SUMMER TRAINING ON PROFILE FOR POTENTIAL LIFE ADVISOR AT KOTAK OLD MUTUAL LIFE INSURANCE COMPANY

IN PARTIAL FULFILLMENT OF THE REQUIREMEMT IN THE MBA DEGREE OF VNSGU, SURAT.

SUBMITTED BY: KATHROTIA VIPUL N. GUIDE: EXAMINATION NO. 44 MBA 1ST YEAR GUIDE: DIVISION:-A BHATTI

GUIDED BY:INTERNAL DR.R.S.SHAH EXTERNAL MR.TEJAS

Acknowledgement:
It is a highly reverent privilege for having got the illuminating opportunity to work under Kotak old mutual life insurance company for the fulfillment of my MBA course. This acknowledgement is a petite endeavor to thank all those who were directly / indirectly involved in my project and bestowed me their kind cooperation in pursuit of the same. My summer training stint at Kotak gave me the precious sapience and insight in the study of Profile for Potential Life Advisor. I am highly indebted to Mr. VATSAL SHAH and no words would suffice to express my thanks for his assiduous co-operation and precious guidance in my training period. Without his prudent guidance, solicitous interest and encouragement the project would not have been possible. I express my sincere gratitude to Mr. TEJAS BHATTI for bestowing on me, his kind and gracious facilitation of the training. I thank with deep deference to DR R.S.SHAH, for his inimitable contributive endeavor in guiding me throughout the project. I pay my deep regards and reverence to my family for their affectionate support, inspiration and ultra guidance besides me during the entire project. I express my gratefulness to all people who lended me their esteemed and highly significant time and help for completion of the project. KATHROTIA VIPUL N.

PREFACE:

To be an MBA student is a matter of pride because you are in a field which helps you to develop from a normal human being into a disciplined and dedicated professional. In the management field you cannot create success stories if you are not a good learner. You need to be a good learner to sharpen your knowledge in the particular field to achieve and attain the desired goals and heights. Mere bookish or theoretical knowledge cannot help you in any field whether it is management, technology, research, or any other field. The only thing that can help you is having a sound practical knowledge of the concerned field. As part of my learning in management field and also a requirement of the MBA programme, I have been very fortunate to receive practical knowledge in KOTAK OLD MUTUAL LIFE INSURANCE COMPANY

I received my training at Kotak as a requirement of the MBA curriculum. This training has made me clear the difference between the theoretical knowledge and the practical scenario, making me aware of the importance of practical working conditions/situations. I have tried to present whatever knowledge I gained, and learned at Kotak during my training period in a very systematic manner.

DECLARATION:

I undersigned, KATHROTIA VIPUL N. declare that this general training and project report entitled, PROFILE FOR POTENTIAL LIFE

ADVISOR is the result of my own study research work carried out during
May-June 2007 and has not been previously submitted to any other university or institute for any other examination and for any other propose by any other person.

I will not use this project report in future to use as submission to any other university, institution or publisher without written permission of my guide.

If I am found as defaulter of any declaration, I know that my present or future submission may become invalid and I may not be permitted to appear in the final exam in the college or institution, where I am studying. KATHROTIA VIPUL N.

EXICUTIVE SUMMARY:
In third semester as my training obligation for MBA program during this summer project, my special topic was PROFILE FOR POTENTIAL LIFE ADVISOR in Kotak Old Mutual Life Insurance Company. During this summer project I have taken 100 hour training. I have taken examination to becoming Life Advisor, which is conducted by IRDA. Report contains all the general information of Life Insurance. 100 hours training was become helpful to make clear all the concept of Life Insurance like assignment, nomination, rider, different non forfeiture option, calculation of premium etc. I have also taken product training which was become helpful to understand different plans of Kotak Old Mutual Life Insurance Company. And I have also done marketing for companys product in which I have sold two policy. I have also made market survey to know segment from which most people come to become Business Associate and preference given by client to prefer Kotak old mutual life insurance company. I have also applied hypothesis for that survey.

INDEX:
SECTION I PARTICULAR 1. General Report 1.1 Brief history of Insurance 1.2 How Insurance Work 1.3 Advantages of life insurance 1.4 Information of Agent 2. Principle of life insurance 3. Principle of utmost good faith 4. Information related to Insurable Interest 5. Premium 6. Bonus 7. Name of Insurers 8. Information of Kotak Mahindra Group 9. Plant layout, Org. Chart, Process Flow 10. Kotak Group Company 11. Mission, Vision and Strategy 12. Branch Location 13. Underwriting 14. Insurance Document PAGE NO

10 11 12 14 18 19 21 23 27 28 29 33 37 45 48 50 54

15. Policy Condition 16. Different Non-forfeiture Option 17. Assignment & Nomination 18. Group Insurance 19. Actuarial Profession 20. Law and Regulation 21. Plans of Kotak life insurance 21.1 Kotak Term Plan 21.2 Kotak Money Back Plan 21.3 Kotak Endowment Plan 21.4 Kotak Preferred Plan 21.5 Kotak Child Advantage Plan 21.6 Kotak Retirement Income Plan 21.7 Kotak Group Plan II Profile For Potential Life Advisor 1. Research Objective 2. Research Design 3. Questionnaire 4. Sampling Design 5. Chi-Square Hypothesis Testing 6. Conclusion 7. Bibliography

57 59 62 65 69 70

72 74 78 80 83 84 91

97 99 100 102 108 118 119

SECTION: I

GENERAL REPORT

BRIEF HISTORY OF INSURANCE:

The business of insurance started with marine business. Traders, who used to gather in the Lloyds coffee house in London, agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. The first insurance policy was issued in 1583 in England. In India, insurance began in 1870 with life insurance being transacted by an English company, the European and Albert. The first Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870. This was followed the Oriental life Assurance Co. in 1874, the Bharat in 1896 and the Empire of India in 1897. Later, the Hindustan Cooperative was formed in Calcutta, the United India in Madras, the Bombay Life in Bombay, the National in Calcutta, the New India in Bombay, and the Jupiter in Bombay and the Lakshmi in New Delhi. These were all Indian companies, started as a result of the swadeshi movement in the early 1900s. By the year 1956, when the life insurance business was nationalized and the Life Insurance Corporation of India was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendment to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in India. By 31.3.2002, eleven new insurers had been registered and had begun to transact life insurance business in India.

HOW INSURANCE WORKS:

The mechanism of insurance is very simple. People who are exposed to the same risks come together and agree that, if any one of them suffers a loss, the others will share the loss and make good to the person who lost. All people who send goods by ship are exposed to the same risks, which are related to water damage, ship sinding, piracy, etc, Those owning factories are not exposed to these to these risks, but they are exposed to different kind of risks like, fire,

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hailstorms, earthquakes, lighting, burglary, etc. Like this, different kinds of risks can be identified and separate groups made, including those exposed to such risks. By this method, the heavy loss that any one of them may suffer is divided into bearable small losses by all. In other words, the risk is spread among the community and the likely big impact on one is reduced to smaller manageable impact on all. There are certain principles, which make it possible for insurance to remain a fair arrangement. The first is that it is difficult for any one individual to bear the consequences of the risks that he is exposed to. It will become bearable when the community shares the burden. The second is that the peril should occur in an accidental manner. Nobody should be in position to make the risk happen. The occurrence has to be random, accidental, and not the deliberate creation of the insured person. The collection to be made from each person in advance is determined on assumptions. While it may not be possible to tell beforehand, while person will suffer, it may be possible to tell, on the basis of past experiences, how many persons, on an average, may suffer losses. The following two examples explain the above concept of insurance.

ADVANTAGES OF LIFE INSURANCE:

Life insurance has no competition from any other business. Many people think that life insurance is an investment or a means of saving. This is not a correct view. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in the past, plus interest. This is so in a fixed deposit in the bank, in national savings certificates, in mutual funds and all other savings instruments. If the money is invested in buying shares and stocks, there is the risk of the money being lost in the fluctuations of the stock market. Even if there is no loss, the available money at any time is the amount invested plus appreciation. In life insurance, however, the fund available is not the total of

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the savings already made, but the amount one wished to have at the end of the savings period. The final fund is secured from the very beginning. One is paying for it later, out of the savings. One has to pay for it only as long as one lives or for a lesser period if so chosen. There is no other scheme which provides this kind of benefit. Therefore life insurance has no substitute. Even so, a comparison with other forms of savings will show that life insurance has the following advantages. In the event of death, the settlement is easy. The heirs can collect the moneys quicker, because of the facility of nomination and assignment. The facility of nomination is now available for some bank accounts. There is a certain amount of compulsion to go though the plan of savings. In other forms, if one changes the original plan of savings, there is no loss. In insurance, there is a loss. Creditors cannot claim the life insurance moneys. They can be protected against attachments by courts. There are tax benefits, both in income tax and in capital gains Marketability and liquidity are better. A life insurance policy is property and can be transferred or mortgaged. Loans can be raised against the policy.

The following tenets help agents to believe in the benefits of life insurance. Such faith will enhance their determination to sell and their perseverance. Life insurance is not only the best possible way for family protection. There is no other way. Insurance is the only way to safeguard against the unpredictable risks of the future. It is unavoidable. The terms of life are hard. The terms of insurance are easy.

