency (the risk) against which
insurance is required.

1.3 TYPES OF INSURANCE

Insurance occupies an important place in the modern world because of the

risk, which can be insured, in number and extent owing to the growing complexity of
present day economic system. The different type of insurance have come about by
practice within insurance companies, and by the influence of legislation controlling
the transacting of insurance business, broadly, insurance may be classified into the
following categories:

1. Classification from business point of view

a) Life insurance, and
b) General insurance
2. Classification on the basis of nature of insurance

a) Life insurance
b) Fire insurance
c) Marine insurance
d) Social insurance, and
e) Miscellaneous insurance

8
 3. Classification from risk point of view
a) Personal insurance
b) Property insurance
c) Liability insurance
d) Fidelity general insurance

1.4 THE IMPORTANCE OF INSURANCE

Insurance benefits society by allowing individuals to share the risks faced by

many people. But it also serves many other important economic and societal functions.
Because insurance is available and affordable, banks can make loans with the
assurance that the loan's collateral (property that can be taken as payment if a loan goes
unpaid) is covered against damage. This increased availability of credit helps people
buy homes and cars. Insurance also provides the capital that communities need to
quickly rebuild and recover economically from natural disasters, such as tornadoes or
hurricanes.

Insurance itself has become a significant economic force in most

industrialized countries. Employers buy insurance to cover their employees
against work-related injuries and health problems. Businesses also insure their
property, including technology used in production, against damage and theft. Because it
makes business operations safer, insurance encourages businesses to make economic
transactions, which benefits the economies of countries. In addition, millions of people
work for insurance companies and related businesses. In 1996 more than 2.4 million
people worked in the insurance industry in the United States and Canada. Insurance
as an investment that offers a lot more in terms of returns, risk cover & as also that tax
concessions & added bonuses

Not all effects of insurance are positive ones. The possibility of earning
insurance payments motivates some people to attempt to cause damage or losses.
Without the possibility of collecting insurance benefits, for instance, no one would
think of arson, the willful destruction of property by fire, as a potential source of
money.

9
1.5 THE INSURANCE INDUSTRY TODAY

Since the 1970s, the insurance business has grown dramatically and undergone
tremendous changes. As a result of the deregulation of financial services businesses—
including insurance, banking, and securities trading—the roles, products, and services
of these formerly distinct businesses have become blurred. For instance, citizens in the
U.S. state of California voted in 1988 to allow banks to sell insurance in that state. In
Canada, banks may also soon be allowed to sell insurance.

Advances in communications technology have also allowed traditionally

distinct financial businesses to keep instantaneous track of developments in other
businesses and compete for some of the same customers. Some insurance companies now
offer deposit accounts and mortgages. In the United States, life insurance companies
now sell more pension plans and other asset management services than they do
conventional life insurance.

Developments in computer technology that have given insurance providers the

ability to quickly access and process information have allowed them to custom-design
policies to fit the needs of individual customers. But the increasing complexity of
policies has also made some aspects of buying and selling insurance more difficult.

In addition, improvements in geological and meteorological technology have the

potential to change the way property insurers calculate risks of damage. For example, as
scientists improve their abilities to predict severe weather patterns, such as
hurricanes, and geological disturbances, such as earthquakes, insurers may change how
they provide protection against losses from such events

1.6 EVOLUTION OF INSURANCE IN INDIA

The marine insurance is the oldest form of insurance. If we trace Indian history
there are evidence that marine insurance was practiced here about three thousand years
ago. The code of Manu indicates that there was the practice of marine insurance
carried out by the traders in India with those of Srilanka, Egypt and Greece .it is
wonderful to see that Indians had even anticipated the doctrine of average and
contribution. Fright was fixed according to season and was then very much at the
mercy of the wind and other elements. Travelers by sea and land were very much
exposed to the risk of losing their vessels and merchandise because of piracy on
open seas and highway robbery of caravans was very common. The practice of
insurance was very common during the rule of Akbar to Aurangzeb, but the nature and
coverage of the insurance in this period is not well known. It was the British insurer
who introduced general insurance in India in the modern form. The Britishers opened
general insurance in India around the year 1700 .the first company known as the sun
insurance office was set up in Calcutta in the year 1710. This was followed by several
insurance companies like London assurance and royal exchange assurance (1720),
Phoenix Assurance Company (1782). Etc. General insurance business in the country
was nationalized with effect from 1st January 1973 by the General Insurance
Business (Nationalization) Act, 1972. More than 100 non-life insurance
companies including branches of foreign companies operating within the country

10
were 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. with head offices at
Calcutta, Bombay, New Delhi and Madras, respectively.
Life insurance in the current form came in India from united kingdom
with the establishment of a British firm, oriental life assurance company in 1818
followed by Bombay life assurance company in 1823, the madras equitable life
insurance society in 1829 and oriental life assurance company in 1874.prior to
1871, Indian lives were treated as sub standard and charged an extra premium of
15% to 20%. Bombay mutual life assurance society, an Indian insurer that came in to
existence in 1871, was the first to cover Indian lives at normal rates. The Indian
insurance company Act 1923 was enacted inter alia, to enable the government to
collect statistical information about life and nonlife insurance business transacted in
India by Indian and foreign insurer, including the provident insurance societies.
The first half of the 20 t h century marked by two world war, the adverse
affects of the World War I and World War II on the economy of India, and in between
them the period of world wide economic crises triggered by the Great depression. The
first half of the 20th century was also marked by struggles for India's independence.
The aggregate effect of these events led to a high rate of bankruptcies and liquidation of
life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover

In this background, the Parliament of India passed the Life Insurance of India
Act on 19th June 1956, and the Life Insurance Corporation of India was created
on 1st September, 1956, by consolidating the life insurance business of 245 private
life insurers and other entities offering life insurance services.

