CHAPTER – I RESEARCH PROBLEM AND PURPOSE COMPANY PROFILE : IDBI Fortis Life Insurance Co Ltd, is a joint venture between three leading financial conglomerates – India’s premier development and commercial bank, IDBI, India’s leading private sector bank, Federal Bank and Europe’s premier Bancassurer, Fortis, each of which enjoys a significant status in their respective business segments. In this venture, IDBI owns 48% equity while Federal Bank and Fortis own 26% equity each.
IDBI Fortis launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory Development Authority (IRDA).
Today, we offer our services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. At IDBI Fortis we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers.
About our Heritage IDBI Bank Ltd. continues to be, since its inception, India’s premier industrial development bank. Created in 1956 to support India’s industrial backbone, IDBI Bank has since evolved into a powerhouse of industrial and retail finance. Today, it is amongst India’s foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from over 538 branches and more than 921 ATMs.
The Bank offers its customers an extensive range of diversified services including project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in India’s financial sector – such as the Securities and Exchange Board of
India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd. Please visit www. idbibank. com to know more. Federal Bank is one of India’s leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 600 branches and 600 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network.
The Bank operates on the core banking platform and is RTGS/ NEFT enabled through which it offers state-of-the-art technology enabled products and services. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations. Please visit www. federalbank. co. in to know more.
Fortis is an international insurance group composed of Insurance Belgium, a leader in life and non-life insurance in Belgium distributing its insurance products through the network of Fortis Bank and independent insurance brokers and Insurance International with subsidiaries in the UK, France, Hong Kong, Luxembourg (Non-life), Germany, Turkey, Russia and Ukraine, and joint ventures in Luxembourg (Life), Portugal, China, Malaysia, Thailand and India. With great delight, I present before you IDBI Fortis Life Insurance Co Ltd, a company committed to bringing you products that help realise your unique dreams and aspirations.
Everyone has life goals but you need a reliable partner to work with in making a secured plan that can achieve those goals. IDBI Fortis will offer innovative solutions that meet your protection, savings and investment needs. The insurance proposition offered by IDBI Fortis will help you meet all of your personal goals whether it is to educate your child, build or manage wealth, establish a retirement fund or gain protection against medical costs. IDBI Fortis comes with impeccable parentage, being the result of the coming together of three financial giants: IDBI Bank, Federal Bank and Fortis.
IDBI Bank, India’s premier development and commercial bank, has been instrumental in sponsoring the development of key national institutions in the financial sector including the Securities and Exchange Board of India (SEBI), National Stock Exchange of India Ltd (NSE) and National Securities Depository Ltd (NSDL). Today, it ranks amongst India’s foremost commercial banks, with a wide range of innovative products and services, serving retail as well as corporate customers in all corners of the country.
Its offerings such as IDBI Flexibonds and Suvidha deposits have attracted unparalleled response demonstrating utmost customer confidence. Federal Bank, one of India’s leading private sector banks, has a dominant presence in the state of Kerala along with a strong network across the rest of India. The bank serves over four million retail customers with a full complement of financial products and is known for its deeply rooted customer relationships both amongst resident and non-resident Indians. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network.
Fortis, a European financial services provider engaged in banking and insurance with a presence in over 50 countries, offers its personal, business and institutional customers a comprehensive package of products and services through its own channels, in collaboration with intermediaries and through other distribution partners. With the recent acquisition of ABN Amro Bank as part of a consortium, Fortis ranks among the largest financial institutions in Europe. Fortis also has insurance joint ventures in several countries of Europe as well as Asia.
IDBI Fortis is dedicated to building on the rich traditions of its founding companies to deliver products and services that suit your financial needs in a clear, transparent and cost-effective manner. Vision and Values Vision To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our customers and adds value to their lives. Mission To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner.
To be transparent in the way we deal with our customers and to act with integrity. To invest and build quality human capital in order to achieve our mission. Values [pic] Transparency: Crystal Clear communication to our partners and stakeholders [pic] Value to Customers: A product and service offering in which customers perceive value [pic] Rock Solid and Delivery on Promise: This translates into being financially strong, operationally robust and having clarity in claims [pic] Customer-friendly: Advice and support in working with customers and partners pic] Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders and the community at large INDUSTRY PROFILE The concept of insurance probably began in China over five thousand years ago. Others will argue that insurance began slightly later, in Babylonia. In any case, ancient peoples were interested in protecting against loss. They devised insurance systems to protect the investments underpinning trade efforts, particularly with respect to goods shipped across the seas. It was enturies after the first “insurance policies” were drafted in efforts to aid commerce, that the concept of life insurance took hold in ancient Rome. The ancient Romans believed that anyone who was wrongly buried would become “an unhappy ghost. ” This idea of a “forlorn and shivering spirit in an agony of loneliness” so bothered the Romans that they tended to invest large sums in elaborate burials. Although the belief in the importance of “correct” burial reached through all levels of society, resources did not. Roman society suffered a rather large gap between the rich and the poor.