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The value of human life is far greater then the value of property. Only insurance can preserve it. Life insurance is not surpassed by many other savings or investment instrument, in terms of security, marketability, stability of value or liquidity. Insurance, including life insurance, is essential for the conservation of many businesses. Just as it is in the preservation of homes. Life insurance enhances the exiting standards of living. Life insurance helps people live financially solvent lives. Life insurance perpetuates life, liberty and the pursuit of happiness. Life insurance is a way of life.

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DEFINITION OF AN AGENT:
An agent is one who acts on behalf of another. The another on whose behalf the agent acts, is called the principal. This is the simple definition. The lawyer is the agent of the client, when he argues the case in court. An ambassador is an agent of his country. It is the function, which determines the relationship of agency, not the designation. According to section 182 of the Indian Contracts Act, an agent is a person employed to do any act for another or to represent another in dealing with a third person. The person for whom such act is done or who is so represented is called the principal. In the insurance industry, the term agent is ordinarily applied to a person engaged by the insurer to procure new business. The Insurance Act defines an insurance agent as one who is licensed under Section 42 of that Act and is paid by way of commission or otherwise, in consideration of his soliciting or procuring insurance business, renewal of policies of insurance. He is, for all purposes, an authorized salesman for insurance. Under Section 183 of the Contract Act, any person who is a major, according to the law to which he is subject, and who is of sound mend, can employ an agent. Section 184 provides that as between the principal and third persons, any person may become an agent. Thus, though a minor may be employed as an agent and the principal would be bound by his actions, the minor himself will not be liable to his principal. Unlike other contracts, no consideration is necessary to create an agency contract.

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AUTHORITY OF AN AGENT:

While the maxim cited above makes the principal liable for all the acts done by the agent, he can restrict his liability by specifying the extent of authority granted to the agent. This authority may be expressed or implied. An authority is

Said to be expressed when it is stated by words, spoken or written. It is implied when it is to be inferred from the circumstances of the case. The L.I.C. does not authorize its agents to collect premia or other amounts from policyholders. But if the agent collects such amounts, remits them to the insurer and gets receipts to be handed over back to the policyholder, implied authority can be inferred or construed. The LICs stand has been that its agents are not authorized to collect renewal premiums and that if they do so, they are acting as agents premiums and that if they do so, they are acting as agents of the policyholder and not of the LIC. The implication is that if an agent collects premium from a policyholder and does not remit the same in the office, the L.I.C. would not be liable for that amount. The courts have upheld this stand. Other insurance companies in India may not follow LICs practice. They may grant more or less authority.

METHODS OF REMUNERATING AGENTS:

A life insurance agent works on commission basis. He is paid a stated percentage of the premium collected through his agency. Section 40 A(1) of the insurance Act stipulates that the maximum amount which can be paid to a life insurance agent, by way of commission or remuneration in any form, shall be 35% of the first years premium, 7.5% of the second and third years renewal premium and 5% of subsequent renewal premium. 15

There are some exceptions to this. During the first ten years of the insurers business, he may pay 40% instead of 35% of first years premium. Under certain circumstances, commission of 6% can be paid on the renewal premium even beyond the third year. Within these limits, the manner of remunerating the agent will be determined by the insurer. Normally, under term assurance plans, commission rates are less. Similarly, for shouter duration policies, commission rates are lesser than under longer duration plans. Under single premium plans and pension/annuity plans, rate of commission is very small.

New agents may be paid a stipend to be adjusted against the commission to be earned, as and when the business begins to come in. Brokers are paid on a totally different basis.

PROCEDURE FOR BECOMING AN AGNET:

The insurance Act, 1938 lays down that an insurance agent must posses a license under Section 42 of that Act. The license is to be issued by the IRDA. The IRDA has authorized designated persons, in each insurance company, to issue the licenses on behalf of the IRDA. The fee for the license, the manner of making an application, etc., have been described in the IRDA Regulations. A license issued by the IRDA will be valid for three years. The license may be to act as an agent for a life insurer, for a general insurer or as a composite insurance agent working for a life insurer as well as a general insurer. No agent is allowed to work for more than one life insurer or more than one general insurer. The qualifications necessary before a license can be given are that the person (individual or corporate insurance executive) must Be at least 18 years old

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Have passed at least the 12th standard or equivalent examination, if he is to be appointed in a place with a population of 5000 or more or 10th standard otherwise. Have undergone practical training for at least 100 hours in life or general insurance business, as the case may be, from an institution, approved and notified by the IRDA. In the case of a person wanting to become a composite insurance agent, the applicant should have completed at least 150 hours practical training in life and general insurance business, which may be spread over six to eight weeks. Have passed the pre-recruitment examination conducted by the Insurance Institute of India or any other examination body recognized by the IRDA.

A person with the following disqualifications is debarred from holding a license He has been found to be a unsound mind by a court of competent jurisdiction He has been found guilty of criminal breach of trust, misappropriation, cheating, forgery or abetment or attempt to commit any such offence.

The license once issued, can be cancelled whenever the person acquires a disqualification. Applications for renewal have to made at least thirty days before the expiry of the license, along with the renewal fee of Rs.250. If the application is not made at least thirty days before the expiry, but is made before the date of expiry of license, an additional fee of Rs.100 is payable. If the application is made after the dated of expiry, it would be normally be refused.

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Prior to renewal of the license, the agent should have completed at least 25 hours practical training in life or general insurance business or at least 50 hours practical training in life and general insurance business in the case of a composite insurance agent. Insurers, who select agents for appointment, make arrangements for training, for appearing in the prescribed examinations, and obtaining the license from the IRDA. The procedures have been streamlined and there is little loss of time for any step in the process.

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PRINCIPALES OF LIFE INSURANCE:

A life insurance policy is a contract, in terms of the Indian Contract Act, 1872. A contract is an agreement between two or more parties to do, or not to do, so as to create a legally binding relationship. A simple contract must have the following essentials. Offer and acceptance Consideration Capacity to contract Consensus ad idem (genuine meeting of minds) Legally of object or purpose Capability of performance Intention to create legal relationship

Insurance is a specialized type of contract. Apart from the usual essentials of a valid contract, insurance contracts are subject to two additional principals viz. Principal of Utmost Good Faith & Principal of Insurable Interest. These apply to all insurances, both life and non-life.

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PRINCIPLE OF UTMOST GOOD FAITH:

Commercial contracts are normally subject to the principal of caveat emptor i.e. let the buyer beware. It is assumed that each party to the contract can examine the item or service, which is the subject matter of the contract. Each party can verify the correctness of the statements of the other party. There is no need to take the statements on trust. Proof can be asked for. In the case of insurance contracts, this principal does not apply. Most of the facts relating to health, habits, personal history, family history, etc., which form the basis of the life insurance contract, are known only to the prosper does not disclose them. The underwriter can ask for a medical report. A summary of the doctrine of utmost good faith was given in the case of Rozanes vs. Bowen in 1928 as follows As the underwriter knows nothing and the man who comes to him to ask for insurance knows everything, it is the duty of the assured to make a full disclosure to the underwriter without being asked, of all material circumstances. This is expressed by saying that it is a contract of utmost good faith. The law imposes a greater duty on the parties to an insurance contract than in the case of other commercial contracts, to disclose relevant information. This duty is one of utmost good faith or Uberrimae Fides. It is the duty of the proposer to make a full disclosure to the underwriter. The implications are that, in the event of failure to disclose material facts, the contract can be held to be void ab initio. Every circumstance that would have a bearing on the judgment of a prudent insurer in fixing the premium or determining the acceptability of the proposal for insurance is a material fact. Therefore, facts regarding age, hight, weight, build, nature of occupation, smoking/drinking habits, medical history, surgeries, earlier insurances, etc., must be disclosed.

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There are certain circumstances, which need not be disclosed. They are Facts of common knowledge, which every one is supposed to know. Facts of law Facts which a survey would have revealed. Facts which could be reasonably discovered, by reference to previous policies and records available with the insurer.

The duty of disclosure in life insurance operates till the risk commences. The breach of principal of utmost good faith may arise due to misrepresentation or non-disclosure. Misrepresentation or non-disclosure should be Substantially false and known to the proposer as false Not known to the second party Concerned with facts which are material to the acceptance or assessment of the risk or material to the benefits obtained by the proposer Calculated to induce the other party to enter into a contract on its own terms.

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INSURABLE INTEREST:

All risks are not insurable. Otherwise, an insurance contract would be no different from a wagering contract. Wagering contract is illegal in terms of Section 30 of the Indian Contract Act and therefore invalid. What distinguishes an insurance contract from a wagering contract is that the insured must have an insurable interest in the subject of insurance. In simple terms, it means that the proposer must have a stake in the continuance of the subject insured and could suffer a loss, if the risk is not covered through insurance. What is insured is the financial or pecuniary interest in the subject matter of insurance. The insured must be in a relationship with the subject of insurance, whereby he benefits from its safety and well-being and would sbe prejudiced by its loss or damage. A wager is what is commonly called a bet. Example is, who will win the world cup? One of the parties to the bet will lose. The odds also are that he may gain. Therefore, the risk is a speculative risk and is not insurable. The party concerned could have avoided the loss. Insurance assumes that the event insured against (peril) is not subject to the control of the insured. The Insurance Act, 1938 does not define insurable interest. Court judgments have established the circumstances in which insurable interest is deemed to exist. It has been held that a person has unlimited insurable interest in his own life. Other clarifications relevant for life insurance are A husband has insurable interest in the life of his wife and vice-versa An employer has insurable interest in his employee to the extent of the value of his services. An employee has insurable interest in the life of his employer to the extent of his remuneration for the period of his notice

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A creditor has an insurable interest in the life of the debtor, to the extent of the debt Partners have insurable interests in the lives of each other A surety has an insurable interest in the life of his co-surety to the extent of the debt and also on the life of the principal debtor A company has an insurable interest in the life of a key valuable employee.