Since 1972, the insurance sector has been totally under the control of
government of India through LIC and GIC and its subsidiaries. As a result, revenue
of both of them increased in the last years .the amount of savings pooled by LIC
increased from Rs.2704 crores in 1974 to Rs .57670 in 1994 with an annual growth rate
of 16.53% .similarly premium underwritten by GIC rose from 280 crores in 193 to
7647 crores in 1998 showing an annual growth rate of 25.18%.

Despite increase in premium collected by both LIC and GIC their were
inefficiency and red tapeisum creeped in to the insurance sector. Apart from that a
major policy shift by the Narasimha Rau government during 1990' s.the Indian economy
opened for foreign competition .In this background The government of India in 1993
had set-up a high powered committee by R.N Malhothra ,former governor reserve
bank of India, to examine the structure of Indian insurance sector and recommended
changes to make it more efficient and competitive keeping in view structural changes
in other part of the financial system of the country.

Insurance sector has been opened up for competition from Indian private
insurance companies with the enactment of Insurance Regulatory and Development
Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999,
Insurance Regulatory and Development Authority (IRDA) was established on
19th April 2000 to protect the interests of holder of insurance policy and to
regulate, promote and ensure orderly growth of the insurance industry. IRDA Act
1999 paved the way for the entry of private players into the insurance market, which

11
was hitherto the exclusive privilege of public sector insurance companies/
corporations.

1.7 EVOLUTION OF INSURANCE ORGANIZATION

With a view to serve the society, the insurance organizations have been
developed in different forms with innovation of insurance practice for social
welfare and development; some of these forms are outlined here.

a) Self-insurance

The arrangement in which an individual or concern sets up a private fund to

meet the future risk. If some losses happened in the future the firm meets the loss out
of the fund. While it may be called 'self insurance' it is not a single matter of fact,
insurance at all because there is no hedge, no shifting, or distributing the burden of risk
among larger Persons. It is merely a provision to meeting the unforeseen event.
Here the insured become the insurer for the particular risk. But it can be effectively
worked only when there is wide distribution of risks subjected the same hazard.

a) Partnership

A partnership firm may also carry on the insurance business for the sake of
profit. Since it is not an entity distinct from the persons comprising it, the personal
liability of partners in respect to the partnership debts is unlimited. In case of huge loss
the partners may have to pay from their own personal funds and it will not be profitable
to them to starts insurance business .in the early period before the advent of joint stock
companies many insurance undertakings were partnership firms or unincorporated
companies

b) Joint stock companies

The joint stock companies are those, which are organized by the shareholders
who subscribe the necessary capital to start the business. These are formed for earning
profits for the stockholders who are the real owners of the companies. The
management of a company is entrusted to a board of directors who is elected by the
shareholders from amongst themselves. The company can operate insurance
business and policyholders have nothing to do with the management of the concern.
But in life insurance it is the practice to share certain portion of profit among the
certain policyholders.

d) Mutual fund companies

12
 The mutual fund companies are co- operative association formed for the
purpose of effecting insurance on the property of its members. The policyholders are
themselves the shareholders of the companies each member is insured as well as
insured. They have power to participate in management and in the profit sharing to the
full extent. Whenever the income is more than the expenses and claims, it is
accumulated I the form of saving and is entitled in reducing the rate of premium.
Since the insured are insurers also, they always try to reduce the management
expenses and to keep the business at sound level.

e) Co-operative insurance organizations

Cooperative insurance organizations are those concerns, which are

incorporated and registered under Indian cooperative societies Act. The concerns are
also called 'co operative insurance societies' these societies like mutual fund
companies are non profit organization .the aim is to provide insurance protection to its
members at the lowest reasonable net cost .the Indian insurance Act. 1938, has
provided special provisions for the co-operative insurance societies, but after
nationalization the societies have ceased to exist.

f) Lloyd's Association

Lloyd's association is one of the greatest insurance institutions in the

world. Taking its name from the coffee house Lloyd where underwriters assembled to
transact business and pick-up news. The organization traces its origins to the latter
part of the seventeenth century .so it is the oldest insurance organization in existing
form in the world. In 1871,Lloyds Act was passed incorporating the members of the
association into a single corporate body with perpetual succession and a corporate
seal .the powers of Lloyds corporation were extended from the business of marine
insurance to the other insurance and guarantee business. The Lloyds Association also
publishes, Lloyds list and register of shipping for the information of insuring public
and the insurers

g) State Insurance

The government of a nation, some times, owns the insurance and runs the
business for the benefit of the public. The sate insurance is defined as that insurance
which is under public sector. In Brazil, Japan and Mexico, the insurance are largely
nationalized. Previously, the state undertook only those insurances, which were
regarded as vital for the national interest.

13
1.8 INSURANCE SECTOR REFORMS

Having looked at the insurance sector, the efforts made by the government to
make the industry more dynamic and customer friendly. To begin with, the Malhotra
committee was set up with the objective of suggesting changes that would achieve the
much required dynamism.

The Malhotra Committee Report

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. In 1994, the committee submitted the report and gave the
following recommendations:

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. 1bn 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.
Controller of Insurance (Currently a part from the Finance Ministry)

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).

