Comparative Study Of Endowment And Term Insurance Plan Commerce Essay

Insurance is an approaching sector, in India the twelvemonth 2000 was a landmark twelvemonth for life insurance industry, in this twelvemonth the life insurance industry was liberalized after more than 50 old ages. Insurance sector was one time a monopoly, with LIC as the lone company, a public sector endeavor. But nowadays the market opened up and there are many private participants viing in the market. There are 15 private life insurance companies has entered the industry.

After the entry of these private participants, the market portion of LIC has been well reduced. In the last five old ages the private participants is able to spread out the market ( turning at 30 % per annum ) and besides has improved their market portion to 18 % .

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For the past five old ages private participants have launched many inventions in the industry in footings of merchandises, market channels and advertizement of merchandises, agent preparation and client services etc. In the western universe, life insurance evolved chiefly from the maritime industry. Started by private moneymans who used to chance on the lives of mariners by offering five times the money deposited with them in instance of certain eventualities?

In its present signifier, life insurance has its beginning in England and made its debit in India in the twelvemonth 1818.Initially, Indians were non considered on par with Europeans every bit far as their insurability was concerned. There were besides many other failures. It was in the early portion of the twentieth century that some sort of statute law was made to modulate the industry. From so on life insurance made great paces in the state.

At the clip of independency and thenceforth, there were more than 200 companies runing in India and non all of them on sound ethical rules. Many factors combined together to motivate the so authorities to nationalise the life insurance industry in 1956 to organize the Life Insurance Corporation of India.

The old ages from 1956 to 1999 proverb the life insurance corporation of India emerge as a elephantine fiscal establishment and the lone organisation provisioning life insurance, if we ignore the minimum presence of postal life insurance. The establishment succeeded in perforating in many countries and sections of the population and in earning public money for public public assistance.

It was in the 1990 ‘s that the air currents of alteration started brushing over India and brought in their aftermath many alterations in the economic system. Liberalization ensured competition in many Fieldss and there was a blare that the insurance industry excessively is opened up to Private Indian and foreign participants to supply the client with a pick.

The Malhotra commission, appointed in 1993 was given the authorization to analyze the industry and to propose the alterations that were necessary to do it modern and in melody with people ‘s aspirations. The study submitted by the commission was the precursor of the IRDA Bill.

By the passing of the IRDA Bill, the Insurance sector has been opened up for the private companies to transport on insurance concern. Now the life insurance industry in India is quickly germinating and turning. It has witnessed a large growing as many Indian and foreign were entered in to the Indian insurance sector. The life insurance industry in India has become ferociously competitory with the entry of several new participants including major transnational insurance companies after the deregulating of the sector. It has opened up a scope of untapped chances for new entrants into the industry, as the possible market for purchasers is high since the emerging market in India has a low insurance incursion and high growing rates.

The assorted life insurance companies entered India: –

1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Company Ltd.

4. Kotak Mahindra Old Mutual Life Insurance Limited.

5. Birla Sun Life Insurance Company Ltd.

6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited.

8. ING Vysya Life Insurance Company Private Limited.

9. Met life India Insurance Company Ltd.

10. Royal Sundaram Life Insurance Company Limited.

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

12. Sahara India Insurance Company Ltd.

13. Shriram Life Insurance Company

14. Life Insurance Corporation of India.

15. Reliance Life Insurance Company Limited.

16. Bharti AXA Life Insurance Company Limited.

Types of insurance merchandises

Term confidence plan- In insurance linguistic communication this is a “ pure hazard screen ” and can be described as an insurance or hazard direction merchandise in its purest and simplest signifier. In instance of your ill-timed decease, your dependants will have the risk-cover sum or the ‘sum assured ‘ . On the other manus, there is no survival benefits if you survive the policy term, and you besides do non acquire back the premiums paid.

Endowment confidence plans- It is a traditional investment-cum-insurance program. In other words, it provides both life screen ( in the event of decease of life insured ) or adulthood benefits if he/she survives the policy term. Endowment programs are typically front-loaded. Therefore it makes sense for you to stay in the policy for at least 12-15 old ages.