If member of families are in business together or there are some other financial relationship, insurable interest arises as a result of such financial involvement. The insurable interest arises, not because of the family ties, but because of the business ties. Partners can insure each others lives, because they stand to lose in the event of death of any of them. A creditor may lose financially if a debtor dies before repaying a loan. His interest would be limited to the outstanding loan with outstanding interest. The legal position about childrens assurances is not quite clear. It is presumed that parents have insurable interest in the life of a child as a child i.e. so long as he is a child. Therefore, most of the L.I.C.s childrens policies incorporate a vesting clause, whereby the policy vests in the child on attainment of majority.

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PREMIUMS:
Premium is the consideration that the policyholder has to pay in order to secure the benefits offered by the insurance policy. It can be looked upon as the price of the insurance policy. It may be a one-time payment. That is not common. Often, it has to be paid regularly over a period of time. A default in premium can be endanger the continuance of the policy. If that happen, the policy will be treated as lapsed and the expected benefits will not be available. The consequences of default are specified in the policy conditions.

RISK, NET, PURE PREMIUM:

Cost to meet the risk of death for one year at a particular age is called the risk premium. The risk premium is based on the probabilities of death at various ages. Mortality tables prepared for use of insurance offices, contain data relating to such probabilities. The risk premium would be adequate to pay the claims, if all the policies were term assurance policies for one year. In the case f Endowment policies, claims have to be paid on survival after some year. Therefore, the actual premium collected would have to be more than the risk premium, whenever falling due. Here also, the mortality tables would be used to estimate the number of persons who may survive the terms. The premium collected by insurers is not utilized every year for payment of claims. This is so for many reasons. One is that the real experience may not be exactly as indicated by the mortality tables, second, the portion of the premium is meant to meet survival benefits. The balance premium remaining with the insurer will be invested and will earn some interest. To the extent of the expected interest earnings, the premium charged can be reduced. The premium worked out after taking into the account the interest, is called the net premium or pure premium.

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LOADINGS:
The administrative expenses of the insurer have to be met out of the premiums paid by the policyholders. To this extent, the premium to be collected will higher. Such additions to the pure premium are called loadings. One of the loadings is due to administrative expensed. Loadings may be made for other reasons as well. One of them would be for unexpected contingencies and fluctuations. A major catastrophe like an earthquake or accident or riots or epidemic, can raise the number of deaths to a much higher level then normal. The risk premium based on mortality tables would be found to be inadequate to meet catastrophic claims. Insurers, therefore, as a matter of safety provide for such contingencies and fluctuations, by loading the premium suitably. Bonus has to be given to participating policyholders. Bonus is declared out of the surpluses determined after actuarial valuations. Surpluses, in a way, reflect the profitability of the business or the quality of management of the business. Nevertheless, insurers load the premiums on account of the bonus. In practice the actual bonus declared should be the higher than the loading.

LEVEL PREMIUM:
Company spreads risk premium on a uniform basis through out the term of the policy. Such uniform premium called as level premium. It also prevents adverse selection of policyholders. It may be inferred to the policyholder that younger aged people are charged lower amount of premium, whereas old aged people are charged higher amount of premium. Hence to avoid adverse situation to arise among policyholder, Level Premium is taken into account.

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OFFICE PREMIUM:

The premium figure arrived at after loading the net premium or pure premium, is called the Office premium. They are now ready for use. The premium figures printed in the promotional literature and brochures are the office premiums. The increase of decrease may be in percentage terms like add or subtract 2.5% or in simple numbers like add or subtract Rs. 1.00. practices of insurers vary. Some provide for rebates for yearly modes and no adjustments for quarterly or monthly modes. Some provide increases for quarterly or monthly modes, but no adjustment made for yearly modes. This depends on how the insurer concerned has worked out the office premiums.

EXTRA PREMIUM:

Extra premiums may be charged on any particular policy. This may happen because of the grant of some benefit in addition to the basic benefits under the plan, like accident benefit or premium waiver benefit. Riders provide additional or supplementary benefits. Extra premium may become chargeable because of underwriting decisions. If the risk of the life to be insured is assessed as more than normal because of health or because of nature of jobs or habits, underwrites may charge extra premiums. These are usually stated as say, Rs. 2 per thousand, and will be added to premium otherwise chargeable.

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PREMIUM CALCULATION:
Step 1: Find out tabular premium i.e. premium quoted in published premium rates for given age (nearer, next or last birthday as the case may be) for the relevant plan and term. This premium is per thousand sum assured.

Step 2: Deduct adjustment for large sum assured, if applicable. Assuming that the insurer allow rebates as follows Rebate per thousand S.A.

Rs.25, 000 Rs.49, 000 Rs.50, 000 Rs. 99, 999 Rs.1, 00,000 and over

Rs.1/Rs.1.50/Rs.2/-

Step 3: Mode rebate Rebate as per mode of payment

MODE OF PAYMENT Yearly Half-Yearly Quarterly Monthly

REBATE/EXTRA 3% Rebate 1.5% Rebate No Rebate 5% Extra

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Step 4: Make an adjustment for Occupational extra and Health extra Step: 5 Multiply these by SA Step: 6 Make adjustments for Double Accident Benefit if any

LIFE FUND:
In normal trading businesses, the excess of income over the expenses in any accounting year, would be considered as profit and will be distributed among the owners. These is not so in life insurance. First of all, the contract for which the premium is paid, does not come to an end at the end the year, it is a long term contract. The profit, if any, can be determined only after the contract comes to an end. The practice of the level premium implies that a part of the premium collected in any year, is meant to cover the higher risk of future years and has to be kept till such risks arise. In relation to endowment plans, the premium has the saving element, which has to be paid as claim at the end of the term. For all these reason, the principles of prudent life insurance management require that all the income from the life insurance business (including the earnings from the investments) be kept aside in a life fund, earmarked exclusively to meet the liabilities under life insurance policies.

ACTUARIAL VALUATION:
Actuary estimates the liabilities of Insurance Company in respect of business in its books. Then estimates the amounts of premium that are due to be received in the future. The difference between the two is the fund required by the insurer to stay solvent.

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Separate funds need to be maintained for non-participating policies. Premiums is calculated on the basis of certain assumptions and expectations of : Mortality Interest Expensed

Actuarial valuation is process where company checks the validity of these assumptions made. Insurance Act requires that Actuarial Valuations be done every year.

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BONUS:
The distribution of the valuation surplus to policyholders is done through the declaration of Bonus. Only policyholders who opt for Participating or With profit policies would be entitled to bonus. Other policyholders who have Non-participating or Without profit policies would be paying slightly lesser amount of premium for the same kind of insurance cover, because of the factor of bonus loading. There are four types of bonus. 1. Simple Reversionary Bonus 2. Compound Reversionary Bonus 3. Final Additional Bonus or Terminal Bonus 4. Interim Bonus Reversionary Bonuses are a bonus which is declared every year but credited in to the account of the policyholder and payable on maturity or death of if it occurs earlier. Sum Assured is immediately increases as soon as bonus is declared Final Additional Bonus is one time bonus payable as incentive to keep the policy in books of company till maturity or death. Interim Bonus is payable if policy mature or death occurs within intervaluation period Every plan has different bonus.

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Reversionary Bonus added to the Sum Assured could be either simple or compounded. Terminal Bonus may also be declared for policies which have continued for longer time.

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NAMES OF INSURERS:
GOVERNMETN INSURER IN INDIA:
Life Insurance Corporation of India

PRIVATE INSURERS IN INDIA:

Kotak Old Mutual Life Insurance Co. Ltd. Bank of Baroda Reliance Insurance Limited. Sahara India Life Insurance Co Ltd. Tata AIG Life Insurance Co. Ltd. Aviva Life Insurance Company Pvt. Ltd. HDFC Standard Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. ICICI Prudential life Insurance Co. Ltd. SBI Life Insurance Company Ltd. MetLife India Insurance Co. Ltd. Allianz Bajaj Life Insurance Co. Ltd. Max New York life Insurance Company. ING Vysya Life Insurance Company.

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KOTAK MAHINDRA GROUP:

BANKING HISTORY:
Established in 1984, The Kotak Mahindra group has long been one of Indias most reputed financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the groups flagship company was given the license to carry on banking business by the Reserve Bank of India. This approval creates banking history since Kotak Mahindra Finance Ltd. is the first company in India to convert to bank.

A LIFETIME OF VALUE:
Kotak Mahindra one of India's leading financial institutions was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Mr. Uday Kotak , Mr. Sidney A. A. Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and Mr. Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. It's been a steady and confident journey to growth and success.

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In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held by Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra (FCKM) held by Kotak Group in May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak Capital and Kotak Securities. Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and Corporates.

The group has a net worth of over Rs. 2,900 crore, employs around 8,800 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 282 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services around 2 million customer accounts.

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INFROMATION OF KOTAK MAHINDRA BANK:

THE COMPLETE BANK:

Kotak Mahindra Bank, address the entire spectrum of financial needs for individual and Corporates. From Retail Finance to Equities, Mutual Funds to Life Insurance and Investment Banking, KOTAK have the products, the experience the infrastructure and most importantly the commitment to deliver pragmatic, end-to-end solutions that really work.

