233 FINANCIAL PERFORMANCE OF LIFE INSURANCE COMPANIES AND PRUDUCTS ABSTRACT V.NEELAVENI* *Lecturer, School of commerce and management, Dravidian university, kuppam. Future is associated with uncertainty. Uncertainty is a universal risk for the mankind. Such type of risk is to be controlled or avoided or financed by everybody. Many types of risk management techniques are there. Insurance is one of the best risk financing techniques. With reforms of regulations and opening up of the insurance sector to the private management in the year 1999, it can be seen the tough competition in the insurance industry. The number of General insurance and Life insurance companies have been increasing in the 21st century. The ultimate person is an investor or customer, who has to get the update information, observe keenly the performance of the companies and their attractive products. The evaluation of financial performance of the life insurance companies is essentially needed to select a best life insurance policy. Five life insurance companies are randomly selected at the time of 2002-03 and evaluated its performance in this endeavor. INTRODUCTION The article presents a brief profile of the companies that have been selected as sample units. The companies that are covered: LIC, ICICI Prudential Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Birla Sunlife Insurance Company Limited and ING Vysya Life Insurance Company Private Limited. 1. LIFE INSURANCE CORPORATION OF INDIA The symbol of Life Insurance Corporation of India (LIC) gives the message of protection to light the lamps of security in as many homes as possible and to help the people in providing protection to their families. 1 The LIC was established in the year 1956 with following main objectives. 1. Meeting the various life insurance needs of the community that would arise in the changing social and economic environment. 2. Spreading life Insurance widely, particularly to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. 3. Maximizing mobilization of people s savings through insurance. 4. Providing good returns to the policyholders (insureds) by investing in attractive securities. 1 Tryst with Trust, the LIC Story, PR& publicity, Yogakshema, (Bombay; 1991), Pp.45-46.
234 5. Acting as trustee of the insured public in their individual and collective capacities. 6. The vision of the Corporation is "a trans-nationally competitive financial conglomerate of significance to societies and pride of India". The mission of the Corporation is that to explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive return, and by rendering resources for economic development. The enforcement of New Economic Reforms in 1991 coupled with the formation of Insurance Regulatory and Development Authority Act (IRDA) of 2000 (which started issuing licenses to private life insurers) has diluted the monopoly position of the LIC. Inspite of 22 new players from the private sector, LIC continues to dominate the business with its widespread activities. Large number of agents numbering over a million and the variety of products introduced. At the end of August 2008, LIC accounted for about 60 per cent of total premium underwritten by the life insurance sector. LIC has played a significant role in spreading life insurance and mobilization of people s money for people s welfare. The market share as at 30.06.2009 is 62.45% in premium and 69.88% in policies. During the fiscal year of 2008-09 the LIC has 3.58 crores policies and sum assured of Rs.3, 90,053 crores. In the year 2008-09, LIC settled over 149 lakh claims for an amount of Rs.37, 893 crores in individual life insurance business. Out of total maturity claims settled over 97% were settled on or before the date of maturity and over 93% of the total non early death claims were settled within 20 days of intimation. The LIC has subsidiary companies such as LIC Nepal, LIC Sri Lanka and Life Insurance Corporation of India International. LIC International is a joint venture offshore company promoted by LIC which commenced its operations in July, 1989 with the objective of offering policies denominated in US $ to NRIs residing in the Gulf. LIC Nepal was formed in 2001 in joint venture with Vishal Group of Industries, Nepal. LIC Lanka was formed in 2003 in joint venture with Bartleet Group of Companies. Sri Lanka LIC Housing Finance was established on 19 June, 1989 in Dubai with the objective of providing long term finance for construction of houses or apartments. LIC Housing Finance Limited Care Homes, a wholly owned subsidiary of LIC Housing Finance Corporation builds assisted community living centers for senior citizens. The LIC has been functioning with head office located at Mumbai, 8 zonal offices and 105 divisional offices in India. It has at least 2048 branches located in different cities and towns of India along with satellite offices attached to about 807 branches, 114916 employees and have a network of around 1.3 million agents by June 2009. LIC s ECS and ATM premium payment facility is an addition to customer convenience. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the offices will facilitate anywhere servicing and many other conveniences in the future. Existing as a towering insurance company over 53 years, LIC has acquired almost monopoly power in sale of life insurance policies in India. LIC has extended its activities in 12 countries other than India with the objective of catering to the insurance needs of Non Resident Indians. The organizational chart of LIC can be framed as below.
235 CENTRAL OFFICE MUMBAI 8 ZONAL OFFICES Bhopal, Chennai, Hyderabad, Kanpur, Kolkata, New Delhi, Patna FOREIGN OFFICES United Kingdom, Mauritius, Fiji 105 DIVISIONAL OFFICES 2048 BRANCH OFFICES 807 SATELLITE OFFICES TABLE: 1 COMPOUND ANNUAL GROWTH RATE (%) Variables from Financial Statements CAGR (%) of LIC Share Capital 0.00 Fixed Assets 16.64 Current Assets 09.63 Cash and Bank Balances 5.37 Current Liabilities 24.44 Net Working Capital 3.79 Policy Liabilities 17.41 Total Income 20.51 Premium Income 19.13 Income from Investments 23.24
236 Other Income (03.90) Profit Before Tax 11.44 Insurance Benefits delivered 21.26 Commission Paid 16.34 Operating Expenses 15.09 FIGURE: 1 25 20 15 10 5 0-5 CAGR (%) of LIC Share Capital Fixed Assets Current Assets Cash and Bank Balances Current Liabilities Net Working Capital Policy Liabilities Total Income Premium Income Income from Investments Other Income Profit Before Tax Insurance Benefits delivered Commission Paid Operating Expenses Table: 1 shows that the Compound Annual Growth Rates of several variables of the LIC. The CAGR of fixed assets of LIC is 16.64%. The growth rate of current liabilities is recorded as highest (24.44). The growth rate of Income from investments and Insurance benefits are considered as good. And the corporation s other income is showing negative growth rate. The corporation has issued number of insurance products in order to satisfy the customer needs and requirements. Some of these products are discussed in the following lines. JEEVAN NISCHAY LIC s Jeevan Nischay is a single premium, guaranteed return and closed ended plan designed for giving financial protection to the policyholders. The plan is sold only for existing customers. The eligibility age to enter into the policy is from 18 years to 50 years. The range of sum assured is Rs. 10,000 Rs. 10, 00,000. The policy terms are available in terms of 5, 7 and 10 years. There will be higher maturity incentive for the policyholder who will pay premium amount is Rs. 25,000 or more. There will be loan facility after completion of one year. It can be surrendered after one year of commencement of the policy. Death benefit is five times the single premium during the first policy year, after that it is equal to sum assured. Maturity benefit is sum assured plus loyalty additions.