14
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.
Computerization of operations and updating of technology to be carried out in the
insurance industry.
Overall, the committee strongly felt that in order to improve the customer services
and increase the coverage of the insurance 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 could ruin the public confidence in the industry

1.9 LIFE INSURANCE

"Life Insurance is a contract for payment of a sum of money to the person assured
on the happening of the event insured against". Usually the insurance contract provides
for the payment of an amount on the date of maturity or at specified dates at periodic
intervals or at unfortunate death if it occurs earlier. Obviously, there is a price to be
paid for this benefit. Among other things the contracts also provides for the payment
of premiums, by the assured.
Life Insurance is universally acknowledged as a tool to eliminate risk,
substitute certainty for uncertainty and ensure timely aid for the family in the
unfortunate event of the death of the breadwinner. In other words, it is the civilized
world's partial solution to the problems caused by death. Life insurance helps in
two ways dealing with premature death, which leaves dependent families to fend for
themselves and old age without visible means of support.
The most common types of life insurance are whole life insurance and
term life insurance. Whole life insurance provides a lifetime of protection as long as
you pay the premiums to keep the policy active. They also accrue a cash value and
thus offer a savings component. Term life insurance provides protection only during
the term of the policy and the policies are usually renewable at the end of the term

15
List of Insurance Companies with their websites

LIFE INSURERS Websites

Public Sector

Life Insurance Corporation of India www.licindia.com

Private Sector

Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in

Birla Sun-Life Insurance Company Limited www.birlasunlife.com
HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com
ING Vysya Life Insurance Company Limited www.ingvysayalife.com
Max New York Life Insurance Co. Limited www.maxnewyorklife.com
MetLife Insurance Company Limted www.metlife.com
Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com
SBI Life Insurance Company Limited www.sbilife.co.in
TATA AIG Life Insurance Company Limited www.tata-aig.com
AMP Sanmar Assurance Company Limited www.ampsanmar.com
Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com

GENERAL INSURERS

Public Sector

National Insurance Company Limited www.nationalinsuranceindia.com

New India Assurance Company Limited www.niacl.com
Oriental Insurance Company Limited www.orientalinsurance.nic.in
United India Insurance Company Limited www.uiic.co.in

Private Sector

Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in

ICICI Lombard General Insurance Co. Ltd www.icicilombard.com
Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
TATA AIG General Insurance Co. Limited www.tata-aig.com
Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com
Export Credit Guarantee Corporation www.ecgcindia.com

REINSURER
General Insurance Corporation of India www.gicindia.com

16
Few Life Insurance policies are:

Whole life policies - Cover the insured for life. The insured does not receive
money while he is alive; the nominee receives the sum assured plus bonus upon
death of the insured.

Endowment policies - Cover the insured for a specific period. The insured receives
money on survival of the term and is not covered thereafter.
Money back policies - The nominee receives money immediately on death of the
insured. On survival the insured receives money at regular intervals during the
term. These policies cost more than endowment with profit policies.

Annuities / Children's policies - The nominee receives a guaranteed amount of

money at a pre-determined time and not immediately on death of the insured. On
survival the insured receives money at the same pre-determined time. These policies
are best suited for planning children's future education and marriage costs.
Pension schemes - are policies that provide benefits to the insured only upon
retirement. If the insured dies during the term of the policy, his nominee would
receive the benefits either as a lump sum or as a pension every month. Since a single
policy cannot meet all the insurance objectives, one should have a portfolio of policies
covering all the needs

17
REVIEW

18
II ABOUT THE COMPANY

Max New York Life Insurance Company Ltd. is a joint venture between New York
Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business
corporations. The company has positioned itself on the quality platform. In line with its
vision to be the most admired life insurance company in India, it has developed a strong
corporate governance model based on the core values of excellence, honesty, knowledge,
caring, integrity and teamwork. The strategy is to establish itself as a trusted life insurance
specialist through a quality approach to business.

2.1 Max India Limited

Founded in 1985, Max India Limited is a Public Limited company listed in the NSE and BSE
of India with over 37,000 shareholders.

Today, Max India Limited is a multi-business corporate, driven by the spirit of Enterprise,
focused on Knowledge, People and Service oriented businesses of:

* Healthcare (Max Healthcare)

* Life Insurance (Max New York Life Insurance)
* Clinical Research (Neeman Medical International)

Max also maintains interests in:

* Specialty Plastic Products for the packaging industry (Max Speciality Products)
* Healthcare Staffing (Max Health Staff)

Prominent shareholders are Mr Analjit Singh and a leading private equity firm, Warburg
Pincus which accounts for 28.7% of the total shareholding. The balance shareholding is held
by the public and Institutional Investors.

In 2000, the Company reinvented and restructured itself to focus on the businesses of ‘Life’
under the theme, Life…Our Focus.

Max New York Life Insurance, founded as a Joint Venture between Max India Limited and
New York Life, a Fortune 100 company, is one of the leading private life insurers in India.

Max Healthcare, a subsidiary of Max India Limited is India’s first provider of

comprehensive, standardized, seamless, and integrated world-class healthcare services.

Neeman Medical International (NMI) is an International Clinical Research provider

operating across three locations spanning North America, Asia and Latin America. Each
location is backed by comprehensive infrastructure and highly skilled and experienced
personnel.

19
 Board of Directors- Max India Limited

Dr Bhai Mohan Singh Lifetime Chairman Emeritus, Max India

Mr Analjit Singh Chairman, Max India
Dr S S Baijal Former Chairman, ICI Ltd.
Mr N C Singhal Former Vice Chairman& MD, SCICI
Mr N Rangachary Former Chairman, IRDA
Mr. Rajesh Khanna Vice President, Warburg Pincus India Pvt. Ltd.
Mr Piyush Mankad Former Secy., Ministry of Finance, Govt. of India
Mr Ashwani Windlass Former Managing Director, Hutchison Max Telecom
Ltd.
Mr Bharat Sahgal Managing Director, Warburg Pincus India Pvt. Ltd.
Mr B Anantharaman Jt. Managing Director, Max India
Mr. Piyush Mankad
Mr. Anuroop Singh