MEMBERS OF BOARD OF DIRECTORS:

1. Chairman 2. Executive Vice Chairman and Managing Director: 3. Other Board of Directors

Mr. K.M.Gherde Mr. Uday Kotak

Mr. Anand Mahindra Mr. Cyril Mahindra Mr. Pradeep Kotak Mr. Shankar Acharya Mr. Shivaji Dam Mr. C. Jayaram Mr. Dipak Gupta Miss Bina Chandarana

4. Executive Director

5. Secretary and Sr. Vice President

35

Corporate Identity: What KOTAK people have to say about their Symbol?
The symbol of the infinite ka reflects our global Indian personality. The ka is uniquely Indian while its curve forms the infinity sign, which is universal. One of the basic tenets of economics is that mans needs are unlimited. The infinite ka symbolizes that we have an infinite number of ways meets those needs.

ORGANIZATION STRUCTURE:

AREA MANAGER 36

BRANCH MANAGER

Asst. Br. MANAGER

SALES MANAGER

AGENCY MANAGER

CORPORATE EXECUTIVES

CORPORATE BANK LIFE ADVISORS AREA MANAGER Asst. BRANCH MANAGER BRANCH MANAGER Total Employees:- 25 Total Life Advisors:- 200 approximately. Mr. Levish Kamdaar Mr. Kurien Abraham Mr. Vatsal Shah

37

PLANT LAYOUT:

WASHING

ROOM

LA ROOM

BRANCH MANAGER ROOM

COMMON PHONE AND CHAIR FOR WAITING

XEROX
MEETING ROOM

TRAINING ROOM

COLLECTION DEPARTMENT

RECEPTION

MEETING ROOM

MAIN ENTRY

NEW VIP ROAD, WAY TO GO AIR PORT

38

ORGANIZATIONAL FLOW:

MD

NATIONAL HEAD

VICE HEAD

AREA MANAGER

BRANCH SALES MANAGER

SALES MANAGER

AGENCY MANAGER

LIFE ADVISORS

LIFE ADVISIORS

39 LIFE ADVISOR

Process Flow:
LIFE ADVISOR TAKE APPOINTMENT OF CLIENT

NO LA MARKETS THE PRODUCT

YES

NOT AGREE TO TAKE POLICY

AGREE TO TAKE POLICY LA WILL COMPLETE ALL FORMALITY OF FORM AND COLLCOLLECTION

DOUBT CLEARED

AGENCTY/SALES MANAGER VERIFY IT AND MAKE HIS HER SIGNATURE

AUERIES LA TRIES TO SLOVE NO YES MANAGER TRY TO SLOVE DOUBT

PROCUDURE OF SUBNISSION OF FORM AND COLLECTION TO DEPARTMENT

SOLVED

NOT SOLVED

DOUBT NOT

DEPOSITE RECEIPT IS GIVEN TO CLIENT AND PROCESS OF UNDERWRITING WILL

DECLARED AS STANDRD LIFE

NOT DECLARED AS STANDARD

ASK FOR EXTRA PREMIUM

RETURN ALL THE PREMIUM WITH IN 15

NOT AGTREE

AGREE TO PAY

PAY TO PARTICULAR DEPARTMENT

END

40

KOTAK GROUP COMPANIES (INFORMATION ABOUT GROUP COMPANIES)

KOTAK MAHINDRA PRIME LTD.:
Kotak Mahindra Prime Limited is 100% subsidiary of Kotak Mahindra Group formed to finance all passenger vehicles. The company is dedicated to financing and supporting automotive and automotive related manufacturers, dealers and retail customers. The company offers car financing in the form of loans for the entire range of passenger cars and multi utility vehicles. The company also offers inventory funding to car dealers and has entered into strategic arrangement with various car manufacturers in India for being their preferred financier. As on March 31, 2005, KMP has a retail distributor network comprising of 54 branches (including representative offices) covering about 100 locations in 17 states in the country and has a wide network of Direct Marketing Associates, brokers and agencies supporting the distribution network and servicing around 1,13,000 customers.

KOTAK MAHINDRA CAPITAL CO. LTD.:

Kotak Investment Banking (KIB) is Indias premier Investment Bank Kotak Investment Banking and Kotak Institutional Equities represent the securities business of the Kotak Mahindra Group.

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Kotak Investment Bank is a full service Investment Bank bringing to its clients the global reach and the local knowledge and skills of Kotak Mahindra. As a full service Investment Bank, Kotak Investment Bankings core business areas include Equity Issuances, Mergers and Acquisitions, Advisory Services and Fixed Income Securities and Principal Business. Its strength lies in understanding the clients businesses backed by a strong research team and an extensive distribution network, which spans a wide variety of investors across the country. It is also the first Indian Investment Bank to be registered with Securities & Futures Authority in the UK and the National Association of Securities and Dealers in USA. Its the first Indian Investment Bank to be appointed by the Government of India as a Co-lead Manager in their international divestment of Gas Authority of India Ltd. through a GDR offering. Kotak Investment Bank today well positioned in an increasing globalize environment to provide full service to its clients based either in India or overseas.

KOTAK MAHINDRA ASSET HANAGEMENT COMPANY:

Kotak Mahindra Asset Management Company (KMAMC), a wholly owned subsidiary of KMBL, is the asset manager for Kotak Mahindra Mutual Fund (FMMF). FMAMC started operations in December 1998 and has over 1,35,000 investors in various schemes. KMMF offers schemes catering to investors with varying risk-return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only government securities.

42

KOTAK SUBSIDIARIES:

Kotak Mahindra International Limited (KMIL) is the international arm of the Kotak Mahindra group and was incorporated in 1994 in Mauritius, with a branch in Dubai. Today the international operations also cover the United Kingdom, through Kotak Mahindra U.K. Limited and in the USA, through Kotak Mahindra Inc. USA. These companies are subsidiaries of Kotak Mahindra Capital Company (KMCC) the Investment Banking Division of the Group. Services offered include GDR and ADR trading and broking Mahindra was the first Indian group to be registered with the Securities and Futures Authority, U.K. Also, Kotak Mahindra is the first Indian group registered in the US providing service to both Institutional investors and High Net Clients in the US for their investments into Indian markets.

KOTAK SECURITIES:
Kotak Securities Ltd., subsidiary of Kotak Mahindra Bank Ltd., is one Indias largest brokerage and distribution house. Over the years Kotak Securities has been one of the leading investment service providers catering to the needs of various investor categories both institutional and non-institutional The private client group of the company provides value added investment advisory services to high net worth individuals, NRI investors, corporate and Banks. The investment product range offered by PCG covers equity investment and equity trading, equity derivatives, portfolio management, IPOs and Mutual funds. The company has full fledged research division involved in macro economic studies, sectoral research and company specific division involved in combined with a strong and well networked sales force which helps deliver current and up to date market information and news. Kotak Securities Ltd., Depository Participant with National Securities Depository Limited (NSDL) provides dual benefit services wherein the investors can use the brokerage services of the company for executing the transactions and the depository services for settling them.

43

Under the portfolio Investment Scheme offered by the company, a highly competent team comprising of Equity Strategist, a Portfolio Manager and a team of equity, technical and derivatives analysts manager the funds of the investors. Kotak Street the retail arm of Kotak Securities Ltd., offers online (through www.kotaksecurities.com) and offline services, its wellresearched expertise and financial products to the retail investors. Kotak Securities Ltd., also an Approved Intermediary under the Securities Lending Scheme, 1997, facilitates clients to borrow and lend securities.

44

KOTAK OLD MUTUAL LIFE INSURANCE:

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank ltd. (KMBL) and Old Mutual plc. At Kotak Life Insurance, the main aim is to help customers take important financial decision at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.

Kotak Mahindra Old Mutual Life Insurance Ltd. , a company offering Life Insurance products, is one of Indias premier & growing insurance company employing over 1000 people, across various offices in India.

We aim to achieve a balance between what our people want as individuals and what the organization expects of them.

The most talented people choose to join and stay with us because we offer them opportunities to: Deliver the best working with the most talented colleagues. Rapidly build skills, knowledge and experience. Work in a challenging environment that constantly demands them to operate at the edge of their ability. Be recognized and rewarded for their achievement by accelerated career paths and differentiated rewards. Be a good corporate citizen.

45

MANAGEMENT:

Managing Director Chief Financial Officer Vice-President (Sales) Vice-President (Sales and Mgmt. Dev.) Health Sales Training

Mr. Gaurang Shah Mr. G. Murlidher Mr. Nandip Vaidya Mr. Arun Patil Mr. R.S.Prasad

46

BRIEF INFORMATION ABOUT OUR MANAGEMENT: Mr. Gaurang Shah (Managing Director):
Mr. Gaurang Shah is the Managing Director of Kotak Mahindra Old Mutual Life Insurance Limited. Mr. Gaurang Shah is a Chartered Accountant and a Cost and Works Accountant. He has also done his Company Secretary ship from the Institute of Company Secretaries of India. Mr. Gaurang Shah has been with the Kotak Group for the past eight years where he has held different positions of great responsibility and juggled multiple tasks effectively. His cumulative experience, primarily in financial services, stands at over 21 years, several of those in building the retail finance business. At Kotak Life Insurance, Mr. Shah will focus on developing new lines of businesses and leveraging the company's existing competencies and network to steer Kotak Life Insurance on its ongoing growth path with even greater thrust. Mr. Shah has a commendable expertise in managing a large number of employees.