237 NEW BIMA GOLD New Bima Gold is a special plan, where premiums paid over the term of plan is paid back during the policy term in installments and life insurance cover is available not only during the term but also during the extended term of the plan. Eligibility age to enter into plan starts from 14 years to 57 years. The maximum maturity age is 75 years. The policy is available in terms of 12, 16 and 20 years. The range of sum assured is Rs. 50,000 to unlimited. The sum assured is in multiples of Rs. 5000. 15% of sum assured paid as survival benefit for every four years. Death benefit is an amount equal to sum assured under the basic plan on death of the life assured during the policy term provided the life cover is in force. Payment of an amount equal to 50% of sum assured under the basic plan on death of the life assured during the extended term provided all the premiums under the policy have been paid. The extended term shall be half of the policy term after the expiry of the policy term. There will be loan facility, surrender value and guaranteed surrender value. In addition accidental death and disability benefits, optional rider benefits and paid up value are available in this policy. CONVERTIBLE TERM ASSURANCE POLICY The Convertible Term Assurance Policy is designed to meet the needs of investors who are initially unable to pay the larger premium required for a whole life or endowment assurance policy, but they have hope to pay for such a policy in the near future. The policyholders have an option of converting a policy into endowment assurance or limited payment whole life assurance. The range of sum assured amount is Rs.50, 000 1, 00, 00,000. The term of the policy is 5 to 7 years. Premium can be paid yearly, half-yearly, quarterly and monthly up to maximum of 55 years old of insured. The survival benefit is not applicable and the sum assured is payable only in the event of death of the life assured before the expiry of the specified term. TWO - YEAR TEMPORARY ASSURANCE POLICY The Two year Temporary Assurance Policy is designed for people who specially require insurance cover against risk for a short period like two years. It is without profit plan. The premium can be paid at once. There is no survival benefit, surrender value and loan availability. The eligibility age to enter into the policy starts from 18 years to 60 years. Sum assured amount is from Rs. 50,000 to 1, 00,000. Death benefit is total sum assured amount. THE ENDOWMENT ASSURANCE POLICY The Endowment Assurance Policy is suitable for people of all ages and social groups who wish to protect their families from a financial distress. It is saving oriented plan. The main features of this policy are moderate premiums, more bonuses and high liquidity. The eligibility age to subscribe the policy is in between of 12-65 years. The sum assured amount starts from Rs. 50,000 to unlimited. The term of the policy starts from 5 years to 55 years. The premiums are paid annually, half-yearly, quarterly and monthly. The sum assured is paid only at the end of the policy term or death of the policyholder whichever is earlier. Loan facility is available for the policy. The disability benefit is available in respect of the Rs.20, 000 sum assured on any one s life. Accident benefit can be availed by the insured on payment of extra premium of Rs. 1 per Rs. 1000 sum assured per year.
238 JEEVAN ANAND Jeevan Anand is a combination of endowment and whole life plans. It provides financial protection against death throughout the lifetime of the life assured with the provision of payment of lump sum at the end of the selected term of his/her survival. Premiums can be paid monthly, quarterly, half-yearly and yearly. As it is with-profits plan, the policyholder can participate in the profits of the corporation in the form of bonus. Simple reversionary bonuses declare per thousand sum assured annually at the end of each financial year. Additional bonuses are also paid for certain minimum period. Survival benefit of the plan is sum assured and vested bonuses at the end of the term. Death benefit is sum assured amount plus all declared bonuses. Accident benefit is sum assured amount up to Rs. 5 lacs. Extra benefits can be opted by the insured on extra premiums. The facility of surrender value is available. The guaranteed surrender value is paid after paying 3 years or more premiums and the value is 30% of the basic premium excluding first year s premium. WHOLE LIFE POLICY Whole life policy is suitable for people of all ages who wish to protect their families from financial crisis. The premium is payable lump sum called as single premium. The premiums are paid yearly, half yearly, quarterly and monthly. The policy will be chosen in between of 35 years and 80 years. The policy is with profit plan and the profit will be distributed to policyholders in the form of bonus. Simple reversionary bonuses are declared per thousand sum assured annually at the end of each financial year. Additional bonus is also paid for certain minimum period. The sum assured plus bonuses paid in a lump sum upon the death of the life assured. As it does not have a maturity date, an option is to take the sum assured plus all bonuses at any time after 40 years from the date of commencement of the policy. Optional benefits can be added to basic plan for extra protection at cost of additional premium. Surrender value is available. On earlier termination of the plan, the guaranteed surrender value is 30% of the basic premiums paid excluding the first year s premium. The value is 90% in case of a single premium policy. JEEVAN NIDHI Jeevan Nidhi is with - profit and deferred annuity plan. The amount of sum assured, guaranteed additions and bonuses is used to generate a pension for the policyholder. The age of eligibility to enter into the policy starts from 18 years to 65 years. The terms of policy are 6-35 years for single premium policies and 5-35 years for regular premium policies. Premiums are paid yearly, half-yearly, quarterly and monthly. The minimum sum assured amount is Rs. 50,000. Minimum annual premium is Rs. 3000 and single premium is Rs. 10,000. The annuity is paid to the life assured as long as insured alive. The annuity increases every year at a simple interest rate of 3% per annum. The annuity is paid to the life assured for periods of 5 or 10 or 15 or 20 years as chosen by insured. The purchase price of the annuity is paid as death benefit. Loan facility is not available in this policy. The maximum sum assured under the basic plan subject to a limit of Rs. 5, 00,000 taking all critical illness riders. Rebate of 2% on yearly premium and 1% on half yearly premium can be availed by the insured. In case of death due to any accidents the sum assured will be paid as accident benefit. Sum assured will be paid over a period of 10 years in monthly installments. Term assurance and critical illness rider are as optional riders. Critical illness rider will be payable in case of diagnosis of defined categories of critical illness subject to certain terms and conditions. The policyholder can revive his/her lapsed policy by paying arrears of premium
239 together with interest rate within a period of five years from the date of unpaid premium. The interest rate is 9% charged. Grace period of 30 days will be available for payment of premium which can be paid yearly, half- yearly or quarterly. The policyholder can return the policy to the corporation within 15 days, if he / she is not satisfied. JEEVAN KISHORE The plan is an endowment assurance plan available for children who have less than 12 years of age. The policy can be purchased by any parent or grandparent. There will be risk coverage either after two years from the date of commencement of the policy or from the immediate policy anniversary, following the completion of 7 years age of child whichever is later. Premiums are paid monthly, quarterly, half-yearly and yearly. It is with-profits plan and policyholder can get the participation in the profits of the corporation in the form of bonus. Simple reversionary bonus paid per Rs. 1000 sum assured annually at the end of each financial year. Final bonus may also be paid for certain minimum period. Maturity benefits are sum assured and bonuses are paid at the end of policy term. Death benefits of sum assured and bonuses on death of the life assured. Premium waiver benefit is available on death of proposer. Surrender value is available and guaranteed surrendered value is after completion of 3 or more policy years. THE MONEY BACK POLICY The money back assurance plan that provides financial protection against death throughout the term of plan along with the periodic payments on survival at specified durations during the term. Survival benefits are payable only at the end of the endowment period. In the event of death at any time within the policy term, the death claim comprises full sum assured benefit is payable. Premiums are payable yearly, half- yearly, quarterly and monthly or through salary deductions as opted by insured. As it is with - profit plan, policyholders get profits in the form of bonuses. Simple reversionary bonuses will be declared per thousand sum assured annually at the end of each financial year. Additional bonuses are also paid for certain minimum period. Survival benefits are paid certain percentage of sum assured at the end of the specific duration. The sum assured and bonuses are payable in a lump sum upon the death of the life assured during the policy term irrespective of the survival benefits paid earlier. There are optional benefits that can be added to the basic plan for extra protection for consideration of paying additional premium. As it is long-term policy, surrender values are available on earlier termination of the policy. BIMA BACHAT Bima Bachat is one of the money back policies. It offers financial security and assurance to the policyholder and his/her family. Policyholder is required to pay only one premium, which depends on the duration of the policy taken and life insurance available till the date of maturity. Eligibility age to enter in to the policy starts from 15 years to 66 years and maximum maturity age is 75 years. There are terms to choose among 9, 13 and 15 years. Sum assured starts from Rs. 20,000. The policyholder will receive 15% of the sum assured at the end of every 3 rd and 6 th policy year and so on. The policy is having surrender value and loan facility. The guaranteed surrender value is available only after completion of premium paid at least one policy year, the value is equal to 90% of the single premium paid.