2.2 New York Life Insurance Company

New York Life Insurance Company,(www.newyorklife.com) a Fortune 100 company

founded in 1845, is the largest mutual life insurance company in the United States and one of
the largest life insurers in the world. Headquartered in New York City, New York Life’s
family of companies offer life insurance, annuities and long-term care insurance. New York
Life Investment Management LLC provides institutional asset management and retirement
plan services. Other New York Life affiliates provide an array of securities products and
services, as well as institutional and retail mutual funds. The mission of New York Life is to
maintain its superior 'financial strength', adhere to the highest standards of 'integrity' and
demonstrate 'humanity' by treating its customers, agents and employees with compassion,
consideration and respect. New York Life is one of the largest and strongest life insurance
companies in the world with more than USD$215 billion assets under management and has
received among the highest ratings for financial strength from the life insurance industry's
principal rating agencies: A.M. Best (AA+), Standard & Poor's (AA+), Moody's (Aa1), Fitch
(AAA). According to Moody's, "New York Life's rating reflects the company's good quality
investment portfolio, ample liquidity, and sound capitalization, as well as the good growth
potential of its international business.”
As a leader in the insurance industry, New York Life continues to bring to its
operations new management concepts, advanced technologies, new distribution and training
systems and innovative insurance products.

In line with its values of financial responsibility, Max New York Life has adopted
prudent financial practices to ensure safety of policyholder's funds. The Company's paid up
capital is Rs. 657 crore, which is more than the norm laid down by IRDA.

Max New York Life has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which comprises
four stages - screening, psychometric test, career seminar and final interview. The agent

20
advisors are trained in-house to ensure optimal control on quality of training.

Max New York Life invests significantly in its training program and each agent is
trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before
beginning to sell in the marketplace. Training is a continuous process for agents at Max New
York Life and ensures development of skills and knowledge through a structured program
spread over 500 hours in two years. This focus on continuous quality training has resulted in
the company having amongst the highest agent pass rate in IRDA examinations and the
agents have the highest productivity among private life insurers.

2.3 MDRT

The Million Dollar Round Table, abbreviated MDRT is a trade association formed in
1927 to help insurance salespeople and financial advisors improve their business practices
and increase sales. The name comes from the fact that the founders had each logged sales of
more than $1,000,000 in the year the organization was formed. They focus on improving
technical knowledge and selling ability as well as maintaining ethical standards in an oft-
maligned industry. Their programs and philosophies are one of the early forbears and focus
on personal and professional development of their members, while enforcing a strict code of
ethics.

MDRT promotes the "Whole Person" (formerly "Whole Man") concept, which was
first presented to MDRT by the philosopher Mortimer Adler. According to Adler, "Whole
Persons are engaged in a lifetime quest to achieve balance and congruity in all aspects of
their lives and continually seek to develop their full human potential.” The seven areas
balanced by a "Whole Person" are family, health, education, career, and services financial
and spiritual.

Despite this, the requirements for joining the MDRT are based on an ever-increasing,
annual production requirement and adherence to a strict code of ethics. To be eligible for a
basic membership in 2007, for example, an applicant must meet a production goal of $75,700
in commissions in 2006. To qualify for the highest tier of membership requires the collection
of $454,200 in commissions. As of 2006 the organization has more than 32,000 members in
74 countries and territories.

201 agent advisors have qualified for the Million Dollar Round Table (MDRT)
membership in 2005. MDRT is an exclusive congregation of the world’s top selling
insurance agents and is internationally recognized as the standard of excellence in the life
insurance business.

Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its business.
The company is using a five-pronged strategy to pursue alternative channels of distribution.
These include the franchisee model, rural business, direct sales force involving group
insurance and telemarketing opportunities, banc assurance and corporate alliances.

Max New York Life offers a suite of flexible products. It now has 26 life insurance
products and 8 riders that can be customised to over 400 combinations enabling customers to
choose the policy that best fits their need.

21
2.4 Products at Max New York Life
Individual Insurances

Whole Life Participating / Non-Participating

5 Year Term Renewable and Convertible
Endowment To Age 60 Policy
Easy Life Policy
Life Maker
Life Pay Money Back Plan
20 Year Endowment Participating
Children`s Endowment Policy
Level Term Policy
Stepping Stones
Life Gain Endowment Plan
Life Gain Plus - Ltd Pay Endowment Plan

Group Insurances

Group Credit Life

Employee Deposit Linked Insurance
Group Shield
Group Gratuity
Unit Linked Group Gratuity
Unit Linked Group Super Annuation Plan

Achievements

• Max New York Life is the first life insurance company in India to be awarded the IS0
9001:2000 certifications.

• Max New York Life was among the top 25 companies to work with in India,
according to 2003 Business World magazine, "Great Workplaces In India", Max New York
Life was ranked at the 20th position. This survey is the local version of the "Great Places to
Work" survey carried out every year in 22 countries.

• We were among top five most respected private life insurance companies in India
according to a 2004 Business World survey.

• We have truly built an enviable sales force. With 201 agents becoming members of
the MDRT in 2005, Max New York Life has moved up in the Top 50 MDRT global list.

2.5 Corporate Social Responsibility

22
 The company donates a part of the total money collected on all policies sold, to SOS
Children's Villages of India at the end of the year.

Max New York Life has been instrumental in changing the paradigm of life insurance
in India. It is the first life insurance company in India to introduce cause related marketing.

Children are at the very heart of Max New York Life's strategy. SOS Children's
Villages of India is internationally recognized for its work in giving underprivileged children
a wholesome life. The mission of SOS is "to help orphaned and abandoned children, by
providing them with a family, a permanent home, education and strong foundation for an
independent life." Its mission ties in with Max New York Life's philosophy of helping people
secure the future of their near and dear ones.

MNYL employees at a painting competition at SOS Village

Max New York Life employee visits to SOS Villages are organized regularly to
generate a sense of ownership and involvement among employees.

Shortly after inception, Max New York Life saw Gujarat being devastated by a
ruinous earthquake. The Max India Family and New York Life International contributed
Rs.86.25 lakh towards the permanent care of children affected by the earthquakes in Gujarat.