Mr. Shah has been previously associated with Kotak Mahindra Primus since its inception and has contributed towards its growth to become a Rs.2000 Cr plus business. Before coming to Kotak Life Insurance, Gaurang Shah was Group Head of Retail Assets for Kotak Mahindra Bank. The Retail Assets include commercial vehicles, personal loans, structured products, car loans and loans against shares.

Mr. G Murlidhar (Chief Financial Officer):

Mr. Murlidhar is a Chief Financial Officer and Company Secretary of Kotak Life Insurance. Mr. Murlidhar is an associate member of the Institute of Chartered Accountants of India, an associate member of the Institute of Company Secretaries of India, and graduate member of the Institute of Cost & Works Accountants of India.

47

Mr. Murlidhar possesses over 20-year work experience and has earlier worked with National Dairy Development Board (NDDB), MDS Switchgear Limited and Nicholas Piramal India Limited and Ion Exchange Ltd. Prior to Kotak Life Insurance; he held the position of VP-Finance at Gujarat Glass Ltd.

As Chief Financial Officer at Kotak Life Insurance, he oversees all aspects of Finance including Operations, Regulatory, Internal Control, Finance, Accounts and Treasury.

Mr. Arun Patil (Vice President Sales & Management Development):

Mr. Arun Patil is the Vice President - Sales & Management Development with Kotak Life Insurance. A post- graduate with Law qualifications, he has over 25 years' experience in life insurance industry. He joined as a Direct Recruit Officer in L.I.C. and worked in various departments such as Sales, Marketing, I.T., Publicity, and Housing & Branch Administration all across the country. On foreign deputation to Fiji Islands for 5 years, Mr. Patil substantially increased the market-share of LIC in competitive environment. After heading LIC's premier Mumbai Division, he joined the then ICICI Ltd. as a member of the insurance venture team and later worked for ICICI Prudential Life Insurance Company as Head of Sales Development. Widely traveled all over the country & the world several times for insurance related work, Mr. Patil presently has responsibilities to enhance the skills, knowledge, productivity, and professionalism of the sales-force, with special emphasis on developing all Managers to enhance their competencies, capabilities & managerial effectiveness.

48

ABOUT OLD MUTUAL:

Old Mutual was established more than 150 years ago and has developed into an International financial services group whose activities are focused on asset gathering and asset management. The Old Mutual Group offers a diverse range of financial services in three principal geographies: South Africa, the United States and the United Kingdom. The company is listed on the London Stock Exchange with a market capitalization of approximately $6 billion and is a member of the elite FTSE 100 index. In the 2003 rankings of the Worlds 500 largest corporations by Fortune magazine, Old Mutual climbed 87 places to position number 366 and was also listed as the 14th largest insurance company in the world. Old Mutual is the largest financial services business in the South Africa, through its life insurance, asset management, banking and general insurance operations. The company serves 4 million life insurance policyholders and employs over 13,000 South Africans in its local operations. In the USA, Old Mutual is one of the top ten fixed annuity businesses offering an array of specialist asset management skills through its 23 asset management businesses. The companys US Life business recorded sales of $4 billion at the end of 2002. Operations in the United Kingdom are focused on wealth management, through Gerrard as one of the leading private client stock broking businesses in the UK.

49

Share interests of a person discharging managerial responsibilities (PDMR) and total voting rights:

1. Net settlement of a Deferred Delivery Award by a PDMR:

Old Mutual plc (the Company) announces the following changes in share interests of a PDMR.

A Deferred Delivery Award held under the Old Mutual Share Option and Deferred Delivery Plan (SOP) was net settled by Paul Hanratty, Managing Director of Old Mutual South Africa, as follows:

PDMR

No. of Original shares net grant date settled 260,769

Award price

Date of net Net settlement settlement price 3 July 2007 R23.70

P Hanratty

3 March R11.77 2004

The total number of shares in the Company held by Mr Hanratty as Deferred Delivery Awards or options under the SOP and the OMSA Management Incentive Share Plan (MISP) after the above transaction is 668,846.

50

2. Total voting rights:

The Company's issued ordinary share capital currently comprises 5,504,668,788 ordinary shares of 10p each. African life subsidiaries of the Company hold a total of 291,345,136 ordinary shares in the Company in their policyholders' funds. These shares cannot be voted while they are held by subsidiaries of Old Mutual plc because of applicable provisions of UK company law. Therefore the total number of voting rights in the Company's ordinary share capital is 5,213,323,652.

51

BUSINESS MISSION:
KOTAK OLD MUTUAL LIFE INSURANCE:
To build a Financial Institution from India of World Scale Size Quality

OLD MUTUAL LIFE INSURANCE:

To use the broad and well established South African base to create a multinational business. To build businesses in the United States and the United Kingdom that focus on the sector of the market with good fundamentals and where the skills can add value. Aim to have roughly equal exposure to each of these 3 markets in next five years. To look upon a build business in Asia to provide growth in 5 to 10 years time.

52

BUSINESS STRATEGY:
OLD MUTUAL LIFE INSURANCE:

To offer superior investment capabilities internationally. To build and protect clients assets.

OLD MUTUALS COMETITIVE ADVANTAGE:

By considering the peer group to be the large multinational financial services groups. As a relatively new entrant into the United States and the United Kingdom markets, the company is able to pick the most attractive opportunities, given current market conditions that match their capabilities. Expansion of business in Asian region, particularly with Kotak Life Insurance, India. The South African businesses that work more closely together to meet the opportunities of economies transformation in that region.

53

UDAY KOTAKS VISION:

be one of the top players in Life Insurance Marketer, India and create value for our stake holders.

To

KOTAK OLD MUTUALS VISION:

1. GLOBAL INDIAN FINANCIAL SERVICES BRAND

Indian Understanding: Global Standards of Delivery.

2. MOST PREFERRED EMPLOYER/BUSINESS PARTNER

Home for bright minds and entrepreneurial skills.

3. MOST TRUSTED FINANCIAL SERVICES COMPANY

High Standard of Compliance/Corporate Governance.

4. VALUE AND NOT JUST SIZE

Business driven with both Value and Growth in mind.

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Branch location:
Registered Office Centre
6th floor, Peninsula Chambers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, (W) Mumbai - 400 013 Tel : (022) 6663 5000. Fax : (022) 6663 5111

Customer Service
Raghuvanshi Mills Compound, Ground floor, Krishna House, Senapati Bapat Marg, Lower Parel Mumbai 400 013. Tel : (022) 6050 5000 Toll free No.: 1800-22-8081 Fax : (022) 6663 5363

AGRA AHMEDABAD RMBALA AMRITSAR ANAND AURRANGABAD BANGOLALORE BARODA BHARUCH BHAVANAGAR BHOPAL CHANDIGARH CHENNI

JODHPUR JORHAT KAITHAL KANPUR KARNAL KOLHAPUR KOLKATA KOTTAYAM LUCKNOW LUDHIANA MADURAI MEHSANA MUMBAI

55

COCHIN COIMBATORE DELHI FARIDABAD GANDHIDHAM GUWAHATI HISSAR HYDERABAD INDORE JAIPUR JALANDHAR JAMNAGAR JAMSHEDPUR

NADIAD NAGPUR NASIK PALANPUR PATIALA PUNE RAJKOT SURAT TINSUKIA TRICHY THRISSUR VALSAD VAPI

56

UNDERWRITING:
A proposal is an application for an insurance cover. When a proposal received, the insurer will not agree to grant the cover automatically. The insurer will make decision as to admissibility of the proposer to the pool of policyholders. These is because of the insurers role as a trustee, it has to ensure that every new entrant into the pool has similar exposure to the risks as the others. This process of verifying the level of risk in each new entrant is called selection or underwriting.

CLASSIFICATION OF RISKS:
The factor affecting the risk on the life of an individual are called hazards.

Physical

Hazards

Occupational

Moral

57

Physical Hazards are Age, Sex, Build, Physical Condition, Physical Impairments, Personal History and Family History. Occupational Hazards are arise out of ones job. The nature of the job or the place in which the job is done have effects on the workers. Moral Hazard refers to the intentions of the proposer. If the intention is to seek undue advantage through insurance policy, there is some moral hazard. Moral hazard is not measurable. But in the following situation, moral hazard can be suspected. The proposer is old, has not been insured so far and the proposal is for a large amount. The proposal is for an amount much larger than what the income would justify. A large amount of insurance is proposed on the life of the family member while the male earning members are not insured or are insured for relatively small amounts.

Assessing Risk:

In order to make decision on the level of risk, help of specialized doctors, medical referees etc. can be taken. Underwriters can use Numerical Rating System, as guidelines to identify and interpret data: Variations are given values depending upon significance. Values are grouped and tabulated showing the extra mortality and the appropriated extra premium. Underwriter calculates variation and place life in their respective class.

58

Underwriter then work out premium to be charged accordingly.

On the basis of assessment, decision on the proposal is taken which may/may not consider standard rates, extra premium, any lieu of, modified terms, specified clause, postponement for a specified period, decline due to heavy risks etc.

NON-MEDICAL UNDERWRITING:

Non-medical underwriting is limited to younger ages, less than 45 years old. There is a limited on SA as well, which, over the years, had been raised up to Rs. 1, 00,000. The limit is higher for those in employment in reputed organization with leave records, medical check up at entry etc. The limit is as high as 5, 00,000 in a case of Commissioned Officers in the Armed Forces and Rs. 4,00,000 for the employees of Government. These limits are not sacrosanct. The conditions for non-medical insurance are decided by insures from time to time, depending on their experience.