240 2. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED Industrial Credit and Investment Corporation of India (ICICI) was established in 1955 with the objective of extending financial assistance for industrial development. 2 Later, it became a group company. The ICICI Group offers a wide range of banking products and affiliates in the areas of personal banking, investment banking, life and general insurance, venture capital and asset management. The ICICI Group entered in the field of banking as ICICI Bank, in the field of life insurance business as ICICI Prudential Life Insurance Company, in the field of general insurance business as ICICI Lombard General Insurance business, in the field of non-banking business as ICICI Securities Limited, in the field of dealer of government securities as ICICI Securities Primary Dealership Limited, in the field of mutual funds as ICICI Prudential Asset Management and in the field of equity organizations as ICICI Venture. ICICI Bank was set up in 1994 and developed as the largest private sector bank in India, and it is the largest issuer of credit cards in India. 3 It was the first bank to offer a wide network of ATMs. The ICICI Bank is also a pioneer in providing banking products and financial services to corporate and retail customers. The products of the bank are loans, credit cards, savings, investment for vehicles, insurance etc. The value of total assets of the bank is $ 120.61 billion as on 31march 2009. The ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Dubai, International Finance Centers, and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. And its UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). The ICICI and Prudential Plc came together and established ICICI Prudential Life Insurance Company Limited. Prudential Plc is a United Kingdom-based financial services company founded on 30 May 1848 in Hatton Garden in London as the Prudential Mutual Assurance Investment and Loan Association to provide loans for professionals and working people. 4 In 1854, the company began selling the relatively new concept of industrial branch insurance policies to the working class population for low premiums through agents who operate as door to door salesmen. It was converted into a limited company in 1881. The company was first listed on the London Stock Exchange in 1924.The company has over 21 million customers worldwide. It has operations in 12 countries in Asia associate with UK. It founded the Egg internet bank, which was sold to Citigroup in 2007. The ICICI and Prudential have shares of 74% and 26% resepectively in ICICI Prudential Life Insurance Company. The company started its business in December 2000. It has tied up with ICICI bank, Bank of India, Federal Bank, Lord Krishna Bank, and some of co-operative banks, NGOs, MFIs and other corporations. Currently, the company has 2000 branches more than 274,500 advisors and 20 bancassurance partners all over India. The ICICI Prudential was the first company to receive the rating of AAA from Fitch ratings. 2 <http://www.iciciprulife.com> 3 <http://www.icicibank.com/pfsuser/aboutus/newsroom/history/history.htm> 4 <http://en.wikipedia.org/wiki/prudential_plc>
241 The vision of the company is to be the dominant life, health and pensions player built on trust. Values of the company are integrity, customer oriented, boundary less, ownership, and passion. Understanding the needs of customers and offering them superior products and services, leveraging technology to service customers quickly, developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to policyholders, providing an enabling environment to foster growth and learning for employees and building transparency in all dealings are the main goals of the company. As on 31 December 2006 it captured over 360 cities or towns in India. The company recorded a total new business premium of Rs. 51.6 billion during fiscal year of 2007 as compared to Rs.26.0 billion during fiscal year of 2006, thereby growth of 98.4% observed. As per the information of 14 June 2007, among all private players, ICICI Prudential topped by rising with its premium income of 84.5 per cent is equal to Rs 271 crore and had 9.08 per cent of the market share. The company completed eight full years of operations, during this period it sold over seven million policies and acquired assets of worth Rs. 28,000 crore. It sustained its leadership position with an overall market share of 11.8 per cent. For the year ended 31 March 2008, it wrote nearly 3 million policies and it has a network of 1,956 offices, 2,91,000 advisors, as well as 21 bank partners. The ICICI Prudential has undertaken and offered unique programme, Pragati Ki Anokhi Paathsaala (PKAP) for the rural children of India. PKAP aims to bring out the inherent creative skills amongst children and expose them to the unique and thought provoking learning methods. The ICICI Prudential Life is the only life insurance company in India providing local language sales literature and customer support. As on 31 March 2009, the company offered customer support in ten languages including Hindi, Punjabi, Gujarati, Telugu, Malayalam, Kannada, Tamil, Bengali and Marathi in addition to English. ICICI Prudential Life has also partnered with e-governance kiosks in Andhra Pradesh - aponline.com and Rajasthan - emitra.com, to enable consumers renew their policies in their kiosks. TABLE: 2 COMPOUND ANNUAL GROWTH RATE (%) Variables from Financial Statements CAGR (%) of ICICI Share Capital 18.9 Fixed Assets 30.25 Current Assets 41.49 Cash and Bank Balances 38 Current Liabilities 56.1 Net Working Capital 77.69 Policy Liabilities 41.22 Total Income 86.4
242 Premium Income 69.13 Income from Investments 155.27 Other Income 17.06 Profit Before Tax -209.65 Insurance Benefits delivered 201.82 Commission Paid 49.3 Operating Expenses 46.77 FIGURE: 2 250 200 150 100 50 0-50 -100-150 -200-250 CAGR (%) of ICICI Share Capital Fixed Assets Current Assets Cash and Bank Balances Current Liabilities Net Working Capital Policy Liabilities Total Income Premium Income Income from Investments Other Income Profit Before Tax Insurance Benefits delivered Commission Paid Operating Expenses Table: 2 shows that the Compound Annual Growth Rates of several variables of the LIC. The CAGR of fixed assets of LIC is 30.25%. The growth rate of commission paid is recorded as highest (49.3%). The growth rate of Income from investments is considered as good. And the corporation s profit before tax is showing negative growth rate. The company has offered different types of plans under the different categories based on the needs of the policyholders. Some of these plans are discussed in the following lines. ICICI PRU ELITE PENSION ICICI Pru Elite Pension is a unique unit-linked pension policy designed for specific customers. It enables to pay flexible premiums for a limited period and making top-ups also. The eligibility age to enter into the policy is starts from 18 years to 74 years. The range of