More recently, in March 2005, New York Life made a donation of Rs. 17 lakh to SOS
Children’s Villages of India for the long-term rehabilitation of survivors of the Tsunami
disaster in Tamil Nadu. The funds will be used by SOS Children’s Villages of India for the
reconstruction of permanent dwellings for fishing communities severely affected by the
Tsunami waves in December 2004. A few weeks earlier, New York Life joined its joint
venture partner Max India in making a donation of Rs. 75 lakh to the Prime Minister’s
National Relief Fund. The Chairman of Max New York Life, Analjit Singh, met Prime
Minister Manmohan Singh to personally hand over the cheque.

23
 DESIGN

III Expansion of the distribution channel

24
3 Recruitment of Agents

3.1 OBJECTIVES

• To perform the job of a sales manager in the company.

• To study in-depth the functioning of the insurance industry.

• To perform segmentation, targeting and positioning of prospective agents in the

industry.

• To understand the work environment of the company.

• To approach and communicate with different people and backgrounds and interact
the ideas and products of the company

• To recruit some people into the training session

3.2 PROCEDURE

Recruitment Process Map

Fig. 3.1

25
Fig 3.2

26
The main function of a sales manager in MNYL is to recruit agent advisors for the company
and produce business through these agents.

The main functions of sales managers at MNYL:

1. Analyze the market for prospective agents

2. Communicate with the prospective agents and set appointments for discussion

3. Make the prospects understand the benefits of being associated with the
organization

4. Conduct the standard agent recruitment procedure for the prospective agents.

5. After the prospective agents become agents, provide them with regular targets and
guidance and obtain productive business for the organization

Standard Agent Recruitment Procedure

1. New names per month

This process of the sales manager involves using personal contacts or performing a
market survey about the availability of prospective agents and setting appointments with
them.
2. Screening of the prospective agent advisor

This is the most important step in the agent recruitment as the person interacts with
the company for the first time. It is the step in which the manager gets to know about the
agent and the agent about the organization. The company follows a very strict procedure for
recruitment of agent advisors and more stress is laid on quality and productivity. Several
details regarding the prospective agents are collected in terms of his/her family, qualification
and financial situation and stress is laid on his communication abilities. A screening form has
been enclosed [1].
The company has a set of rules, which is termed as the Five Point System which the
prospective agent should satisfy, to get selected in the screening.

The rules are as follows:

• The person must be more the 25 years of age

Insurance is a subject matter of solicitation. For acquiring sales and to make

people invest in the company, the customers should be interacting with mature and
sensible agents who have the experience to understand the psychology of their
customers. Another objective stands that at this age the person would have
worked/would be working for an organization and would have obtained a network of
prospective customers.

27
 • The person must be a graduate

It is of course a fact that educated people command more respect from the customers
and understands the needs of the customers. He/She obviously also would have
obtained the right amount of communication skills with the qualification.

• The person must be married

This would help the agent advisor to use the network of not his alone but also of
his/her spouse. More contacts mean more business.

• The person must have lived in Kolkata for more than 5 years

This mandatory requirement enables the candidate to have an unexhausted list of

network and also help him/her reach places where the customers are comfortable.

• Miscellaneous factors

Females are given more preference than males for the job, as they can devote more
time and more dedication can be expected out of them. Another important factor for
evaluation is the communication ability of the person.

The above factors comprise the Agent Selection and Eligibility Standards criterion.
According to the ASES form [2], points will be assigned to the agent depending
upon his/her age. The maximum possible score for an Agent is 12 points and
minimum possible score is 6 points. The company standards suggest that for a
productive agent, he/she should have a minimum of 9 points and the form approved
by the recruiter, Associate Partner and the Office Head. An approval by the zonal
head is required if the score is less than 9.

3. Numerical Ability Tests / Competency based interviews per month

To be a part of the business, a person has to be comfortable with numbers. A soft

copy of the NAT has been enclosed [3]. The test checks the calculation and
understanding abilities in the field of Mathematics. It forms another important stage
of the selection process as the training process involves complex mathematics and a
person’s inability to solve NAT would make it difficult to cope up with the course.
This step is followed by a competency-based interview. The interviewer collects
details regarding a few competencies.

The prioritized competencies involve:

1. Entrepreneurship
• Proactive attitude
• Self starter and self motivated/ Self reliance
• Be your own boss
• Drive to make money for self and MAX

28
2. Selling and Influencing
• Asks intelligent, meaningful; questions
• Listens actively, responds and summarizes for understanding
• Active prospecting to attract & acquire customers
• Closes the deal

3. Perseverance
• Handling rejections
• Bouncing back after rejections
• Consistently working towards the goal
• Positive attitude

4. Relationship Building/ Customer Service

• Interest in meeting people & keeping in touch
• Warm and outgoing personality
• Sense of integrity

5. Planning and organizing

• Planning the activities of the day

• Following discipline of adhering to the laid down process
• Performing well under pressure

6. Communication

• Create understanding and rapport through body language

• Listening and observing carefully
• Inspiring trust and confidence
• Engaging the client of meaningful conversation

Each of the above abilities is measured by a few questions, which are present in the Agent
Recruitment Interview file. The file cannot be enclosed as it is meant to be confidential.

4 Career Seminars per month

After the initial introduction of the prospects to the company, they attend a career
seminar that is held normally a couple of days before the training session. The in-house
training professionals address the career seminar, in which the prospects are given a
presentation for a period of 15-20 minutes. They are explained the various financial,
technical and business support and benefits they would receive on being associated with the
company. This step gives a major boost to the people and increases the chance of their
association with the company

29
 5 Project-200 / Market Surveys

This is a guide which focuses entirely on prospecting, its role in the agents day-to-
day life and its enormous value to your initial survival and ultimate success. The P-200
suggests a lot of valuable information for the recruiter as well as the agent for his future
work. The recruiter analyses the P-200 and gives a picture of the network of the prospect. It
is also an educational process for the prospect as he learns that not every person he meets is a
prospective customer, but to be considered a prospective customer, the person:

• Must have a need

• Can qualify for the coverage
• Can afford the coverage
• Can be approached by you

It gives a first hand experience to the prospective agent to identify their initial markets.