Those on the lower socioeconomic strata, including many soldiers, lacked the requisite resources for a proper Roman burial. These factors led to the creation of burial clubs. Groups of individuals formed and all members were required to regularly donate to a common fund that was used in the event of a member’s death to fund his funeral. A Roman military leader, Marius, created a burial club among his troops in approximately 100 B. C. and many similar organizations came into being in this era. Eventually, the practice grew to include providing a stipend to the survivors of the deceased.
The Roman burial clubs represent the beginning of life insurance as we know it. A group of people enters into a voluntary agreement to pay premiums that are used to provide benefits to any paying member of the group who happens to die. Stripped to its essence, life insurance today, in all of its complexity and with all of its variations, still bears a remarkable resemblance to the burial clubs of ancient Rome. The idea of the Roman burial club was compelling then. The Roman government was not fond of organizations of any sort forming-perceiving them as potential breeding grounds for challengers to the power structure.
The burial clubs, however, were allowed to exist. The sensibility of their plan was obvious even to tyrants. Today we may be more concerned with providing replacement income for the family of the deceased than we are about funerary expenses. We also tend to worry considerably less about whether or not a funeral might produce a forlorn or shivering ghost. We still do, however, embrace the principle that the financial strength of many, when combined, can produce necessary results for others in difficult times. Life insurance continues today because those underlying principles remain unchanged.
We don’t often see ourselves as being akin to Roman legionnaires marching into battle, but those of us who pay our life insurance premiums in an effort to protect ourselves and our family from expense and difficulty do share a common trait with the ancients who invented life insurance in the form of burial clubs. LIFE INSURANCE MARKET The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population.
The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premium of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, with regard to state owned LIC’s new premium business has fallen.
Innovative products, smart marketing and aggressive distribution. That’s the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers is evidenced in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies.
But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1. lakh to Rs 1. 2 lakh- way bigger than the industry average. Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans. No doubt the aggressive stance of private insurers is already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new customers. The introduction of private players in the industry has added colours to the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC.
Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in the sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining in its career. The market share was distributed among the private players. Though LIC still holds 75% of the insurance sector the upcoming nature of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95%(2002-03) to 81% (2004-05). The following company holds the rest of the market share of the insurance industry
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) M I S S I O N To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. Duties,Powers and Functions of IRDA Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA.. (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. 2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, – (a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) specifying the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; Introduction The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population.
The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed For the purpose of this study, the research has been done for the analysis of various Products offered by the new co. idbi fortis, which is trying to establish its footprints in the industry . the various products of the co. has been analysed one by one in the given study also their comparison is made on the basis of similar parameters.
The primary study is done through the mode of the questionnaires, which deals with the study of consumer perception about the insurance industry with the special reference to idbi fortis life insurance co. ltd. The various products analysed are: WEALTHSURANCE The Wealthsurance Foundation Plan enables the customer to save and build wealth to meet your financial goals. However, unlike other investment alternatives, it also enables him to achieve his wealth goals even in the event of unexpected death, accidents, disablement or serious illness. HOMESURANCE
The Homesurance Protection Plan is a reducing term plan, which provides insurance cover equal to the outstanding balance of your home loan. BONDSURANCE Bondsurance is a single premium plan which allows you to make a one-time investment and get a guaranteed amount on maturity. RETIRESURANCE Retiresurance is a pension plan without life cover that allows a longer policy term so that the customer’s investments can get the benefit of compounding. SCOPE OF THE STUDY 1) The study is limited to the Delhi region. 2) The study will help in knowing the various products in Idbi Fortis. ) The study will help in serving the investor efficiently. 4) The study will also help in knowing the risk factors involved in various insurance plans. OBJECTIVES OF THE STUDY • To study the product of Idbi Fortis in detail. • To make comparitive analysis of the various products offered by the company on the basis of similar parameters. • To study the investors perception for Idbi fortis and its products. • To find out strengths and weaknesses of the company. • To make recommendations to overcome weaknesses and grab major market share.
CHAPTER – Ii REVIEW OF LITERATURE SELECTION OF RIGHT PRODUCT Almost all the insurance companies offer what is called an “illustration” to customers the illustration is designed to help the customer understand the policy values better. From a customer point of view, it is imperative that each customer understands and is able to determine the benefits of the product. Given the long-term nature of the Life Insurance contract, it is important to look at the profile of the life insurance company that is underwriting the risk.
Given that all the private sector insurance players are new to the business, it would help to look at the past record of the foreign partner in the joint venture and the ability of the Indian partner to continue to infuse capital, given the capital-intensive nature of the business. Again,it is very simple to compare the product with other company products because almost all insurers have their web portals with their product details. Even cost comparisons can be made through premium calculators. What is needed most is the guaranteed return and wider risk coverage.
Riders are very economical and one should always choose the desired riders along with the basic life insurance policy. FEW PROMINENT REASONS OF FAILURE A) Lapsation of policy: It can happen that due to certain circumstances you forget to pay your premiums, even in the specified grace period. Unfortunately, because you have missed the deadline your policy will lapse. Consequently, your insurance company can stop covering you or may provide you reduced insurance coverage equivalent to the total premiums paid formerly (also called paid-up policies).