243 policy term is 6-62 years. The minimum premium is to be paid is Rs. 3,00,000 per annum. Maximum sum assured is equal or above of Rs. 25,00,000. The term of the premium payment is 3 years. The range of vesting age is 50-80 years. Policyholder can chose the date from which the pensions will be received. Among eight investment funds, policyholder can select any funds based on their financial goals and risk profile with switching facility of four times a year, at no cost. There is a facility of additional allocation of units at the end of every 5 th policy year at the rate of 1.5% of the average of the daily fund values, if due premiums are paid in first three policy years. ICICI PRU PURE PROTECT ICICI Pru Pure Protect entitles the policyholder to insure life and provide total security to his/her family at a very affordable cost. The eligibility age to enter into policy is starts from 18 years to 65 years. The maximum maturity age is 75 years. The minimum annual premium is Rs.2400 per annum. Premiums are paid yearly, half-yearly and monthly. The maximum sum assured is Rs.25,00,000. The term of the policy is in between of 10 30 years. Death benefit is sum assured amount and no maturity benefit. Additional benefits like accidental death and disability benefit rider and waiver of premium riders are available along with tax benefits. ICICI PRU PINNACLE ICICI Pru Pinnacle is a unit linked insurance policy which gives downside protection. Policyholder can enjoy insurance protection for a longer period with limited premium payment. The eligibility age to enter in to the policy is starts from 8 years to 65 years. Maximum maturity age is 75 years. Maximum sum assured is 5 multiples of annual premiums. The minimum premium is Rs. 50,000 per annum for the term of 3 years. Premium is paid half-yearly and yearly. The term of the policy is 10 years. Death benefit is higher of sum assured or fund value with partial withdrawal facility from 6 th policy year onwards. Maturity benefits are paid either higher of fund value or guarantee value with additional allocations. The fund value is equal to units multiplied with net asset value. ICICI PRU LIFE TIME MAXIMA ICICI Premium Life time Maxima is unique strategy that entitles the policyholder to gain through his/her funds invested in the equity markets and also provides an insurance cover. The eligibility age to enter into the policy starts from 0 to 65 years. Maximum maturity age is 75 years. The sum assured amount is five multiples of annual premiums. The policy terms are 10,15,20,25 and 30 years. Minimum premium is Rs. 24,000 per annum. Premiums are paid monthly, half-yearly and yearly. It provides to investors multiple investment options which are triggers of portfolio strategy and fixed portfolio strategy. Additional allocation of units allowed from 6 th year onwards which results more than 100% allocation to fund on premium payment. Death benefit is higher of either sum assured or fund value by allowing partial withdrawals every 3 years starting from 6 th policy year. Maturity benefits are paid as fund value and based on chosen options. SAVE N PROTECT Save n Protect policy is suitable for long term investors to meet long term objectives. The minimum sum assured amount is Rs. 50,000. The term of the policy starts from 10 to 20
244 years. Investor can enter into the policy from 0 to 60 years. The maximum maturity age is 70 years. The minimum premium is Rs. 6,000 per annum. The premiums are paid annually, half yearly, and monthly. Death benefits as well as maturity benefits are sum assured and guaranteed bonus. Insured can enjoy 5 years extended life coverage period at 50% of the sum assured after the maturity of the policy. CASH BAK Cash Bak insurance plan is a fixed term insurance plan, which provides money at regular intervals to keep the policyholders financially sound. The eligibility age to enter into the policy starts from 16 years to 55 years. The minimum sum assured starts from Rs.75,000. Guaranteed additions are received as additional sums at the rate of 3.5% compounded annually on the sum assured for the first four years. Maturity benefit is 50% of sum assured and guaranteed additions. On the death of the policyholder, the nominee will be entitled to receive sum assured along with guaranteed addition for the first four years along with bonus. SMART KID REGULAR PREMIUM PLAN Smart Kid Insurance plan is a fixed term insurance plan that provides funds at regular intervals. It is an exclusively education insurance plan which is offered by the company in 3 choices of Smart Kid New Unit Linked Regular Premium, Smart Kid New Unit Linked Single Premium and Smart Kid Regular Premium. Basically it is unit linked plan and enable the insured and insured s child to accumulate wealth by virtue of the performance of the underlying market linked instrument. The minimum premium is Rs. 10,000 per annum which will be invested in the selected funds. The minimum sum assured is 5 times of annual premium. The term of the policy will be calculated as the difference between child s current age and the age of the child when the policy matures. In this policy Smart Kid Unit Linked Single Premium is another choice. For which the premium is paid Rs. 50,000 onwards. Another option is Smart Kid Regular Premium which has guaranteed bonus option. The bonus is 3.5% per annum for the first 4 premium paying years and an annual vested bonus in subsequent years. The regular payouts are paid for the education of a child. Income benefit rider is another option to make attractive the policy. Accidental death disability rider and waiver of premium riders ensure the child stays double protected at all times. The premium will be calculated based on 3 factors such as sum assured, policy tenure and age of the policyholder. LIFE TIME GOLD Life Time Gold is a regular premium unit - linked policy that offers potentially higher returns through the multiplier that invests in the top 50 large cap companies. It offers protective benefits of an assurance cover and financial security for insured s family. Insured can invest for a minimum of 10 years and a maximum of 75 years. There are 7 investment funds are available, among the funds, policyholder can select any funds of Flexi Growth, R.I.C.H., Multiplier, Flexi balanced, Balancer, Protector and Preserver based on his/her financial goals and risk profile. The eligibility age to enter in to the policy is in between of 0-65 years. The maximum age of maturity of the policy is 75 years. Minimum premium is Rs. 20,000/- per annum. The minimum sum assured amount is 5 times of annual premium, subject to minimum of Rs. 1,00,000. Systematic withdrawal facility is available in installments from 4 th year onwards. Maturity benefit is fund value. Death benefit is higher of either fund value or