6. Career Interviews

A formal interaction of the prospective agent with the head of the office is
arranged. This forms the final step before the agent attends the training.

7. Training

The office is equipped with world-class infrastructure and two in-house trainers
who are always at the disposal of the candidates and provide complete guidance. The candidates
are also free to use the in-house facilities of fax, xerox machines, scanners and telephones.

30
Fig 3.3

31
3.3 METHODOLOGY

The market of insurance industry is widely divided into two parts:

• Warm Markets
The prospects belong to the personal contacts such as the friends, relatives
and colleagues of the recruiter

• Cold Markets
The recruiter explores untouched, new markets for prospects. This market
requires more hard work as it takes more effort to convince people who are unaware about
the company and the industry.

To recruit agents a survey was conducted within three types of groups in Kolkata

1. Business People
2. Housewives
3. College Graduates

Business People

I have surveyed around 50 business people who are working in small shops in the
crowded city. Most of them belonged to Marwari Community. The main reason to survey
these people was that there was an immense scope to network and hence providing a growth
option to anxious people.
I found that people have very less knowledge about insurance, they take insurance as
a tax benefit tool. But still out of around 50 people, 5 were interested to attend the career
seminar.

Housewives

I had a contact base of around 120 housewives, which I got from my local relatives and
friends. The housewives are these days involved in some or other networking business like
HUL, Amway, Tupperware, etc. Most of them showed interest in order to earn money and to
do something big in their life. Around 8 of them came for screening test.

College Graduates

The college graduates were targeted so as to offer them a career opportunity. Max New
York Life gives a career option to all its agents depending on the performance. They call the
process as Avenues, where agents on the basis of performance are taken into permanent
payroll system. Around 60 college students who just graduated were contacted, out of which
a few in number showed interest as they all were interested to be in permanent payroll from
the very starting.

32
Behaviour Charts on Agent as Career

33
34
IV Guide To Tax Planning

4.1 What Section 80C offers

Section 80C is the most important Section for saving tax purpose and all tax-payers
individuals only) who irrespective of income levels, age, gender or profession can avail tax
benefit upto Rs. 1,00,000, under this section for their income by investing or spent in the
variety of instruments specified by the government. Now, the main concern of explaining the
tax structure and the Section 80C is to make it convenient for you to understand how to spend
this Rs. 1,00,000 in a manner that will help you to get the tax deduction and at the same time
help you achieve your financial goals. Individuals with an annual income of Rs. 1,50,000 are
exempt from tax; those falling in the income bracket of Rs. 1,50,000-Rs. 3,00 ,000 are subject
to a tax of 10%. For those earning between Rs. 3,00,000 to Rs. 5,00,000 a 20% tax is charged
and anything above Rs. 5,00,000 a tax of 30% is paid. A relief is provided to the resident
individual belonging to lower income group. A resident individual having taxable income up
to Rs. 1,50,000 is not subject to paying any income taxes. Such individual will be entitled to
rebate equal to the amount of tax payable on taxable income up to Rs. 1,50,000. However, no
suchrebate will be available to an individual with the taxable income exceeding Rs. 1,50,000.
This will adversely affect individuals whose taxable income marginally exceeds Rs. 1,50,000.
Women get additional benefit in tax exemption upto a limit of Rs. 1,80,000. And senior
citizens get benefits upto Rs. 2,25,000. Under Section 80C you are exposed to the following
options:

1. Equity Linked Saving Schemes (ELSS)

2. Life Insurance Premium
3. Public Provident Fund (PPF)
4. National Saving Certificate (NSC)
5. Home Loan Repayment
6. Provident Fund (PF)
7. Fixed Deposit (FD)
8. Infrastructure Bonds

4.2 Tax liability

Filing of Income Tax Return

1. Filing of income tax return is compulsory for all individuals whose gross annual
income exceeds the maximum amount which is not chargeable to income tax i.e. Rs. 1,80,000
for Resident Women and Rs. 2,25,000 for Senior Citizens and Rs. 1,50,000 for other
individuals and HUFs.

2. The last date of filing income tax return is July 31, in case of individuals who are not
covered in point 3 below.

3. If the income includes business or professional income requiring tax audit (turnover
Rs. 40 lakhs the last date for filing the return is October 31.

4. The penalty for non-filing of income tax return is Rs. 5000.

35
4.3 Tax Slabs

In India, life insurance is one of the most popular savings or investment and tax-
planning vehicles. However, an insurance policy presents much more than just tax planning
and investment returns. It empowers you to plan for unexpected or unforeseen events that
could adversely affect your family's financial situation. The table below illustrates the
income tax rates for individual for the Financial Year 2008-09:
Assessment Year 2009-10:

Table 4.1
Please note that a surcharge of 10 per cent of the total tax liability is applicable where the
total income exceeds Rs 1,000,000.
Education Cess @ 3% will be payable on the amount of income tax (including surcharge).

4.4 Tax Free Incomes

The following incomes are completely exempt from income tax without any upper limit.

1. Interest on PPF/GPF/EPF.

2. Interest on GOI tax-free bonds.

3. Dividends on Shares and on Mutual Funds.

4. Any capital receipt from life insurance policies i.e., sums received either on death of the
insured or on maturity of life insurance plans. However, in case of life insurance policies
issued after March 31, 2004, exemption maturity payment u/s 10(10D) is available only if the
premium paid in any year does not exceed 20% of the sum assured.