Nonetheless, a lapsed policy may be renewed in some plans, although the exact renewal procedure varies among different insurers. Revival of policy is not simple. Other than payment of interest the life insured has to undergo the medical examination and accordingly the policy terms may be revised. B) Cash Surrender Value: Permanent life insurance policies like universal life insurance, whole life insurance and variable life insurance are more attractive because of the presence of built-in cash value. Term life insurance policies do not offer cash values.
The interesting aspect of these policies is that you can surrender your policy and get the accrued cash value in your hands provided you have a substantial amount of cash value. Cash Value is a part of your premium is put in savings or another investment account according to the type of policy you purchase. As a result, the ongoing interest you receive from your investment account gradually increases your cash value. C). Surrender: It is always easy to terminate (surrender) your policy and get the entire cash surrender value, which will solve your liquidity problems.
However, you need to consider many factors before surrendering your policy, such as the increase in the cash surrender value if your policy is maintained for the full term. Consult your insurance advisor to about the full consequences of these issues before deciding whether the policy should be cashed or kept. D) Policy Loan: Another positive characteristic of a life insurance policy is that you can take out a policy loan against your policy to cater to your emergency needs. The interest is relatively low and the policy loan can be repaid in a lump sum or installments.
If you are incapable of repaying your policy loan, your insurance company will use your cash value to settle the loan. . CHAPTER – iiI current scenario CURRENT SCENARIO ? India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the arket. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. ? Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. Computerisation of operations and updating of technology has become imperative in the current scenario.
Foreign players are bringing in international best practices in service through use of latest technologies ? The insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. At present the distribution channels that are available in the market are listed below. • Direct selling( • Corporate agents • Group selling( • Brokers and cooperative societies Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional moneyback policies, which is not considered very appropriate for long-term protection and savings. There is lots of saving and investment plans in the market. However, there are still some key new products yet to be introduced – e. g. ealth products. Table showing Premium collection by various Insurance companies: |First Year Premium of Life Insures for 2008-2009 (In crores) | |Rank |Insurer |Upto March,09 |Upto March,08 |% Growth | |1 |ICICI Prudential |6812. 52 |8305. 84 |-17. 98% | |2 |SBI Life |5386. 46 |4792. 86 |12. 9% | |3 |Bajaj Allianz |4491. 63 |6491. 72 |-30. 81% | |4 |Reliance Life |3514. 06 |2752. 76 |27. 66% | |5 |Birla Sunlife |2823. 91 |1965. 01 |43. 71% | |6 |HDFC Standard |2644. 03 |2679. 61 |-1. 33% | |7 |Max New York |1843. 1 |1594. 21 |15. 65% | |8 |Kotak Mahindra Old Mutual |1343. 03 |1106. 62 |21. 36% | |9 |Met Life |1145. 63 |826. 79 |38. 56% | |10 |Tata AIG |1142. 45 |967. 78 |18. 05% | |11 |Aviva |723. 66 |1059. 08 |-31. 7% | |12 |ING Vysya |688. 17 |704. 67 |-2. 34% | |13 |IDBI Fortis Life |316. 78 |11. 90 |2560. 95% | |14 |Shriram Life |313. 17 |309. 87 |1. 06% | |15 |Canara HSBC OBC Life |298. 74 |0. 00 |0. 00% | |16 |Bharti Axa Life |292. 8 |113. 11 |158. 66% | |17 |Future Generali Life |152. 44 |2. 50 |6007. 85% | |18 |Sahara Life |134. 38 |122. 17 |10. 00% | |19 |Star Uion Dai-ichi @ |51. 75 |0. 00 |0. 00% | |20 |Aegon Religare |31. 21 |0. 00 |0. 0% | |21 |DLF Pramerica # |3. 39 |0. 00 |0. 00% | | |Private Total |34153. 71 |33806. 50 |1. 03% | | |LIC |52953. 92 |59182. 20 |-10. 52% | | |Grand Total |87107. 62 |92988. 71 |-6. 32% | Note: 1. Cumulative premium / No. f policies upto the month is net of cancellations which may occur. 2. Compiled on the basis of data submitted by the insurance companies 3. # Started operations in September, 2008 4. @ Started operations in February, 2009 . CHAPTER – Iv RESEARCH METHODOLOGY Research can be defined as an endeavor to discover facts through investigation and studies. It is also known as systematized effort to gain new knowledge. METHOD OF DATA COLLECTION 1. PRIMARY DATA: The relevant information has been generated from the medium of interviews. Interview had been very helpful in analyzing the information collected from secondary data.