245 sum assured. Switching is possible between funds any time to adjust a portfolio based on insured s financial goals and risk profiles. Switching of 4 times a year is allowed at no cost. 3. BAJAJA ALLIANZ LIFE INSURANCE COMPANY LIMITED The Bajaj Group is one of the biggest two and three wheeler manufacturers in the world. 5 Bajaj Allianz Life Insurance Company Limited was incorporated by both the Bajaj Group and the Allianz SE., which is a Germany based company and one of the largest asset managers in the world. Allianz SE has over 115 years of financial experience over 70 countries. It is a leading insurance conglomerate and one of the largest asset managers in the world. The objective of Allianz life Insurance company is to become loyalty leader in all chosen markets and further strengthen its sales channels with a special focus on recruiting, training and developing agents. It has been managing assets worth over Rs. 55,00,000 crore. Allianz SE has its head office in Munich. Allianz Group provides more than 60 million customers worldwide with a comprehensive range of services in the areas of property and casualty insurance, life and health insurance, asset management and banking. Bajaj Allianz Life Insurance is in the fields of both life insurance and general insurance. Currently, it has presence in more than 550 locations with over 60,000 insurance consultants. Bajaj Allianz Life Insurance Company is a large private sector life insurance company in terms of number of policies. It has taken the lead amongst private sector life insurance companies in proving its superior management & marketing skills. It has a strong retail focus to become the most profitable private life insurance company. The company announced healthy profits of Rs. 63 crore for the financial year 2006-07. In June 2008, Bajaj Allianz entered into partnership with Thomas Cook India to provide travel finance. Bajaj Allianz Life Insurance ensures excellent insurance and investment solutions by offering customized products, supported by the best technology. TABLE: 3 COMPOUND ANNUAL GROWTH RATE (%) Variables from Financial Statements CAGR (%) of Bajaj Allianz Share Capital 0.16 Fixed Assets 32.91 Current Assets 50.54 Cash and Bank Balances 47.02 Current Liabilities 69.96 Net Working Capital -313.07 5 <http://www.allianzbajaj.co.in>
246 Policy Liabilities 92.52 Total Income 126.08 Premium Income 107.41 Income from Investments 251.82 Other Income 8.05 Profit Before Tax -254.46 Insurance Benefits delivered 256.41 Commission Paid 86.17 Operating Expenses 68.09 FIGURE: 3 300 200 100 0-100 -200-300 -400 CAGR (%) of Bajaj Allianz Share Capital Fixed Assets Current Assets Cash and Bank Balances Current Liabilities Net Working Capital Policy Liabilities Total Income Premium Income Income from Investments Other Income Profit Before Tax Insurance Benefits delivered Commission Paid Operating Expenses Table: 3 shows that the Compound Annual Growth Rates of several variables of the LIC. The CAGR of income form investments of LIC is 251.82% which is good. The growth rate of insurance benefits delivered is also good (256.41%). The growth rates of total income and premium income are considered as not bad. And the corporation s profit before tax and net working capital are showing negative growth rate. The company has been offering various types of policies under various categories. Some of these plans are discussed as under.
247 NEW RISK CARE New Risk Care is a term assurance plan with regular or single premium payment options to secure life at lowest possible cost. Life insurance cover is available at lowest possible price. The policy is non-participating and traditional term assurance plan with additional rider benefits. Premiums are paid annually, half yearly, quarterly and monthly with regular intervals. Maximum age of maturity is 65 years. A lapsed policy can be revived within 2 years from first unpaid premium by paying all due regular premiums along with interest. Surrender value is not available and there is no conversion facility. Accidental death benefit, accidental permanent total or partial disability Benefit, critical illness benefit and hospital cash benefit are attractive features of the plan. INVEST GAIN Invest Gain is specially designed with unique combination of benefits that help insured to develop a sound financial portfolio for his/her family. The plan gives 4 times of life cover at a little extra cost. There is limited payment option is available. Accidental death benefit, disability benefit, critical illness benefit, hospital benefit and family income benefit are additional benefits offered by the company on additional premiums. In case of death or accidental or total permanent disability of insured, all future premiums are waived and 1% of the sum assured is paid monthly, Maturity benefit is in the form sum assured along with accrued bonuses. LIFE TIME CARE ECONOMY Life Time Care Economy is a whole life endowment plan with profits. The sum assured and the bonus is payable only to the beneficiary upon the death of the policyholder. A terminal bonus may be paid on death or survival after age of 80 years. Premiums should be paid for at least 15 years. Accidental permanent, total or partial disability benefit and waiver of premium benefit will be paid at each policy anniversary. The benefits include accidental death cover, disability cover, critical illness cover hospital cash cover and waiver of premium benefits. Premiums are paid yearly, half yearly, quarterly and monthly. Housing loans and general loans are available. A full sum assured and bonus are generally payable as maturity benefits. The survival benefits are not applicable. Full sum assured and bonuses are paid as death benefits. And also accidental and death benefits are additional benefits. FUTURE INCOME GENERATOR Future Income Generator facilitates the investor to save money which will become wealth in future. The plan is an alternative to superannuation and provident funds. The flexible retirement plan helps to policyholder to maintain their lifestyle and create a monthly income that will last him/her all the means to enjoy it. It is a smart saving plan. Financial independence from work is necessary to everybody, so the policyholder need not to worry of income after their retirement. It is a specialized retirement solution for housewives, so that, they become financially independent. Open market option is allowed to purchase an immediate annuity from the company or any other life insurers recognized by IRDA.