FEMALE LIVES:
Insurers have been cautions about granting insurance on female lives. This was because of high pregnancy related death, particularly remote areas. There was also history of frauds. The practices have changed during the last fifty years. Working women and educated women are treated on par with men. Some women who do not have any earned income are considered, provided that husband are adequately insured. Women in the purdah are not considered. These are not rigid rules or principles. Every insurer will have its own experiences and practices. Some insurer allowed lower premium rates for working women.

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UNDERWRITING BY KOTAK LIFE INSURANCE AGENT:

The agent has to inform insurer about the factors that affect the risk of the subject matter of insurance. The agent has to make sure of this by submitting an unambiguous report and also by ensuring that the proposal papers do not Conceal any information. This is an obligation that the agent owes to the insurer. This is also an obligation that agent owes to the insured.

5 EASY STEPS TO BUYING A POLICY:

1. Initially, calculate the exact amount of insurance that you need 2. Decide which product suits you best based on your life stage and need 3. Calculate the premium that you need to pay on the basis of the product that you have decided to buy 4. Once you have decided on all the above parameters, get in touch with a Life Advisor at any of the Kotak Life Insurance branch offices. Alternatively, you can call us on 1-600-22-8081 and leave your name and contact details so that we can arrange for a Life Advisor to contact you. 5. Our Life Advisor will assist you in filling up a proposal form. In addition to a proposal form, you need to submit some financial documents that are required in order to buy a policy. The Life Advisor will notify the list of financial documents required for the same.

60

INSURANCE DOCUMENT:

A life insurance policy is a contract. The stakes in the contract are usually large and interested in the stakes, many. There could be dispute involving the insurer and the insured or the insurer and the beneficiaries of the policy or between the beneficiaries. The terms and conditions of the policy will provide the grounds to decide the issues in the dispute. These terms will be based on and will relate to statements and actions at a various times during the codes of the policy. These will have to be proved through documents. Documentation, therefore, is important in the life insurance business.

PROPOSAL FORM
The first document in the insurance file is the proposal or application for insurance. It is usual to obtain the proposal in a standardized, printed form. This is to be completed by the proposer in his handwriting and signed in the presence of a witness. Contracts require signatures to be authenticated through witnesses. If someone else has filled up the proposal form, the person filling the proposal form has to declare that he wrote the answers as dictated by the proposer, that the questions were read out to him and that he had understood the answers. If the proposer has answered the questions in a language different from the question, there must be a declaration to the effect that the question were explained to the proposer in his language and the answers were written by him only after understanding the questions fully. If the proposer is illiterate, the thumb impression has to be attested by a third party, who has to give a ;declaration that the question were explained to him and answers dictated by him were recorded truthfully and were read out to him and were understood by him. The proposal form will contain information as to (a) the name and address of the proposer, (b) name of the person to be insured, if different

61

(c) details of the person to be insured like his occupation and date of birth (d) details about the insurance required like plan, term and sum assured (e) riders to be added (f) Details about earlier proposals for insurances. Further particulars required along with the proposal, would include (a) preferred mode of premium (b) whether the policy should be backdated, to get the benefit of a lower age and a lower premium (c) employment particulars to enable SSS deductions and (d) Nomination.

PERSONAL STATEMENT:

The personal statement is to be completed along with the proposal. This asks for particulars about the state of health of the person proposed to be insured, his family history, his personal habits, medical consultations and illnesses, absence from work due to medical grounds, etc. Under the Regulations issued by the IRDA in April 2002, a copy of the proposal is to be supplied to the policyholder within 30 days of the completion of the contract.

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The medical report and the reports submitted by the agent or other officials of the insurer are considered confidential and will not be made available to the proposer.

FIRST PREMIUM RECEIPT (FPR):

The underwriters decision on the proposal may be to accept at OR on modified terms. If it is accepted at OR, the policy can be commenced immediately, provided the full premium has been paid. The FRP will be issued. If the acceptance is on modified term, the proposer has to agree to the modified term and pay the balance premium if any, before the FRP can be issued. The IRDA Regulations require that the decision on the proposal should be made by the insurer within 15 days. The FRP is the evidence that the insurance contract has begun. The policy document, which is the evidence of the contract, may be issued only after some time. Once policy document is issued, the FPR becomes irrelevant. The will state that the proposal for insurance has been accepted and that the premium has been received. It will give the particulars of the policy, such as policy number, date of commencement of risk, date of maturity, date of last payment of premium, premium amount, mode, name and address of the life assured. The due date of the next premium due is also stated. However, the Regulation issued by the IRDA, provide that the policyholder has the option to withdraw from the contract within 15 days of the issue of the policy. He will be entitled to refund of the premium paid, less cost of risk for the short period and expenses towards medical examination and stamp duty.

63

RENEWAL PREMIUM RECEIPT (RPR):

When the policyholder pays the subsequent premiums due under the policy, renewal premium receipts are issued. These RPRs are important to prove payment, as defaults can lead to termination of the contract. Renewal receipts are not issued in respect of policies under SSS. Electronic systems are being developed for payment of premium. These include electronic clearing systems, direct debit to the bank account or payment through the internet. Credit and debit cards, may also be accepted.

ENDORSEMENTS:

In a pre-printed policy from, the standard policy condition and privileges are printed. If any of them need modification, in keeping with the terms of acceptance, endorsements are attached to the policy. If individual policies are printed by computers, such endorsements may be avoided. During the currency of the policy, alterations may be effected in age, plan or term, sum assured, mode of premium payment, etc. Separate endorsement will be placed on and kept attached to the policy document, to indicate such changes. Nominations made subsequent to the issue of the policy are to be made on the back of the policy itself as endorsements. Assignments can also be made on the back of the policy.

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POLICY CONDITION:
The policy states the obligation and rights of the policyholder, as will as the terms and conditions of the policy.

AGE:
The policy conditions provide that, if the age of the life assured is found to be higher than the age as stated in the proposal, apart from any other rights and remedies available to the insurer, premium at the higher rate will have to be paid from the commencement, with interest. In such case, the insurers right and remedies would include also the right to declare the policy ab initio void, on the ground of suppression of material facts. The following are usually accepted as proofs of age Certified extract from the municipal records Certificate of baptism Certified extract from family Bible if it contains fate of birth Certified extract from school or college records Certified extract from service register of employer Passport Identity cards issued by Defence department in case of defence personnel Marriage certificate issued by a Roman Catholic Church

65

Non standard age proofs Horoscopes Self-declaration by way of affidavit Elders declaration Certificate by village panchayat.

DAYS OF GRACE:

The policy stipulates that the premium has to be paid in the insurers office on the dates specified therein. These dates are called due dates. Premiums are required to be paid on the due dates mentioned in the policy. Insurers however allow a grace period for payment of premium. Payment within the grace period is considered to be payment on time. The grace period would be one month, but not less than 30 days for yearly, halfyearly or quarterly modes of premium and 15 days for monthly modes of premium. In the case of SSS, if the premiums are deducted by the employer and there is a delay n remitting the same to the insurers office, the delay is usually condoned. If the delay happens frequently, the SSS arrangement may be terminated. The days of grace for the various made are: 1 month but not less than 30 days for yearly, half yearly and quarterly modes of premium 15 days for monthly mode No days allowed for SSS mode

66

If the premium is not paid within the days of grace, it is considered a default and the policy is said to lapse. Following are the benefits of days of grace: Extention in premium paying period. If death occur within days of grace, full sum assured will be payable after deducting outstanding premium without interest.

Premium are also collected in banks and the date of deposit at bank is considered as the date of premium payment

LAPSE AND NON-FORFEITURE:

A payment within the days of grace is deemed to be a payment on the due date. If the premium is not received by the insurer within the days of grace, there is a default on the part of policyholder. The insurer is entitled to say that the policy comes to an end. Such termination is called Lapse. In practice, however, insurer do not forfeit all the premiums paid when the policy lapse. The Insurance Act does not allow such forfeiture. The reason is that every policy acquires a reserve as a result of: 1. premiums in the early years of the policy being more than what is justified and 2. The savings element in the premium. The policy conditions provide various safeguards to policy holder, when there is a premium default. These provision are called non-forfeiture provision. There are various options. One of them is to return to the policyholder and

67

amount that represent the reserve. This amount is called Surrender Value or Cash Value.

The other non-forfeiture options are: making the policy paid up keeping policy in force through premiums advanced from the surrender value and providing term assurance cover from the surrender value

PAID UP VALUE:

Under this option, the SA is reduced to a sum which bears the ratio to the full sum assured as the number of premiums actually paid bears to the total number originally stipulated in the policy. Formula for paid up value:Paid up value = No. of premiums paid No. Of premiums payable X SA

Premiums are not required to be paid on a policy which has become paid-up. If other benefits related to the SA are payable, the benefits will now be related to the reduced paid-up value.

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KEEPING POLICY IN FORCE:

The option of continuing the policy as in full force is made possible by nationally advancing premium as a loan from surrender value. This can continue as long as the total premiums advanced, is not more than the surrender value. Its main advantage is that the insurance cover is fully safeguarded and not reduced. Also, the policyholder can pay the premium whenever he is in a position to do so and the policy will continue to be in forced. The interim failure to pay will have no effect. If the policy is With Profits it will be entitled to bonus additions.