The data was collected through questionnaires, which consisted a mix of open ended & close ended questions. The respondents belonging to the various categories filled the questionnaires like: PROFESSIONALS BUSINESSMANS HOUSEWIFES JOB HOLDERS 2. SECONDARY DATA: Secondary data represents information that already exists somewhere, having been collected for other purpose. The Secondary data sources that come to be utilized by me are: INTERNAL SOURCE: a. In house magazines b. Corporate magazines (eg. Business baron times etc. ) c. Newspapers (economic times , times of india)
EXTERNAL SOURCE: a. IDBI Fortis life insurance company b. Company broachers c. Faculty guide d. Training guide e. Internet service SAMPLING SAMPLE UNIVERSE : Here the universe of the study is all the salaried people of different age group in India SAMPLE SIZE : The size of the sample was around 100 people considering the time constraint. SAMPLE CONSISTS : 1. EMPLOYEES 2. PROFESSIONALS 3. BUSINESSMEN SAMPLE LOCATION : Here the locale of the study is all the people working and living in Delhi & NCR. It is restricted to Delhi only because of time & resource constraints.
SAMPLING METHOD : The sampling design adopted is a non – probability sampling and the procedure followed is convenience sampling. RESEARCH DESIGN The formidable that follows the task of defining the research problem is the preparation of the design of the research project, popularily known as the research design. decisions regarding what, where,how much concerning an enquiry or a research constitute a research design. It is an arrangementof condition for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy procedure. 1. DESCRIPTIVE RESEARCH:
It includes surveys and fact finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. The main chahracteristicsof this method are that the researcher has no control over the variables; he can only report what has happened or what is happening. 2. QUALITATIVE RESEARCH: Qualitative research is concerned with qualitative phenomenon , relating to or involving quality or kind. Qualitative research seeks out the ‘why’, not the ‘how’ of its topic through the analysis of unstructured information – things like interview transcripts and recordings. INSTRUMENTS
A. QUESTIONNAIRE Questionnaire is designed with a view to collect the requisite primary information. It is the list of questions formed so as to get the facts. Type of questionnaire : A structured questionnaire, the questioners which was adopted was a formal structure questionnaire to acquire the information. B. INTERVIEWS Interview is a purposeful conversation between the interviewer and respondent aimed at eliciting certain information from the latter. ANALYTICAL TOOLS Researcher has selected Percentage as a statistical measure by which the collected data has been treated. TECHNOLOGICAL TOOLS A. MICROSOFT WORD 2007
B. MICROSOFT EXCEL 2007 STATISTICAL TOOL Since the research is also a QUALITATIVE RESEARCH. Therefore the statistical tool used is SWOT ANALYSIS which depicts STRENGHTS , WEAKNESSES, OPPORTUNITIES & THREATS of the organisation. PRODUCT RANGE OF IDBI FORTIS IDBI Fortis offers a variety of products targeting every customer right from a 3 month child to a 70 year senior citizen. All the products have been classified majorly under four plans namely . Wealthsurance . Homesurance . Bondsurance . Retiresurance WEALTHSURANCE The Wealthsurance Foundation Plan enables the customer to save and build wealth to meet your financial goals.
However, unlike other investment alternatives, it also enables him to achieve his wealth goals even in the event of unexpected death, accidents, disablement or serious illness. The Wealthsurance Foundation Plan can ensure that his plans for wealth creation are achieved by protecting that plan with insurance benefits. HOMESURANCE The Homesurance Protection Plan is a reducing term plan, which provides insurance cover equal to the outstanding balance of your home loan. In the unfortunate event of death of the home loan borrower, the insurance cover enables repayment of the home loan liability.
BONDSURANCE Bondsurance is a single premium plan which allows you to make a one-time investment and get a guaranteed amount on maturity. You can choose a maturity period of 5 or 10 years for your investment. At the end of the chosen period, you will receive a guaranteed maturity amount. Besides the guaranteed maturity amount, Bondsurance also provides a life insurance cover. In case of death before the maturity date, a Death Benefit which is also guaranteed will be paid. Thus you can get life insurance cover, while earning an assured return on your investment. RETIRESURANCE
Retiresurance is a pension plan without life cover that allows a longer policy term so that the customer’s investments can get the benefit of compounding. The customer has to choose any vesting age between 40-75 yrs. The vesting age chosen can also be postponed or preponed within the above range by informing the company 30 days in advance. It is especially for people who wish to lead a happy and prosperous after retirement. WEALTHSURANCE What is Wealthsurance ? Wealthsurance combines wealth creation and insurance protection into one powerful financial solution.
Unlike other investment alternatives, it allows investor to ensure that his goals of wealth creation are achieved even in the event of serious illness, accidents. 1. Wealthsurance is a comprehensive investment Solution: Wealthsurance is designed to be an investment solution. It offers a full range of investment choices similar in features to those you are already familiar with such as bank deposits, bonds, post office schemes or mutual funds. The investment options are designed to meet the needs of all types of investors, whether cautious or risk taking.
So whenever you are looking to make an investment, think about investing in Wealthsurance. 2. Wealthsurance is a wealth-management account: Wealthsurance is indeed a wealth-management solution. You can make a single investment or regular contributions. You can even manage most of your financial savings in it by choosing an appropriate mix of investment options. Think about the convenience of managing your entire portfolio in a single account and watch your wealth grow over time. 3. Wealthsurance is for those who will live: Life insurance is sometimes thought of as for those who might die, but
Wealthsurance is for those who will live. While it provides benefits upon death, Wealthsurance is also designed to offer a whole package of living benefits. You can get benefits on terminal illness, major diseases, hospitalization and disablement so you are well cared for in the event of a health crisis or accident. 4. Wealthsurance is a tax-free wealth-builder account: In Wealthsurance, you can build wealth free of income tax. Not only do you get tax benefits on your contributions, but all the returns you earn on your investments and the benefits you receive are tax-free.