248 SWARNA VISHRANTI Swarna Vishranti is a plan, which enables the policyholder to spend life in retirement stage with happiness. There is an option to take a tax-free on lump sum up to 33% of sum assured cum accrued bonuses. Accidental death benefit and disability benefit, critical illness benefit and hospital cash benefit are additional benefits available in this policy. All future premiums are waived and 1% of sum assured is paid monthly in case of death or accidental total permanent, disability of the insured. The additional life insurance protection is available at a nominal cost. Open market option is allowed to purchase an immediate annuity from the company or any other life insurers recognized by IRDA. UNIT GAIN PLUS GOLD Unit Gain Plus Gold is a combination of protection and earning attractive returns by investing in various combinations of securities. High allocations of profits and guaranteed life cover can be possible. The plan has choice of seven investment funds. Additional benefits like accidental death benefit, critical illness benefit, hospital cash benefit, family income benefit and waiver of premium benefit made attractive this policy. 4. BIRLA SUNLIFE INSURANCE COMPANY LIMITED Birla Sunlife Insurance Company Limited (BSLI) is a joint venture between Sunlife Assurance Company of Canada and Aditya Birla Management Corporation limited with shareholdings of 26 percent and 74 percent respectively. 6 The Aditya Birla Group, a US ($28 billion) conglomerate, is one among the largest business houses in India. It enjoys a leadership position in all the sectors in which it operates. It is anchored by a force of 100,000 employees, belonging to 25 nationalities. Its operations are spanned 25 countries across six continents and it is reckoned as India's first multinational corporation. It is headquartered at Mumbai, over 60 per cent of the group's revenue flows from the overseas operations. The Group nurtures a work culture where success is built on learning and innovation. The Group has been adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt, Economic Times and Wall Street Journal Study 2007. Sun Life Financial Inc. is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of 31 March 2008, the Sun Life Financial group of companies had total assets of $ 404.7 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF". The head office of Birla Sunlife is located at Mumbai. It started operations in March 2001 after receiving its registration license from IRDA in January 2001. Within four years of launch, the BSLI has cemented its position as a leading player in the private life insurance industry. The core strategy of the company is to create value for all its stakeholders. It 6 <http://www.birlasunlife.com>
249 launched innovative unit-linked insurance products. It aims at being a leader in product innovations to cater specific customer needs. It has direct sales force of more than 60000 high quality licensed insurance advisors in major cities and towns in India. The BSLI was ranked 18 th among the "TOP 25" in the "Great Places to Work - 2006 Survey". The vision of the Birla Sun Life Insurance Company Limited is to create long term value along with market leadership and mission of the company is to help people mitigate risks of life, accident, health and money at all stages and under all circumstances. Birla Sun Life Insurance has some values of passion, integrity, speed, commitment and seamlessness. With an experience of over 9 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India. It was the first Indian Insurance Company to introduce Free Look Period, which was made as mandatory by IRDA for all other life insurance companies. The BSLI is a pioneer player in introducing Unit Linked Life Insurance plans amongst the private players in India. The BSLI provides insurance, mutual fund, investment and wealth management services. It was the first company which sold its policies through the bancassurance and the internet as well as the first private sector player to introduce pure Term Plans in the Indian market. TABLE: 4 COMPOUND ANNUAL GROWTH RATE (%) Variables from Financial Statements CAGR (%) of Birla Sunlife Share Capital 40.75 Fixed Assets 14.31 Current Assets 54.21 Cash and Bank Balances 59.47 Current Liabilities 51.83 Net Working Capital 43.72 Policy Liabilities 80.96 Total Income 73.37 Premium Income 68.31 Income from Investments 179.16 Other Income 30.61 Profit Before Tax 32.43 Insurance Benefits delivered 72.52
250 Commission Paid 50.5 Operating Expenses 47.09 FIGURE: 4 180 160 140 120 100 80 60 40 20 0 CAGR (%) of Birla Sunlife Share Capital Fixed Assets Current Assets Cash and Bank Balances Current Liabilities Net Working Capital Policy Liabilities Total Income Premium Income Income from Investments Other Income Profit Before Tax Insurance Benefits delivered Commission Paid Operating Expenses Table: 4 shows that the Compound Annual Growth Rates of several variables of the LIC. The CAGR of income from investments of LIC is 179.16%. The growth rate of insurance benefits delivered is recorded as good (72.52%). The growth rates of current assets cash and bank balances and networking capital are also considered as good. The BSLI offers several types of life insurance products, some of them discussed in the following lines BSLI TERM PLAN BSLI Term Plan is designed for people who want to avail of the benefit of life insurance at low cost. It is a low premium, pure risk coverage plan which takes care of investors financial commitment towards their family or dependants if any risk occurred. The entry age starts from 18 years to 55 years. The minimum sum assured is Rs.2,50,000 in case of single premium and Rs.2,00,000 in case of regular premium. The terms of the benefits paid are 5,10,15,20 or 25 years. Frequency of premium payment is annually, semi-annually, quarterly, monthly and also single time payment. There will be grace period of 30 days after the premium due date. There is no maturity benefit. Accidental death and dismemberment rider, critical illness rider and waiver of premium riders, accompanied with this plan whenever the policyholder choose at the time of purchase.
251 BSLI PREMIUM BACK TERM PLAN BSLI Premium Back Term Plan is unique term plan that offers an assurance throughout the specified term and low cost plan. In this plan the entire amount of premium paid over period of time. The total premiums paid back over the term on maturity. Minimum sum assured is Rs.2,00,000. The terms of the policy are 10, 15 and 20years. The eligibility age to enter in to the policy starts from 18 to 50 years for the 20 years term plan and from 18 to 55 years for 10 and 15 years term plan. Maximum maturity age is 70 years. The surrender value is available but it varies with the premium term as well as the policy year in which the plan is surrendered. Frequency of premiums paid is annually semi-annually. Premium shall be paid throughout the benefit period. Investors can choose from eight investment fund options to match their risk and return profile. Switching facility is also available premium allocation percentage into the various investment fund options during the tenure of the policy. The funds are Assure, protector, Builder, enhancer, creator, Magnifier, Maximizer and Multiplier. Death benefit paid is equal to coverage or face amount plus payback amount. Maturity benefit is paid by paying total premiums incase of 100% pay back or more than premiums incase 125% pay back. Accidental death and dismemberment, critical illness and waiver of premium are riders are available to choose. FLEXI SAVE PLUS Flexi Save Plus is one of the endowment plans. It is designed for the insured and his/her family. The plan not only offers the advantages of unit-linked plan and provides the insured an opportunity to make large tax free saving over a period of time. The eligibility age to enter in to the policy starts from 30 days to 60 years. Maximum maturity age is 70 years. Sum assured starts from Rs.2,00,000/- for 70 years old insured, and Rs.1,00,000/- for the rest. Premiums are paid either single time or yearly, half yearly, quarterly and monthly. Range of duration of the policy is 10, 15, 20, 25 or 30 years. Minimum duration of the policy is 6 years for minors and 10 years for all others. And maximum duration is 35 years for minors, 52 years for majors and 30 years for the rest. Policyholders can increase their premiums by paying top-up if he/she has additional savings. The minimum amount of top up is Rs. 5000 and maximum amount of top up is Rs.50,000 or an annual premium, whichever is higher. Insured can choose any investment fund among three investment funds namely Protector, Builder and Enhancer. There is a freedom of switching among the funds. A partial withdrawal from fund value is offered at any time after three years premiums are received by insured. Two partial withdrawals are free of cost in a year. The policy can be surrendered without penalty at any time after four policy years. Guaranteed returns of 3% per annum applies on premiums and top up premiums. The maturity benefit is higher of either fund value or guaranteed fund value. Death benefit is higher of either fund value or guaranteed fund or sum assured less applicable withdrawals. 100% coverage is there in case of death due to accident. The surrender facility is there any time during the tenure of the policy. The surrender charge will be zero after the four policy years. Accidental death and dismemberment riders are available. 15 days of time will be given as free look period, with in which insured return the policy, if he/she is not satisfied with the policy. FLEXI SECURE LIFE RETIREMENT PLAN - II Flexi Secure Life II plan is unit linked non - participating retirement plan which helps to the people who save a little amount every day. It has two options of single premium plan and regular premium plan. It offers benefits to meet insured s specific retirement planning needs.