EXTENDED TERM ASSURANCE:

The third option is of extended term insurance cover. Under this option, the insurer converts the policy in to a single-premium term insurance for the full SA of the policy for such a period as the net surrender value will purchase, as the insureds age at the time of lapse of the policy. These is similar to the second, except that the premium advanced from the surrender value is not the premium due under the policy, but the premium necessary to provide the term insurance cover, equal to the SA. Under the extended term, the policy remains in full force for the full sum assured for a limited period instead of a reduced paid up amount of insurance remaining in force for the entire policy period, in the first option.

REVIVAL:

When a policy lapse, it benefits neither the insurer nor the insured. The insured loses the insurance risk cover for the full amount. It signifies a reversal of the decision to arrange for an insurance cover and therefore, exposes the policy-holder to possible adverse circumstances.

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For revival of policies, the following will normally be necessary o Arrears of outstanding premiums with interest o Proof of continued good health

The requirement of proof of good health varies according to the duration of lapse and also according to the SA. Up to six month from the date of lapse, no proof is necessary. Only the arrears of premium will do. This period of six month is extended to 12 months in the case of policy, which have been in forced for at least 5 years. If the policy is due to matured within a year, then also, only arrears of premium are enough. Where proof of continued good health is necessary, the nature of proof can be a simple declaration or an elaborate medical examination with special reports. The considerations are the same as in case of a fresh proposal for insurance. The special revival scheme is allowed if, o The policy had not acquired any Surrender Value on the date of lapse. o The period expired after lapse is not less than six months and not more than three years. o The policy had not been revived under the scheme before.

The original policy will be endorsed for changes in the date of commencement, age, premium, date of last installment of premium, and maturity date. The difference between the old premium and the new premium with interest thereon will have to be paid. The policyholder will be required to pay the endorsement fee. Under the Installment Revival Scheme, the policyholder will not be required to pay full arrears but only six monthly premiums or half of the yearly premiums. The balance of the arrears will be spread over the remaining due dates in the policy year current on the date of revival, and two full policy years thereafter.

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Another scheme offered is the Loan-cum-revival scheme, where under the arrears required for revival are advanced out of the Surrender Value of policy, as a loan under the policy. If the loan available under the policy is more than the amount required for revival, the excess may be paid to the policyholder, on request.

ASSIGNMENT:
A life insurance policy is property. It represents rights. It is an actionable claim as described in the Transfer of Property Act 1882. A life insurance policy forms part of the estate of the assured and can be sold, mortgaged, charged, gifted or bequeathed. Sectionals 130 and 131 of the Transfer of Property Act detail the procedures for transfer of the interests in the policy. An assignment transfers the rights, title and interest of the assignor to the assignee. Legal provisions for assignment of insurance policies are available in almost all the countries. Section 38 of the Insurance Act, 1938 states that The assignment can be done by an endorsement on the policy or by a separate deed. When the assignment is made by an endorsement on the policy itself, no stamp duty is necessary. Separate deeds have to be stamped It must be signed by the transferor or his duly authorized agent The signature must be attested by a witness The assignment is effective as soon as it is executed It must be sent to the insurer along with a notice.

The person making the assignment should have the right or title to the property in question. The assignor must be major and competent to contract. An assignment involving a part of the policy moneys is considered to be bad in law. An assignment once made cannot be cancelled or even altered in form, by the assignor unless the assignee reassigns the policy.

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Assignments are of two kinds, absolute, and conditional. In both cases, all rights, title and interest of assignor in the policy pass to the assignee. The assignee becomes the title holder and can deal with the policy in any manner he likes. He does not have to take the consent of the assignor. In conditional assignment, the interest in the policy automatically reverts to life assured on the occurrence of the specified condition.

NOMINATION:
Nomination is a simple way to ensure easy payment of policy moneys in the case of a death claim. As per Section 39 of the Insurance Act, 1938, the holder of a policy on his own life, may nominate the person or persons to whom the money secured by the policy shall be paid in the event of the death. This can be made at the time during the currency of the policy. A person having a policy on the life of another, cannot effect a nomination. A nomination can be changed by the policyholder by making another endorsement on the policy. When a policy is assigned, the existing nomination is automatically cancelled. The assignee, not being the life assured, cannot make a nomination. When the policy is reassigned to the life assured, he will have to make a fresh nomination. A nomination gives the nominee only the right to receive the policy moneys in the event of death of the life assured. A nominee does not have any right to the whole (or part) of the claim. He only has the right to give a valid discharge but has to hold the moneys(all of it) on behalf of those entitled to it. When a nominee is a minor, an appointee should be appointed by the policyholder. The appointee must affix his signature to the endorsement either in the proposal form or on the text of the policy in token of his having consented to act as an appointee. The life assured has a right to revoke the appointment of the appointee and appoint a fresh appointee. The appointee loses his status when the nominee becomes a major.

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When the nominee is a minor and there is no appointee, the claim amount under the policy, cannot be paid to the guardian, appointed or natural. It can be paid only to the legal heirs of the deceased life assured. Nominations made after the commencement of the policy have to be intimated to the insurer. Otherwise, they are not effective.

SURRENDERS AND LOANS:

Surrender is a voluntary termination of the contract, by the policyholder. A policyholder can surrender the life insurance policy at any time before it becomes a claim. The amount payable on surrender is called the surrender value or cash value. The surrender value is usually a percentage of the premium paid or a percentage of the paid up value. The percentage increases as the duration of the policy increases. In most of the life insurance policies, insurers provide the facility of loans. Loans are given up to 80% or 90% of the Surrender Value of the policy in question. Interest is charged on loans. The procedure for grant of loan would provide that the policy must be assigned absolutely to the insurer. The assignment in favour of the insurer for getting the loan under the policy does not invalidate an existing nomination.

FORECLOSURE:
As the name suggest, foreclosure means closure or writing off the policy before its actual maturity. When a loan is granted under a policy, the life assured has a choice t pay the interest or allow it to accumulate to be adjusted from the policy moneys payable when the claim arises. This is possible only if the premiums are paid regularly and the policy remains in force. In case of paid-up policies, the surrender value will not grow as fast as the accumulated interest. The principal loan and accumulated interest could become more than the surrender value at some time. In that case, foreclosure becomes necessary.

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When it is decided to take foreclosure action, a notice may be issued to the policyholder calling for the payment of arrears of loan interest. If the interest is not paid, the policy is foreclosed, which means surrendered to loan. The foreclosure action is complete when taken in the insurers office. The balance surrender value, if any, after adjusting the principal loan and outstanding loan interest, is paid to the policyholder, after obtaining the discharge voucher

GROUP INSURANCES:
Group insurance is a plan of insurance, which provides cover to a large number of individuals under a single policy called the master policy. The individuals covered under the master policy are not parties to the contract. The contract will be between the insurer and a body that represents the group of individuals covered. A bank or financier can make arrangements through a group policy to protect his interests against defaults occurring because of the death of the debtors. In India, the development of group insurance has taken place since the early 1960s. Before that, the group insurance business was very little. Originally, group insurance was confined to employer-employee groups only. Group insurance schemes are used by the government, as instruments of social welfare. Social security is a concern of Government in all countries. But the dimensions of social security vary considerably. Because the contract is with the body, that body is the policyholder. The individuals are the beneficiaries. The amount and terms of insurance are negotiated by the policyholder and not by the individual beneficiaries. The benefits will be determined on bases that apply uniformly to all the individuals.

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FUNDAMENTALS OF GROUP INSURANCE SCHEME:

Policyholder is the body or group of individuals together All individuals within that body are beneficiaries

Amount and Term of insurance are decided by the policyholder based on uniformly applicable criteria Benefits determined on bases which apply uniformly to all individuals Premium paid by policy holder There are two scheme for premium o Contributory method o Non-contributory method

In group insurance only one policy will be issued. This policy is known as master policy. There will be only one proposal in group insurance Different from salary saving scheme Primary objective of the group should not be to avail benefits from this scheme Entry and exit from the group is not on the free will of individuals Underwriting/selection is on the whole group

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Premiums change year on year because of new entrants and exits, as also the group composition changes Premium may also change because of the mortality experience of the group

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RURAL AND SOCIAL SECTORS:

LEGEL PROVISIONS:

Vide paragraph 19 of the First Schedule of the Insurance Regulatory and Development Authority Act, 1999, sections 32B and 32C have been added to the Insurance Act, 1938. These sections read as under. 32B. Insurance business in rural or social sector Every insurer shall, after the commencement of the Insurance Regulatory and Development Authority Act, 1999, undertake such percentages of life insurance business and general insurance business in the rural or social sector, as may be specified, in the Official Gazette, by the Authority, in this behalf. 32C. Obligations of insurer in respect of rural or unorganized sector and backward classes. The Regulations made by the IRDA, in terms of these provisions, were notified in the Official Gazette on 19.7.2000. They were amended in October 2002 and notified in the Official Gazette dated 16.10.2002. Under these Regulations, The rural sector has been defined as a place in which, as per the latest census, the population is less than 5000, the density of population is less than 400 per square kilometer and more than 25% of the male working population is engaged in agricultural pursuits. (Agricultural pursuits are defined as cultivation, agricultural labour, work in livestock, forestry, fishing, hinting, plantation, orchards, and allied activities.) The social sector is defined as including the unorganized sector, the informal sector, the economically vulnerable or backward classes and other categories of persons, both in rural and urban areas.