You can also switch amongst investment options without incidence of any tax. In essence, Wealthsurance is a tax-free wealth management account. 5. Wealthsurance is a long-term plan with short term liquidity: Wealthsurance allows you to build wealth over the long-term, but it also gives you the ability to withdraw your money when needed, after completion of three years from the commencement of the plan. With Wealthsurance you can achieve medium as well as long-term financial goals. 6. Wealthsurance meets your changing needs: Wealthsurance is designed to meet your investment and insurance needs even as they change over time.
You may not need another plan because you will be able to increase, decrease or manage the wealth-building and insurance benefits as you desire. 7. Wealthsurance is different from traditional insurance: Wealthsurance is not like traditional life insurance you might know. It is an investment plan focused on wealth creation and living benefits. Sometimes people think that they only need a limited amount of life insurance. But as long as you have financial goals and you wish to build and manage wealth, or desire living benefits in your own lifetime, you will find Wealthsurance useful. 8. Wealthsurance has as many options as you need:
Wealthsurance gives you multiple options because we want to meet your specific needs. At the same time we have made it easy for you to choose by developing Ready Plans to meet the typical needs of customers. Quite likely there is a Ready Plan that meets your needs. But if you wish, you can build a Custom Plan to suit your own circumstances 9. Wealth Plan can be insured against unforeseen events Wealthsurance can protect investor Wealth Plan against a range of events such as death, terminal illness, 17 major diseases, sickness requiring hospitalisation, serious accidental injuries or total and permanent disablement.
With other investment products, if any such event happens, invest or may not be able to save as planned or even be forced to withdraw from his savings. But in Wealthsurance, these benefits allow him to meet additional expenses without affecting his fund value so that his plans to save and accumulate wealth are not affected even if life throws surprises. Wealthsurance IS DIVIDED INTO TWO ACCOUNTS: Wealthsurance gives you (a) Investment Account and (b) Insurance Account. Investor Investment Account From the premiums investor pay, Premium Allocation Charge is deducted.
The balance amount goes into the investment options he choose in the proportion he specify. IDBI Fortis Investment Basket contains all the investment options it offer. The balance in your Investment Account reflects the wealth built over time from investor premium contributions and the returns from the investment options chosen by him. Investor Insurance Account Investor can also choose any of the insurance benefits offer under IDBI Fortis InsuranceBasket. He can pay for only those benefits he choose and the charges are deducted from his Investment Account. PAY PREMIUM IN A FLEXIBLE MANNER Types of premiums ) Basic premiums -when investor choose wealthsurance plan ,he has to indicate the premiums he wish to contribute. there are 2 types of basic premiums: 1) Single premium-In this one time payment is done. Minimum amount is 20,000. 2) Regular premium-The minimum Regular Premium amount is Rs 10,000 per year. There is no maximum limit. Payment Frequency: You can choose the intervals, which can be monthly, quarterly, half-yearly or yearly. The minimum Regular Premium in the monthly mode is Rs. 1,000. Premium Payment Term: Investor can choose the period for which you wish to pay the Regular Premium. It should be a minimum of 3 years. ) Top-up Premiums Over and above the Basic Premiums, an investor can also pay additional premiums. These are called Top-up Premiums. He can pay Top-up Premiums at anytime during the period you are contributing Basic Premiums or thereafter until the maturity of the Plan. The minimum Top-up Premium you can pay at any onetime is Rs 5,000. He can pay Top-up Premiums only when he has paid all the Basic Premiums that are due till the date. Premium allocation charges : Premium allocation charges is deducted from the premiums we pay and the balance amount is invested in the investment options of our choice.
Single and Top-up premiums | Amount of single or top-up premium | Premium allocation charges | | Rs 20,000-Rs 49,999 | 1. 5% | | Rs 50,000-Rs 99,999 | 1% | | Rs 100,000-Rs 2,49,999 | 0. % | | Rs 2,50,000 and above | Nil | Regular premium | Amount of regular premium (per year)| | | |Premium payment term | | | 3-4 | 5-9 | 10-14 | 15-19 | 20 & more | |Rs. 0,000-Rs. 29,999 | 4% | 3. 75% |3. 5% | 3. 25% | 3 % | |Rs. 30,000-Rs. 47,999 | 3. 75% | 3. 5% |3. 25% | 3% | 2. 75% | | Rs. 48000-Rs 71,999 | 3. 5% | 3. 25% |3% |2. 75% |2. 5% | | Rs 72,000-Rs. 95,999 |3. 25% |3% |2. 75% |2. 5% |2. 5% | | Rs 96,000-Rs 2,39,999 |3% |2. 75% |2. 5% |2. 25% |2% | | Rs2,40,000-Rs 5,99,999 |2. 75% |2. 5% |2. 25% |2% |1. 75% | |Rs 6,00,000 & above |2. 5% |2. 25% |2% |1. 75% |1. 5% | INVESTMENT BASKET The power of wealthsurance is provided by the wide choice of investment option it offers. They give you great flexibility in how you build and manage wealth.