252 The eligibility age to enter the policy starts from 18 to 65 years. Insured can choose the retirement plan till the vesting age. The minimum sum assured is Rs.55,000 under the single premium plan and Rs.50,000 under the regular premium plan. Insured pays Rs.5,000 as regular premium. In both options he/she can top up their fund with additional savings. The minimum amount of such top up is Rs.10,000. The policyholder can choose any one of the funds among Nourish, Growth and Enrich. He/she may allocate premium in varying proportions amongst available investment fund options to diversify risk. Switching facility is available between the investment fund options. In a year two such types of switches are free of cost. There is an option to purchase an annuity that will provide income throughout life. CHILDREN S DREAM PLAN Children s Dream Plan helps is a long-term unit - linked insurance plan that is specifically designed to provide financial security to the policyholder s child when he/she becomes an adult. It helps to insured to give the financial freedom to his/her children to achieve their dreams. It combines a guaranteed return on savings with upside potential based on the performance of the investment funds. However, the minimum amount will be given with guaranteed benefit at the maturity. The immediate sum assured will be paid to the child even in absence of the insured, unfortunately. The eligibility age to enter into the policy starts from 18 to 60 years. The child must have 13 years old to enter into the policy. The term of maturity ends at 75 years old. The minimum sum assured should be Rs.50,000. Premiums are paid yearly, half-yearly, quarterly and monthly. The policyholder may select any one among the three investment funds of Protector, Builder and Enhancer. FLEXI LIFE LINE PLAN Flexi Life Line Plan is unit - linked, non - participating plan which gives efficient earnings in the long term. The age of eligibility to enter in to the policy starts from 30 to 65 years. The minimum sum assured amount is Rs.5,00,000 for 10 year period to all ages. It is Rs.3,00,000 for minors and Rs.2,00,000 for majors. The maximum maturity age is 70 years for minors and100 years for majors. The premium paying terms are 10, 15, 20 and 25 years. The frequency of premium payment is annually, semi annually, quarterly and monthly. There is a top up facility whenever insured has additional savings during the tenure of the policy. The range of top ups is Rs.5,000 - Rs.50,000. A minimum guaranteed return of 3% per annum applies on premiums. Maturity benefit is higher of either the fund value or the guaranteed fund value. The death benefit is higher of either the fund value or guaranteed fund or sum assured less all applicable partial withdrawals in the 24 months preceding the death of the life insured. Partial withdrawals are allowed after three policy years or on attaining the age of 18 years whichever is later. Two partial withdrawals are free of charge. The policy can be surrendered at any time during the tenure of the policy. The surrender charges will be zero after the 4 th policy year. Insured has the right to return the policy to the company within 15 days from the date of receipt of the policy. The Policyholder may select any one among the three funds available of Protector, Builder and Enhancer. The insured can add up riders to the base plan at a marginal extra cost. Accidental death and dismemberment benefit rider provides 100% of coverage in case of death due to accident, loss of more than one limb or sight in both the eyes, 50% coverage in case of loss of one limb or sight in one eye. Term rider provides additional amount of cover in the event of death of the life insured. Critical illness rider provides coverage in the event of life insured being diagnosed as suffering from any of four illnesses specified. Critical illness plus rider provides
253 a coverage in the event of life insured being diagnosed as suffering from any of specified illnesses. Critical illness woman rider provides coverage against several critical illnesses including woman specific illnesses like pregnancy complications and congenital anomalies. A premium waiver rider waives payment of future premiums on the happening of any of the unforeseen events. 5. ING VYSYA LIFE INSURANCE COMPANY PRIVATE LIMITED ING group originated in 1990 by the merger of Nationale Nederlanden, NV the largest Dutch Insurance Company and NMB Post Bank Groep NV. The newly formed company has been called the Internationale Nederlanden Group, market circles have abbreviated the name to I-N-G. ING Group is a world-class financial conglomerate of Dutch origin offering banking, insurance and asset management. It comprises a broad spectrum of prominent companies that serve their clients in over 40 countries under the ING brand. One such company is the ING Vysya Insurance Company Private Limited, established in September 2001. The equity partners of the company are ING Insurance International B.V (26%), Exide Industries (50%) and other shareholders (24%). The ING Vysya Insurance with its head quarters at Bangalore is present in 229 cities across 251 branch offices. It distributes its products in several parts of the country through its partner s presence. It has issued over 1 million policies by the end of December 2010.It distributes its products through two channels, the Tied Agency Force and the Alternate Channel. The Tied Agent force comprises over 50,000 ING Life Advisors, spread across the country. The Alternate Channels business within ING Life India is a fast growing distribution channel, and includes the Bancassurance partner (ING Vysya Bank), referral Partners, Corporate Agents and Brokers. TABLE: 5 COMPOUND ANNUAL GROWTH RATE (%) Variables from Financial Statements CAGR(%) of ING Vysya Life Share Capital 29.22 Fixed Assets -0.46 Current Assets 33.82 Cash and Bank Balances 26.82 Current Liabilities 44.34 Net Working Capital -227.11 Policy Liabilities 106.24 Total Income 100.68
254 Premium Income 86.21 Income from Investments 212.59 Other Income 18.63 Profit Before Tax 20.14 Insurance Benefits delivered 161.95 Commission Paid 51.97 Operating Expenses 34.81 FIGURE: 5 250 200 150 100 50 0-50 -100-150 -200-250 CAGR(%) of ING Vysya Life Share Capital Fixed Assets Current Assets Cash and Bank Balances Current Liabilities Net Working Capital Policy Liabilities Total Income Premium Income Income from Investments Other Income Profit Before Tax Insurance Benefits delivered Commission Paid Operating Expenses Table: 5 shows that the Compound Annual Growth Rates of several variables of the LIC. The CAGR of income from investments of LIC is 212.59% which is highest. The growth rate of insurance benefits delivered is recorded as good (161.95%). The growth rates of total income and premium income are considered as average. And the corporation s net working capital is showing negative growth rate. Given here is a comprehensive list of various insurance policies & saving plans offered by ING Vysya Life Insurance Company Private Limited.