5. Interest on savings bank account in a post office.

6. Long term capital gain on sale of shares and equity mutual funds if the security transaction
tax is paid/imposed on such transactions.

36
4.5 Gift Tax

Gift tax was abolished with effect from October 1, 1998. The gifts are no longer
taxable in the hands of donor or donee. However, with effect from September 1, 2004, any
gift received by an individual or HUF will be included in taxable income, provided the
amount of gift exceeds Rs. 25,000. However, gifts received from any of the following will
continue to remain tax-free:

1. Spouse

2. Brother or sister

3. Brother or sister of the spouse

4. Brother or sister of either of the parents of the individual

5. Any lineal ascendant or descendant of the individual

6. Any lineal ascendant or descendant of the spouse of the individual

7. Spouse of the person referred to in (2) or (6)

Also, gifts received on the occasion of marriage or under a will by way of inheritance are also
tax free

37
4.6 Insurance- the smart way of tax planning

Nobody can deny the protection that insurance offers. It is one of those tools that we
tend to miss out on assuming a good health and a long life. So when you question whether
you need insurance, the answer that you may get is a resounding ‘yes’, you definitely need
insurance and you just cannot afford to say, ‘No’. Life insurance can play an important role in
the overall strategic-planning process. Lets analyse which policy suits you the best.

Which policy suits you the best?

The type of policy that suits you best depends on many factors like income, monthly
expenditure, number of dependent members, etc. The policy that you choose should
completely depend on how much risk you would want to secure. If you are the sole
breadwinner of the house and you have more number of dependants then you would need to
choose the insurance coverage that is sufficient enough to take care of your family expenses
in your absence. In such a case, a ‘term policy would suit you. Term policy-it is the purest
form of life insurance. The policy keeps you in the protection net for a specific term. Should
the insured person pass away, your nominee would receive the insured amount assuming, you
have insured yourself for Rs. 20 lakhs. So you decide the amount for which you want your
family to receive if some unfortunate incident happens to you. Incase you survive the term;
you do not receive any maturity amount. But one should not look at it from ‘expense’ point of
view. An insurance policy be it a term, whole, endowment or ULIP are good enough choices
with its own unique features. It is recommended to opt for a term policy when you are in your
teens. Whole life policies- cover the insured for life. On attaining the maturity age, the
insured receives the due amount along with the bonus. Whole life policies offer the highest
bonus and cost less compared to endowment policy. If you want insurance protection that
extends throughout your lifetime, whole life policy is the ideal one for you. However the
premium paid is throughout till the maturity age (80-100 years).

Endowment policies - these are the best selling policies among investors, endowment
policies are those which offer cover for a specific term that has been opted by the insurer. On
surviving the term, the policyholder receives the insured amount hence the premium payment
is more with endowment policies. The returns are topped with bonus too. Endowment
policies are broadly classified into two types - With-profit and Without profit plans.

‘With-profit’ policy comes with the bonus declared by the Life Insurance Corporation
from time to time. It is paid at the time of maturity of the policy. In a ‘Without-profit’ plan,
the due amount is paid without any bonus announced by the Corporation, which otherwise is
applicable with ‘With-profit’ plan. The premium rate charged for a ‘With-profit’ policy is
therefore slightly higher. In a ‘Without-profit’ policy only the sum assured is offered. In
Money back policies- a part of the sum assured is received by the policyholder, which is
given by the insurance company at regular intervals, which can be put to use for various
purposes. Pension schemes - are policies that offer money to the insured at the retirement age.
If the insured dies during the term of the policy, his nominee will get the insured amount
either in lump sum or every month.

If you feel, you need more benefits, there are optional add-ons called as ‘riders’ that
can be attached to the base insurance policy. You can get riders with the additional premium
payment. The benefits are worth the extra premium paid. Double Accident Benefit Rider will
offer your family double the sum assured should anything happen to you in an accident. Say

38
if your cover were of Rs. 10 lakhs, your family would receive Rs. 20 lakh. Critical Illness
Benefit Rider-on contracting illnesses such as cancer, kidney failure, heart attack, etc., the
insurance company pays the insured amount. It has a maximum limit of Rs. 10 lakhs.
Disability Benefit Rider-if you become permanently disabled and are unable to support
yourself, the insurance company will provide you with an income up to a specified amount
till the term end of your policy.

However, the payment of the premiums may vary from a person to a person. The
premiums calculated depend on various reasons, say a person has contracted a particular
disease or has undergone a by pass surgery; the premium payment would increase thereby.
One shouldn’t look at a policy only from the premium point of view. Always choose a policy
with the features that suits your needs.

At times it becomes difficult to say which policy is the ideal one. As days go by, there
are new changes and with that arises new needs. At such times you
would need to choose policy that would aptly fit into your then wants or better still keep
upgrading it. A single policy cannot meet all your needs hence it is advisable to own couple
of policies, which will have varied benefits suiting your requirements.

4.7 Mediclaim

To have a Mediclaim policy is as important as having a Life Insurance policy. A

mediclaim policy provides for reimbursement of expenses incurred for hospitalization for the
illness specified in the policy purchased. It is a must-have for every individual to be covered
under a mediclaim policy as it takes care of the medical expenses when you leave the hospital
with a fat bill.

Apart from this, it also qualifies for tax benefits u/s 80D. The Income Tax Act provides
for various deductions for medical expenses incurred by a taxpayer. The deduction is for the
premium paid on the medical insurance policy taken by an individual for his own health or
for the health of his spouse, dependent parents or dependent children are eligible for
deduction. The following conditions will have to be satisfied to claim the deduction:

• The mediclaim policy should be in accordance with the schemes framed by the General
Insurance Corporation and approved by the Central Government or any other approved
insurer.
• The premium has to be paid by cheque in order to claim deduction.