The full range of investments we offer is called the Idbi investment Basket. [pic] Wealth Creation by Design These investment options are designed to meet the needs of all types of investors and are offered in the InvestmentBasket. They are easy to understand and similar in features to familiar investments such as bank deposits, bonds, post office schemes or mutual funds. What’s more, with Wealthsurance, you get tax benefits on your contributions, returns and benefits. In effect, Wealthsurance is a tax-free wealth management account because all the money you put into it grows without any tax .
A well-structured plan to build wealth To suit our unique needs to create and manage our plan to build wealth, the IDBI Fortis InvestmentBasket offers five types of investment options: | Investment option | Preferred by the type of investor | |Monthly Interest Account Gives monthly interest on account |For conservative investors looking for assured returns | |balance. | | |Guaranteed Return Fund –Funds give fixed rate of return or a | | |specified period | | |Capital Guaranteed Fund-Give returns linked to equity markets, |For those willing to take some risk but with capital protection | |but with no fear of loss of principal | | |Market Linked Funds -Funds that invest in bonds, equities and |For those wishing to take full risk and enjoy full rewards of the| |money market that give returns linked to market performance |market | |Asset Allocator Funds -Fund of Funds that invest in all our |For those who wish to leave it all to us to manage their money | |investment options with asset allocation managed by our fund | | |managers | | A. Monthly Interest Account Monthly Interest Account gives you fixed interest on the account balance. You can choose to deposit any proportion or all of your premiums into it, whether regular or Top-up Premiums. Your Account will earn interest at the declared rate on the daily outstanding balance.
The balance in your Account, consisting of premiums deposited and interest earned, is available to switch into any other investment option and for withdrawals as permitted. Interest Rate: At the beginning of each month, IDBI Fortis will declare a credit rate by way of interest for this Account. The interest rate will be declared out of the estimated income from the underlying segregated portfolio of investments after (a) appropriation of fund management charge of 1%, and (b) transfers to/from a smoothing reserve. Your account balance will grow each day at the declared interest rate. Rates declared for the Account are available at www. idbifortis. om The purpose of Monthly Interest Account is to provide a smoothed return to the investors from out of the investment income of the underlying portfolio. For this purpose, a reserve for smoothing of interest rate will be maintained. Investment Pattern: The Monthly Interest Account is a segregated fund which will invest 100 of the money in fixed income investments including government securities, treasury bills, bank deposits, certificates of deposit, corporate securities, commercial paper, securitised papers, structured products, money market instruments, etc. The fund may use derivatives to meet its objective to the extent permitted by the applicable guidelines B. Guaranteed Return Funds
Guaranteed Return Funds give you an assured, fixed return for a specified period. Each fund matures on a specified date and carries a minimum Guaranteed Maturity Value for each unit. Each fund is available for investment for a limited period after the opening date during which units are allotted at the Net Asset Value. Upon maturity of the fund, you will receive the Net Asset Value as on the maturity date or the Guaranteed Maturity Value for the units you hold, whichever is higher. Available Funds: The available funds and the guaranteed maturity value for each unit that they carry are declared by us from time to time. You can select a fund from those available at the time you pay the premium.
You can also switch into them when they are available. The available funds are given at www. idbifortis. com Liquidity: Guaranteed Return Funds mature on the specified date. However, if you wish, you can redeem them before maturity at the Net Asset Value and the guarantee will not apply. Investment Objective: Guaranteed Return Funds are segregated closed-ended funds with specific maturity date and a minimum guaranteed maturity value per unit. They aim to generate a fixed return by investing in fixed income instruments with maturities close to the maturity date of the fund and follow a buy-and-hold strategy. Investment Pattern: These funds invest up to 00% of the moneys in fixed income investments including government securities, treasury bills, bank deposits, certificates of deposit, corporate securities, commercial paper, securitised papers, structured products and money market instruments. The fund may use derivatives to meet its objective to the extent permitted by the applicable guidelines. Fund Management Charge: A fund management charge of 1. 5% p. a. will be appropriated while computing the Net Asset Value of the Guaranteed Return Funds Capital Guaranteed Options: You can invest in stocks without losing the principal C. Capital Guaranteed Funds Capital Guaranteed Funds guarantee the return of at least the face value of each unit on the specified maturity date.
Returns are, however, not guaranteed and depend upon the performance of the equity portfolio of the fund and the stock market. Available Funds: Capital Guaranteed Funds are segregated closedended funds with specified maturity date. Each fund is available for investment for a limited period after the opening date during which units are allotted at the Net Asset Value. Upon maturity, you receive the Net Asset Value as on the maturity date or the face value of each unit you hold, whichever is higher. The available funds are declared by IDBI Fortis from time to time. You can select a Capital Guaranteed Fund from those available at the time you pay the premium. You can also switch into them when they are available.