Money-back policy- It is a discrepancy of the endowment confidence policy-the difference is that you get the endurance benefits intermittently over the life of the policy. Therefore taking attention of his lump-sum pecuniary demands to enable him to run into his fiscal ends and major committednesss. The adulthood benefit is the amount assured value less the survival benefits already paid under the policy, plus fillips accrued, if any. In instance of prematurely decease the campaigner will have the full amount assured without sing the payouts already made to you before the unfortunate decease.

Whole life plan- This policy provides the life confidence screen for about the full life. Most of the insurance companies provide protection up to the age of 100 old ages. The amount assured is paid to you one time you reach this age, and the policy is terminated. In this payment of premium is for whole life, and the amount assured is paid to your campaigner in the event of your decease. In other words, this is tantamount to a term program over your life-time.

Pension plan- A pension program can be looked as more of an investing merchandise offered by insurance companies to provide to the “ aureate ” retirement old ages of an person. Besides referred to as retirement programs, these are designed to guarantee that you are financially independent during your retirement old ages. Most of the pension programs besides provide an optional life confidence screen in them.

Child plan- It fundamentally aims at guaranting the accomplishment of life ends of your kid. The end can be higher instruction, fiscal aid in set uping a concern or profession, or even matrimony. In a kid program, the life assured can be the parent or the kid. The donee for the policy, nevertheless, is the kid. As a kid is a minor, the life insurance contract is between the parent and the insurance company. In instance of early decease of the parent, the premium payment is waived off by the insurance company and the policy continues as originally planned.

Unit of measurement Linked Insurance Plan- ULIPs have been the favorite of insurance companies, mediators and the insured population likewise over the last five old ages. The chief ground for this popularity is the duplicate advantage of a pure life screen ( insurance constituent ) and a scope of investing financess or options ( nest eggs constituent ) to fit your hazard profile. While the pure life screen provides the much needed fiscal security to your dependants in the event of your ill-timed decease, the nest eggs constituent allows you to take part in the capital markets and build wealth over the long-run term of office of the policy.

Introduction To HDFC Standard Life Insurance.

HDFC Standard Life Insurance Company Limited. is one of India ‘s prima private insurance companies, which offers a scope of single and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited ( HDFC Limited ) , India ‘s taking lodging finance establishment and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43 % and Standard Life ( Mauritius Holding ) 2006, Ltd. holds 26.00 % of equity in the joint venture, while the remainder is held by Others.

Our Key Strengths

Fiscal Expertness

As a joint venture of taking fiscal services groups, HDFC Standard Life has the fiscal expertness required to pull off your long-run investings safely and expeditiously.

Scope of Solutions

We have a scope of single and group solutions, which can be easy customised to specific demands. Our group solutions have been designed to offer you complete flexibleness combined with a low charging construction.

Standard Life Group ( Standard Life plc and its subordinates )

The Standard Life Group has been looking after the fiscal demands of clients for over 180 old ages. It presently has a client base of around 7 million people who rely on the company for their insurance, pension, investing, banking and health-care demands. Its investing director presently administers ?125 billion in assets. It is a prima pensions supplier in the UK, and is rated by Standard & A ; Poor ‘s as ‘strong ‘ with a evaluation of A+ and as ‘good ‘ with a evaluation 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 pension ‘s supplier at the Financial Adviser Service Awards for the last 10 old ages running. The ‘5 Star ‘ award has besides been awarded to Standard Life Investments for the last 10 old ages, and to Standard Life Bank since its origin in 1998. Standard Life Bank was awarded the ‘Best Flexible Mortgage Lender ‘ at the Mortgage Magazine Awards in 2006.

PROTECTION PLAN BY HDFC

Protection Plans help you screen your household from uncertainnesss in life due to fiscal losingss in footings of loss of income that may click upon them incase of your ill-timed death or critical unwellness. Procuring the hereafter of one ‘s household is one of the most of import ends of life. Protection Plans go a long manner in guaranting your household ‘s fiscal independency in the event of your unfortunate death or critical unwellness. They are all the more of import if you are the main pay earner in your household. No affair how much you have saved or invested over the old ages, sudden contingencies, such as decease or critical unwellness, ever tend to impact your household financially apart from the immense emotional loss.