• Such sum will have to be paid out of the income chargeable to tax. This means that if the
premium is paid out of salary income or any other income chargeable to tax, then the
deduction is available. Whereas if it is paid out of agricultural income (exempt from tax),
then such premium is not eligible for deduction on the non agricultural income.

Please note that Senior citizens (individuals >= 65 years) of age have higher tax benefit of Rs
15,000/- of premium for medical insurance. By just paying a small sum as premium on a
mediclaim policy every year, one can avoid huge medical expenses during unforeseen
circumstances. And when such premium also carries tax benefits, there is nothing that would
make things better.

39
4.8 Max New York Life and Tax Benefits

Max New York Life offers various insurance schemes, which helps individuals in tax
planning. Benefits under income tax can be described under two heads - (a) Deductions (b)
Exemptions.

Tax Deductions

Sec 80C

Life insurance premium paid by you for any MNYL product qualifies for a deduction
under Section 80C of Income Tax Act, 1961. You will be able to claim deduction on
premium paid for a maximum of total income subject to a aggregate ceiling of Rs 1,00,000
p.a. including deduction under section 80CCC and 80CCD. Under Section 10(10D) of the
Income Tax Act, any sum received, other than the sum received under Keyman Insurance
Policy, including bonus is exempt from tax. Sec 80D The qualifying amounts under Section
80D is upto Rs.15,000. However, a higher amount of upto Rs.20,000 is allowed if the person
for whose health insurance the premium was paid, was resident and aged 65 years or more at
any time during the financial year in which the premium was paid. Please note that life
insurance premium paid by you for your wife/husband's policy qualifies for a deduction
under Section 80C of the Income Tax Act, 1961.

Sec 80D

In computing the total income of an asseesee, being an individual or a Hindu

undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-
section (3), payment of which is made by any mode, other than cash, in the previous year out
of his income chargeable to tax.

Where the asseesee is an individual, the sum referred to in sub-section (1) shall be the
aggregate of the following, namely:-

The whole of the amount paid to effect or to keep in force an insurance on the health
of the asseesee or his family as does not exceed in the aggregate fifteen thousand rupees; and

The whole of the amount paid to effect or to keep in force an insurance on the health
of the parent or parents of the asseesee as does not exceed in the aggregate fifteen thousand
rupees.

Explanation.–
For the purposes of clause (a), “family” means the spouse and dependant children of the
assessee.

Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1)
shall be the whole of the amount paid to effect or to keep in force an insurance on the health
of any member of that Hindu undivided family as does not exceed in the aggregate fifteen
thousand rupees.

Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section
(3) is paid to effect or keep in force an insurance on the health of any person specified

40
therein, and who is a senior citizen, the provisions of this section shall have effect as if for the
words “fifteen thousand rupees”, the words “twenty thousand rupees” had been substituted.
Explanation - For the purposes of this sub-section, “senior citizen” means an individual
resident in India who is of the age of sixty-five years or more at any time during the relevant
previous year.

Exemption from the proceeds

Commuted pension: 10(10A)(iii)

One-third of the Value on vesting date would be tax free

Life Insurance Proceeds: 10(10D)

This includes any sum received from insurance policy as maturity proceeds, death benefits

Proceeds of keyman insurance are taxable

The single premium policies would be taxed as income in the year it is received assuming
that premium exceeds 20% of the sum assured.

Please note that an insurance policy issued after 1st April, 2003 with respect to which the
premium payable for any of the years during the term of the policy exceeds 20% of the actual
capital sum assured, will not be eligible for Sec 10(10D) benefit. This won't be applicable for
any sum received on the death of a person.

41
SUMMARY AND CONCLUSIONS

42
V. SUMMARY & CONCLUSIONS

5.1 Results Achieved

• Interacted with more than 100 people from different walks of life- Financial
Services, Businessmen, Housewives and retired people.

• Have learned the work culture at Max New York Life Insurance

• Acquired an in-depth knowledge of the insurance industry

• Understood the complexities and difficulties in the industry and have learned to
tackle them with ease

• Have understood the function of Information Technology in an organization.

5.2 Recommendations

• A huge opportunity exists in several industries which can be tapped, for example the
financial institutions, the part time lecturers in universities.

• The process a candidate undergoes before he attends the training stretches through a
period of 12 days. If this could be shortened, it would reduce the attrition level in between
different stages of the procedure.

• Provide males and females equal points in the 12-point system. In the modern era,
women work neck in neck with men and both are equally busy

• Conduct outdoor sessions and kiosks more frequently, as a huge part of the public is
unaware about the opportunities in the industry.

• Sales Manager should maintain very close relationship with agents and keep
motivating them for future business.

• As per Information technology is concerned the company should have dynamic

transfer of data and processing of policies submitted by Agents. In this way, the policy can
be delivered to customers instantly as they pay at the Cash counter.

43
5.3 Results Obtained

DIFFERENT LEVELS OF AGENT RECRUITMENT NUMBER OF CANDIDATES

(RESULTS OBTAINED) AFTER EACH STAGE

New Names 90

Screening 10

Numerical Ability Test 4

Career Seminar 3

Project-200/Market Survey 2

Career Interview 2

Training 1

List of figures

44
Figure No Description Page

3.1 Recruitment Process Map 25

3.2 Recruitment Process Map 26

3.3 Recruitment Process 31

- Recruitment Funnel For the Month

List of Tables

Table No Description Page

4.1 Tax Slabs 36

- Assessment Year 2009-10

List of Appendices

Appendix No Description Page

Appendix 1 Acknowledgement 1

Appendix 2 Certificate 2

Appendix 3 Execute Summary 3

Appendix 4 Table of contents 4

References

Websites

• http://www.maxnewyorklife.com/
• http://www.irdaindia.org

Articles

• Guide to Tax Plannings

• Smart Move Intern Program Participant Guide

45