255 ING TERM LIFE PLUS ING Term Life Plus is a term insurance product with return of premiums. There is a flexibility of surrender the policy. The eligibility age to enter into the policy starts from 18 to 65 years. Maximum maturity age is 75 years. Sum assured starts from Rs. 5 Lakhs. The term of the policy is in between of 10 to 30 years. Three terms are available such as regular, limited and single premium plans. Premiums are paid annually, half- yearly quarterly or monthly. Death benefit is sum assured amount. After completion of half of the policy term, company may return a proportion of the premium that insured has paid. There is flexible surrender value after completion of three regular premium payments. ING NEW BEST YEARS ING New Best Years is a retirement plan gives capital guarantee and provides safety to retirement corpus. In the policy, the policyholder can choose pension payout commencement option, top-up feature and frequency of premium payments. The eligibility age to enter into the policy starts from 20 years to 65 years. The range of vesting age is 45-70 years. Minimum premium amount is Rs. 12,000 and top-up contribution is Rs. 20,000. ING FLEXI LIFE PLUS ING Flexi Life Plus is a unit linked life insurance policy that gives dual benefit of insurance coverage and investment opportunity. 7 It provides flexibility in premium payments either to increase or decrease of regular premiums. The eligibility age to enter into the policy starts from 0 to 60 years. The range of maturity age is 18-70 years. The policy term is available in terms of 10 years and 20 years. Premiums are paid annually, half-yearly, quarterly and monthly. The minimum sum assured is 6.25 times the annualized regular premium. Maximum sum assured amount is 25 times of annualized regular premium. And the minimum top-up amount is Rs. 2000. The accumulate amount of fund will be given as maturity benefit and allowed partial withdrawals. The plan provides an Enhance Accidental Protection Benefit, which is an additional benefit on death due to accident. SAFAL JEEVAN ENDOWMENT PLAN Safal Jeevan Endowment Plan offers comprehensive protection and savings in an easy manner. As title is Safal Jeevan, the policy is a simple life insurance plan gives complete freedom to choose from pre-packaged solutions and decide the time period of premium payment. The eligibility age to enter in to the policy starts from 18 to 45 years. Maximum maturity age is 60 years. Premium payment terms are chosen among 10, 15 and 20 years. Premiums are paid yearly, half yearly, quarterly and monthly. Minimum premium starts from Rs. 2000 per annum. The plan offers death benefit, maturity benefit and in built accident cover. Low premiums, availability of in built accident coverage are major benefits of the scheme. CREATING STAR Creating Star plan gives an opportunity to fulfill the children s needs. It offers to policyholder a systematic and hassle-free way to pre-fund his/her child s education program 7 <http://www.inglife.co.in/productcenter/productcenter-saving-primelife.shtml>
256 by paying premiums regularly and securing the child s education. The eligibility age to enter into the policy starts from 0 to 15 years for life assured and 18 to 50 years for the policyholder. The range of maturity age of life assured is 21-25 years. Premiums are starts from Rs. 48,000/- if it is single premium, Rs.20,000/- if it is limited premiums and Rs.12,000/- if it is regular premium. The premiums are paid yearly, half-yearly, quarterly and monthly. Waiving of premiums in the unfortunate event of parent s death, Education payouts in the last three years of the policy, systematic investment options and partial withdrawal benefits are key benefits of the plan. PRIME LIFE Prime Life is a unique plan with an option of systematic withdrawals, which allows insured to with draw money, when he/she requires it rather than borrow from some others. The plan is unit linked plan that gives insured the unique advantage of savings as well as reaping returns on investment when more than 100% of the initial allocation charges are returned. In the policy, Sum assured increases by 5% every year. The eligibility age to enter in to the policy starts from 10 to 45 years. The range of maturity age is 25-65 years. Yearly Premium starts from Rs.12,000 to Rs.60,000. Insured can increase the premiums with the help of topups when he/she has additional savings. Minimum top up value is Rs.2000/-. The policy terms are available in 15 year and 20 years. Policy term is equal to premium paying term. Premiums are paid yearly, half yearly, quarterly and monthly. Sum assured is fixed which is 5 times of the annualized premium. Sum assured increases every year, option to extend the policy term by 10 years and in built additional accident coverage are key benefit of the policy. HIGH LIFE PLUS High Life Plus is a unit linked insurance plan. It is superlative investment plan that gives insured the opportunity to build his/her wealth through regular systematic investments and additional top ups as per convenience. The plan not only provides protection cover of investor s choice, but also enhances his/her investment opportunities to earn returns with the market. The eligibility age to enter in to the policy starts from 0 to 70 years. Maximum maturity age is 75 years. The terms of premium payment are 3 years to 25 years. Premiums are paid annually, half- yearly, quarterly and monthly. Life coverage is based on choice of investor. Death benefit includes sum assured or fund value and flexible payouts of maturity benefit.
257 TABLE: 6 COMPOUND ANNUAL GROWTH RATE (%) Variables from financial Statements CAGR (%) of LIC CAGR (%) of ICICI CAGR (%) of Bajaj Allianz CAGR (%) of Birla Sunlife CAGR(%) of ING Vysya Life Share Capital 0 18.9 0.16 40.75 29.22 Fixed Assets 16.64 30.25 32.91 14.31-0.46 Current Assets 9.63 41.49 50.54 54.21 33.82 Cash and Bank Balances Current Liabilities 5.37 38 47.02 59.47 26.82 24.44 56.1 69.96 51.83 44.34 Net Capital Working 3.79 77.69-313.07 43.72-227.11 Policy Liabilities 17.41 41.22 92.52 80.96 106.24 Total Income 20.51 86.4 126.08 73.37 100.68 Premium Income 19.13 69.13 107.41 68.31 86.21 Income from Investments 23.24 155.27 251.82 179.16 212.59 Other Income -3.9 17.06 8.05 30.61 18.63 Profit Before Tax 11.44-209.65-254.46 32.43 20.14 Insurance Benefits delivered Commission Paid Operating Expenses 21.26 201.82 256.41 72.52 161.95 16.34 49.3 86.17 50.5 51.97 15.09 46.77 68.09 47.09 34.81
258 FIGURE: 6 300 200 100 0-100 -200 Share Capital Current Assets -300-400 Current Liabilities Policy Liabilities Premium Income Other Income Insurance Benefits delivered Operating Expenses CAGR (%) of LIC CAGR (%) of ICICI CAGR (%) of Bajaj Allianz CAGR (%) of Birla Sunlife CAGR(%) of ING Vysya Life Table 6 shows that the combined financial performance of five life insurance companies in terms of compound annual growth rates of the variables. CONCLUSION LIC is a public sector life insurance Company, which is taken as one of the sample companies. Although it is big public sector company, in the past a decade period it is lagging behind in some of the financial aspects. The reason is the company has been facing the tough competetion from private sector life insurance companies. The market share of LIC has decreased gradually. The financial performance of other private life insurance companies is also good in some aspects.