For case, see the illustration of Amit who is a healthy 25 twelvemonth old cat with a income of Rs. 1,00,000/- per annum. Let ‘s presume his income additions at a rate of 10 % per annum, while the rising prices rate is around 4 % ; this is how his income chart will look like, until he retires at the age of 60 old ages. At 50 old ages of age, Amit ‘s existent income would hold been around Rs. 10,00,000/- per annum. However, in instance of Amit ‘s unfortunate death at an early age of 42 old ages, the loss of income to his household would be about Rs. 5,00,000/- per annum.

However, with a Protection Plan, a mere amount of Rs. 2,280/- yearly ( sole of service revenue enhancement & A ; educational Ce ) can assist Amit supply a fiscal shock absorber of up to Rs. 10,00,000/- for his household over a period of 25 old ages.

HDFC Term Assurance Plan

This program is designed to assist procure your household ‘s fiscal demands in instance of uncertainnesss. The program does this by supplying a ball amount to the household of the life assured in instance of decease or critical unwellness ( if option is chosen ) of the life assured during the term of the contract. One can take the ball amount that would replace the income lost to one ‘s household in the unfortunate event of one ‘s decease. This helps your household to keep their fiscal independency, even when you are non around.

Features

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Advantages

High screen at a really nominal cost.

Flexibility to take the Sum Assured.

Additional benefit options can be availed at fringy costs.

Premium sum remains the same over the term of the policy in instance of regular premium

Option of paying individual premium or regular premium.

Tax benefits under subdivisions 80C, 80D and 10 ( 10D ) of Income Tax Act, 1961.

ICICI Prudential Life Insurance Company Limited.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank – one of India ‘s foremost fiscal services companies-and Prudential plc – a prima international fiscal services group headquartered in the United Kingdom. Entire capital extract stands at Rs. 47.80 billion, with ICICI Bank keeping a interest of 74 % and Prudential plc keeping 26 % .

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We began our operations in December 2000 after having blessing from Insurance Regulatory Development Authority ( IRDA ) . Today, our nation-wideA reachA includes 1,960 subdivisions ( inclusive of 1,096 micro-offices ) , over 237,000 advisers ; andA 6 bancassurance spouses.

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For three old ages in a row, ICICI Prudential has been voted as India ‘s Most Sure Private Life Insurer, by The Economic Times – AC Nielsen ORG Marg study of ‘Most Trusted Brands ‘ . As we grow our distribution, merchandise scope and client base, we continue to indefatigably continue our committedness to present first fiscal solutions to clients all over India.

The ICICI Prudential Edge

The ICICI Prudential border comes from our committedness to our clients, in all that we do – be it merchandise development, distribution, the gross revenues procedure or service. Here ‘s a peep into what makes us leaders.

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1. Our merchandises have been developed after a clear and thorough apprehension of clients ‘ demands. It is this research that helps us develop Education plans that offer the ideal manner to truly vouch your kid ‘s instruction, Retirement solutions that are a hedge against rising prices and yet assure a fixed income after you retire, or Health insurance that arms you with the financess you might necessitate to retrieve from a awful disease.

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2. Having the right merchandises is the first measure, but it ‘s every bit of import to guarantee that our clients can entree them easy and rapidly. To this terminal, ICICI Prudential has an adviser base across the length and comprehensiveness of the state, and besides spouses with prima Bankss, corporate agents and agents to administer our merchandises.

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3. Robust hazard direction and underwriting patterns form the nucleus of our concern. With clear guidelines in topographic point, we guarantee just costing of hazards, and thereby guarantee a smooth and hassle-free claims procedure.

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4. Entrusted with assisting our clients run into their long-run ends, we adopt an investing doctrine that aims to accomplish hazard adjusted returns over the long-run.