Investment Strategy: Capital Guaranteed Funds are managed using capital protection techniques including portfolio insurance strategies and manage the exposure to equity and debt with a view to obtaining equity exposure consistent with capital protection and the guaranteed maturity value. Investment Pattern: Capital Guaranteed Funds will manage exposure to fixed income investments and equities as stated below: Range of Debt exposure: 40%-100% Range of Equity exposure: 0-60% Liquidity: Capital Guaranteed Funds mature on the specified date. However, if you wish you can also redeem them before maturity at the Net Asset Value, but the guarantee will not apply. Fund Management Charge:The funds carry a fund management charge of 2. 25% p. a. which is applied before computing the Net Asset Value.
Market Fund options: For investing in stocks,bonds or money market Market Linked fundsare similar to mutual funds. They are open –ended funds which invest in equity,debt or money market as per their objectives. The Net Asset Value (NAV) of each fund is published on a daily basis. Investor can invest his premiums into,swith out of any fund at any time at the NAV. His gain/loss is the difference between the value at which he invested and the value at which he exited. In market linked funds,the NAV depends on the market value of the underlyind investments. The expected return and risk vary by the fund. There are following funds in the market fund : FUND |INVESTMENT OBJECTIVE |INVESTMENT PATTERN |ALLOCATION | |Equity Growth Fund |Invest in stocks and aims to | Fixed income |0-50% | | |generate high returns by picking|investments including cash and |50-100% | | |stocks that have growth |money market Equities and Equity| | | |prospects. |–linked Instruments. | | |Nifty Index Fund |It invest in Nifty Stocks and | Fixed income |0-20% | | |aims to track the index as |investments including cash and |80-100% | | |closely as possible. |money market Equities and Equity| | | | |–linked Instruments. | |Bond Fund |Invest in Fixed income |Fixed income investments |100% | | |investments and aims to |including cash and money market | | | |genearate returns from interest | | | | |coupans and the opportunities in| | | | |changing yield curve. | | | |Income Fund |Aims to generate a return by |Fixed income investments |100% | | |seeking to invest in fixed |including cash and money market | | | |income investments. | | |Liquid Fund |Invest in overnight money and |Money market,cash and short |100% | | |other money market instruments. |–term Debt. | | Asset Allocator Funds Invest in stocks,bonds,or money market,dependind upon their view on the markets . Funds are managed based on risk preference of investor. He can choose amongst three risk levels : cautious,moderate and aggressive. The equity component is restricted ,based on the risk profile chosen by investor. Equity component may go up to 25 % in cautious,50% in moderate,and 100% in aggressive. Insurance Basket [pic] Characteristics of IDBI Fortis InsuranceBasket ™ IDBI Fortis InsuranceBasket is designed to offer Protection for wealth plans so that investor wealth-building efforts are unaffected by unforeseen events • Protection of loan liabilities so that debt does not become a burden when life throws surprises • A whole package of Living Benefits so that you are well cared for in the event of health crises, accidents or disablement ™ Life Insurance and Terminal Illness Benefit • Flexibility to choose the amount of life cover • Accelerated payment of benefit in the event of terminal illness ™ Major Diseases Benefit in the event of diagnosis of any of 17 specified diseases • 17 major diseases, conditions and medical procedures covered • Lump sum cash benefit paid upon doctor’s diagnosis or undergoing of the medical procedure Hospital Cash Benefit in the event of hospitalisation • Daily Cash Benefit paid for each day of hospitalization beyond two days • Recovery Benefit paid for hospital stays of longer than five days ™ Accidental Death and Disablement Benefit to cover risk of accidents • Additional benefit upon death due to accident • Benefits paid in the event of permanent disablement due to bodily injury ™ Waiver of Premium Benefit in the event of death or total and permanent disablement • Ensures that your saving plans are realised even in the event of death or total and permanent disablement • Premiums can be waived in the event of death • Premiums can be waived in the event of total and permanent disablement Flexibility to manage your insurance benefits • Add or remove optional insurance benefits to suit your needs • Increase or decrease the amount of benefits • Pay only for the benefits you choose IDBI Fortis InsuranceBasket: Get Living Benefits and protect your plans With below benefits, one can ensure that: • His family is not affected financially and his financial goals are still met in the event of death or accident • He is protected against high medical expenses and loss of earning capacity in the event he suffer a serious illness, undergo hospitalisation or become disabled. Types of insurance benefits offered The following benefits are offered in the IDBI Fortis InsuranceBasket: Life and Terminal Illness |Life and Terminal Illness Benefit: | |Insurance | | | |(a) | | |Death Benefit is paid under Wealthsurance in the event of Death of the Insured Person, or | | | | | |(b) | | |Diagnosis of terminal illness where the Insured Person is expected to live for not more than six months. | | | |Health Insurance |We offer two Health Benefits as optional Riders: | | | | | |(a) | | |Major Diseases Benefit: If the Insured Person is diagnosed with any of the 17 specified major diseases, a lump | | |sum cash amount is paid as benefit. | | | | | |(b) | | |Hospital Cash Benefit: At times you may require hospitalisation due to an illness or accidents. Hospitalisation| | |can be a huge drain on your finances, which can affect your wealth creation plan. The Hospital Cash Benefit can| | |help you ease your hospitalisation expenses burden.
The Hospital Cash Benefit rider gives you a daily allowance| | |for each day of hospitalisation and a higher allowance is given if the treatment requires you to be admitted to| | |an Intensive Care Unit (I. C. U. ). To further assist in your recovery, an additional recovery allowance is also | | |given for two days, provided that you had been admitted to a hospital for more than five days. | | | | | | | | |These benefits are payable even if benefits are received under other medical schemes or insurance plans. | | | |Accident and Disablement |We offer two Accident and Disablement Benefits as optional Riders: | |Insurance | | | |(a) | | |Accidental Death Benefit: In the event of death of the Insured Person due to accident, an additional lump sum | | |cash amount is paid as benefit. | | | | | |(b) | | |Accidental Death and Disablement Benefit: In the event of death or permanent disablement of the Insured Person | | |due to accident, a lump sum cash amount is paid as benefit. | | | |Waiver of Premiums |We offer two Waiver of Premium Benefits as optional Riders: | | | | | |(a) | | |Waiver of Premium Benefit on Death: In the event of the death of the Policy Owner, the future regular premiums | | |are waived and treated as paid. | | | | |(b) | | |Waiver of Premium Benefit on Total and Permanent Disablement: In the event of total and permanent disablement | | |of the Policy Owner due to any illness or injury, the future regular premiums are waived and treated as paid. | | | | 1) Automatic and Optional Benefits Life and Terminal Illness Benefit Life and Terminal Illness Benefit is an automatic benefit under the Wealthsurance Foundation Plan (hereinafter known as Wealthsurance) and the Homesurance Plan. The Benefit is automatically available to all. 2) Living Benefits As Policy Owner, what benefits do you receive in your lifetime? Sometimes people think of life insurance as providing benefits only after their death.
However, Wealthsurance is designed to provide benefits during your lifetime, whether you are yourself the Insured Person or you designate another person as the Insured Person. Investor will receive the following benefits during his lifetime. 3) Death Benefits What benefits does a investor nominee or legal heirs receive after his death? If a person is Insured , Death Benefit or Accidental Death Benefit is paid to his Nominee in the event of his death. 4) Major Diseases Benefit : It gives benefit on dignosis of 17 major diseases. Some of them are mention below: a. Heart attack b. Coronary artery bypass surgery c. Heart valve replacement surgery d. Surgery for disease of the Aorta . Cancer f. Stroke g. Kidney failure h. Major Organ Transplant i. Paralysis j. Coma WEALTHSURANCE |Min entry age |30 dys | |Max entry age |65 yrs | |Min premium |10000 | |Max maturity age |75 yrs | |Riders Benefit ADBR,ADB,WOPR,MAJOR DISEASES BENIFIT,HOSPITAL CASH BENEFIT, | | |TERMINAL ILLNESS BENEFIT | |Min premium payment term |3 yrs | |Types of funds |EQUITY,NIFTY,Capital Guarantee, Asset Allocator,GRF,MONTHLY,INT | | |A/C,INCOME,LIQUID | |Partial Withdrawal Benefit |After completion of 3 policy years | |Min Partial Withdrawal |After completion of 3 policy years | |Limit On Partial Withdrawal |Minimum balance: Higher of (a) Top-up Premiums paid in the past | | |three years or (b) Annual Regular Premium Amount in the case of a| | |Regular Premium Plan or Rs 20,000 in the case of a Single Premium| | |Plan. |Effect Sum Assured |If the Insured dies or is diagnosed for terminal illness before | | |the age of 60, the Sum Insured will be reduced by any Partial | | |Withdrawals made in the preceding two years | |Surrender Benefit |Surrender value is value less surrender charge payable after | | |three years | NEED TO INVEST AT AN EARLY AGE?
Wealth creation does not happen by chance. We need the right plan. Wealth building needs systematic savings and right investments. Planning to build wealth is one of the most important plans you will ever make. A good plan will allow you to not only accumulate wealth with systematic savings but also grow it steadily over time with the help of right investments. Build slowly and steadily. You will surprise yourself with the results. Investing regularly will help you put smaller amounts of money to build larger wealth. If you do it with discipline, you can create your own pot of gold and meet your cherished goals Homesurance Homesurance Protection Plan
Homesurance Protection Plan is a mortgage reducing term assurance plan, which provides insurance cover equal to the outstanding balance of your home loan. In the unfortunate event of death of the home loan borrower, the insurance cover enables repayment of the home loan liability so that it does not become a burden to the family. A.
Cite this Study of Product Analysis of Idbi Fortis Life Insurance Co. Ltd.
Study of Product Analysis of Idbi Fortis Life Insurance Co. Ltd.. (2018, Mar 01). Retrieved from https://graduateway.com/study-of-product-analysis-of-idbi-fortis-life-insurance-co-ltd/