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5. Last but decidedly non the least, our squad is given the chance to larn and turn, every twenty-four hours in a battalion of ways. We believe this keeps them engaged and enthusiastic, so that they can present on our promise to cover you, at every measure in life.

Insurance Plans

ICICI Prudential has a broad array ofA insurance plansA that have been designed with the doctrine that different persons are bound to hold differing insurance demands.

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The ideal insurance program is one that addresses the exact insurance demands of the person that will depend on the age and life phase of the single apart from a host of other factors.

Life Insurance Plans:

Under Life insurance programs, ICICI Prudential offers programs under the undermentioned major need classs:

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A Education Insurance PlansHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htm ” A

A Wealth Creation PlansHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htm ” A

A ProtectionHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Protection-Plans.htm ” PlansHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Protection-Plans.htm ” A

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Pension & A ; Retirement Solutions:

The primary aim of aA pension program is to assist you supply for your fiscal demands in your station retirement old ages. You will happen a Pension Planning Calculator on the site, meant to do your pension program review every bit simple as possible. The reckoner is the first measure in your Pension Plan strategy, there are othe stairss towards acquiring the Indian pension policyyou need.

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Click here to cognize more about our pension planA solutions.

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ICICI Pru LifeTime Pension Maxima

ICICI Pru LifeStage Pension Advantage

ICICI Pru Elite Pension IIA A A

ICICI Pru Assure PensionA A

ICICI Pru ForeverLifeHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Retirement-Plans/Forever-Life.htm ” A A A

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Protection Plans

The exclusive aim of these programs, as their name indicates, is to function the protection demands of the client and by making so, safeguard one ‘s household from the fiscal deductions of unfortunate fortunes than one can non anticipate.

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Under the Protection Plans platform, A ICICI PrudentialA brings to you the undermentioned merchandises:

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Plan Name

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Plan Type

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Pure ProtectA

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LifeGuardA

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SaveHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Save_n_Protect.htm ” ‘HYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Save_n_Protect.htm ” nHYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Save_n_Protect.htm ” ‘HYPERLINK “ hypertext transfer protocol: //www.iciciprulife.com/public/Life-plans/Save_n_Protect.htm ” ProtectA

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CashBakA

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Home Assure

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TraditionalA

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TraditionalA

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TraditionalA

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TraditionalA

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Traditional

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Comparison of Term Insurance Premium

Company

Policy

5 Old ages

10YEARS

15 Old ages

20 Old ages

HDFC STANDARD LIFE

TERM ASSURANCE

2770

2820

2870

2920

ICICI PRUDENTIAL

LIFE GUARD

3032

3032

3032

3032

Endowment Plan of Life Insurance

Company

Policy

Type OF RISK COVER

MAXIMUM PREMIUM

MIN SUM ASSURED

MAX SUM ASSURD

MAX TERM

HDFC STANDARD LIFE

ENDOWMENT ASSURANCE Plan

LIFE COVER ( LIMITED TERM ) WITH SURVIVAL BENEFITS

30 Old ages

25000

5000000

30 Old ages

ICICI PRUDENTIAL

SAVE AND PROTECT

LIFE COVER WITH SURVIVAL BENEFITS

30 Old ages

30000

NO BAR

30 Old ages

Children Plan of Life Insurance

aˆ?Helps you secure your kid ‘s dreams

aˆ?Economic support when your kid needs it most

aˆ?Funding major mileposts

Company

Policy

Type OF RISK COVER

MAXIMUM PREMIUM

MIN SUM ASSURED

MAX SUM ASSURD

MAX TERM

HDFC STANDARD LIFE

CHILDRENS Plan

LIFE COVER OR SURVIVAL BENEFITS

25 Old ages

50000

NO BAR

25 Old ages

ICICI PRUDENTIAL

SMART KID REGULAR PREMIUM

SMART KID REGULAR PREMIUM

22 Old ages

100000

3000000

22 Old ages

Decision

Harmonizing to me HDFC standard life is better because it provide better installations and give better policies to clients, doing the clients aware about their policies. More over it is besides good in kids future planning besides. HDFC besides provides term confidence at low monetary value than ICICI prudential.