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The unorganized sector is defined as including self-employed workers such as agricultural labour, bidi workers, brick kiln workers, carpenters, cobblers, construction workers etc. The informal sector is defined as the small scale, self-employed workers typically at a low level of organization and technology, with the primary objective of generating employment and income with heterogeneous activities like retail trade, transport, repair and maintenance, construction etc. People below the poverty line are included in the expression economically vulnerable or backward classes.

Insurers who begins to transact life insurance business in the year 2000 or later, are required by these regulations to write, in the rural sector. At least 5% of the total policies written direct, in the first financial year, going up to 9% in the second financial year, 12% in the third financial year, 14% in the fourth financial year and 16% in the fifth financial year.

With regard to the social sector, the obligations are laid down as 5000 lives in the first financial year, 7500 lives in the second financial year 10000 lives in the third financial year 15000 lives in the fourth financial year 20000 lives in the fifth financial year

It has also been provided that in the first year, if the period of operation is less than twelve months, the obligation of lives in the social sector, could be proportionately less. It is also provided that the IRDA may normally revise the obligations once in five years.

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INFORMATION OF THE ACTUARIAL PROFESSION:

An actuary is a person who has passed specialized examinations conducted by the Actuarial Society of India or the Institute of Actuaries, London. He is the technical expert on life insurance matters studying the mortality of the insuring public, evaluating the financial condition of the insurers, determining the policies to be offered and the premium to be charged, determining the policies to follow in underwriting and investments of its funds, deciding on the bonus that can be declared on the participating policies, and so on. A good actuary is a good economist, a good statistician and a good security analyst. Every well-managed insurance company will have an actuary to continuously study its operations and advise the management on the appropriateness of their policies. The periodical valuation of a life insurance company, required to be conducted as per the provisions of the Insurance Act, is the responsibility of the actuary. The premium proposed to be charged by the insurer, has to be certified by the actuary before they are submitted for the approval of the IRDA. The IRDA Regulations requires that every life insurance company must have an Appointed Actuary, whose obligation and duties include Render actuarial advice to the management of the insurer, in areas of product design and pricing, insurance contract working, investment and reinsurance Ensure the solvency of the insurer at all times Comply with the Act in regard to premium, values of assets and liabilities Certify the actuarial report and other returns Certify the determination of the mathematical reserves.

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LAW AND REGULATIONS:

INSURANCE ACT, 1938:

The Insurance Act 1938, which came into effect from 1st july 1939, and was amended in 1950 and later in 1999, is the principal enactment relating to the business of insurance in India. The Act contains provisions regarding licensing of agents and their remunerations, prohibition of rebates, and protection of policyholders interests. Section 2 (5A) defines chief agent as a person who, not being a salaried employee of an insurer, in consideration of commission (a) performs any administrative and organizing functions for the insurer and (b) procures life insurance business for the insurer by employing or causing to be employed, insurance agents on behalf of the insurer. Section 2 (17) defines a special agent as one who procures life insurance business, in consideration of commission, employing or causing to be employed insurance agents on behalf of the insurer. He only procures business through agents but does not perform administrative functions like a chief agent. Section 42A provides for the registration of chief agent and special agents. Certificates to function as such are to be issued after registration. The certificates are valid for 12 months and may be renewed. The provisions also stipulate the number of insurance agents that a chide agent may employ directly or through special agents and the minimum business they have to do. Similarly, there are stipulations about the number of agents to be employed by a special agent and the minimum business to be done.

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT 1999:

This Act, passed in December 1999, provided for the establishment of the IRDA to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of insurance industry and for matters connected therewith or incidental thereto. It also sought to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972. The IRDA is a corporate body. It is advised by an Insurance Advisory Committee consisting of not more than 25 members to represent the interests of commerce, industry, transport, agriculture, consumer forums, surveyors, agents, intermediaries, organizations engaged in safety and loss prevention, research bodies and employees associations in the insurance sector. The Regulations framed by the IRDA, in so far as they affect the working of the agents, age reproduced in full at the end of this course.

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DIFFERENT PLANS OF KOTAK LIFE INSURANCE COMPANY: FOR INDIVIDUAL

KOTAK TERM PLAN:

1. What is Kotak Term Plan? Kotak Term Plan is a pure risk product that aims to cover your life at a nominal cost. You may want to take this plan to cover your outstanding debts like a mortgage, a home loan etc. Since this is a pure risk cover product, there are no maturity benefits payables on survival. This is a non-participating plan. 2. Who can avail of this plan? How old do you have to be to avail of this plan? Minimum age - 18 years Maximum age - 60 years For what term can I avail of this plan? 10 - 30 years for regular premium 5 - 30 years for single premium

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What is the minimum premium that I need to pay and at what intervals can I pay them? Mode Amount Quarterly Rs.540 Half Yearly Rs.1055 Annually Rs.2000 Single Premium Rs.10000

What is the maximum age that the plan can cover you till? 70 years

3. What are the advantages of this plan? It is a low-cost insurance plan. You can choose between a regular premium payment option or a single premium payment option. In case you opt for the regular premium payment option, you may pay your premiums either annually, or in half yearly or quarterly installments. Your Kotak Term Plan can be converted into any other plan offered by Kotak Life Insurance (except for another Term plan) provided there are at least 5 years before cover ceases. In case you forget to pay your premium by the due date, you are entitled to a grace period of 30 days from the date of unpaid premiums. In case of a financial emergency, you have the option to surrender the policy provided you have taken the single premium payment option.

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4. What value-adds can you opt for? You may avail of the following non-participating value-adds for a nominal premium at the time of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness Benefit) not exceeding 30% of the basic Kotak Term Plan premium. Accidental Death Benefit: This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this rider is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). Permanent Disability Benefit: This benefit can be added to your basic life insurance policy to provide financial support in case of disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum permanent disability benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). Permanent disability is defined as permanent and immediate inability to work or permanent loss of use of two limbs or total and permanent loss of sight. Critical Illness Benefit: This benefit can be added to your basic life insurance policy to provide financial support in the event of a medical emergency. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency.

5. What do you receive on maturity of the policy? Since this is a pure risk cover plan, there are no maturity benefits. 6. What happens in the event of death of the life insured? In the event of death during the term of the policy, the beneficiary would receive the sum assured. 7. Are there any Tax Benefits? Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are

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as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details.

KOTAK MONEY BACK PLAN

1. What is Kotak Money Back Plan? The Kotak Money Back Plan not only covers your life, it also assures you a certain percent of the sum assured as cash payment at regular intervals of every 5 years. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset etc. This is a participating plan (with profits). 2. Who can avail of this Plan? How old do you have to be to avail of this plan? Minimum age- 18 years Maximum age- 60 years For what term can I avail of this plan? 15, 20 & 25 years What is the maximum age that the plan can cover you till? 75 years

3. What are the advantages of this plan? 1. The plan not only covers your life but also provides you with a survival benefit payout every 5 years.

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2. In the unfortunate event of death of life insured, the beneficiary would receive the death benefit. The death benefit keeps increases by 7% of the sum assured every year. 3. On maturity, you would receive the sum of the Survival Benefit, Bonus addition and guaranteed addition. 4. Bonus addition is the amount in the Accumulation Account, in excess of the sum assured. Accumulation Account is your personal account in which the premiums that you pay are deposited, the return declared every year is added and the survival benefit payouts, risk and expense charges are deducted. Guaranteed addition is the guaranteed amount payable on maturity, over and above the Survival Benefit. 5. The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works hard for you. 6. The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. 7. You have the benefit of a 15-day free look period. 8. You have the option of paying premiums quarterly, half yearly or yearly. 9. The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works hard for you. 10. The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. 11. You have the benefit of a 15-day free look period. 12. You have the option of paying premiums quarterly, half yearly or yearly.

4. What value-adds can you opt for? You may avail of the following value-adds for a nominal premium at the time of taking the plan, subject to the aggregate premium on all value-adds not exceeding 30% of the basic Kotak Money Back Plan premium

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Term Benefit/ Preferred Term Benefit: In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum Term Benefit you can avail of is equal to the basic sum assured. Where the term benefit cover applied for is more than Rs 10 lakhs, better rates may apply, subject to meeting eligibility requirements. Accidental Death Benefit: This benefit provides an additional amount (over and above the sum assured) to the beneficiary in the event accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs) Permanent Disability Benefit: This benefit can be added to the basic life insurance plan to provide financial support in case of permanent disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum permanent disability benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).

Permanent disability is defined as permanent and immediate inability to work or permanent loss of use of two limbs or total and permanent loss of sight. Critical Illness Benefit: This benefit can be added to the basic life insurance plan to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency. Life Guardian Benefit: This benefit can be availed of, only in case where the life insured and the proposer are two different individuals. In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. Accidental Disability Guardian Benefit: In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy.

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6. What do you receive on maturity of this plan? On maturity, you would receive the sum of the Survival benefit, guaranteed addition and Bonus addition. The table below illustrates the survival benefit pay out for every Rs.1000 of sum assured.

Survival Benefit Payouts (in Rs.)

Payout for every Rs. 1000 Sum Assured 5th year 10th year 15th year 20th year 25th year

15-YEAR PLAN SURVIVAL BENEFIT GUARANTEED ADDITION 20-YEAR PLAN SURVIVAL BENEFIT GUARANTEED ADDITION 25-YEAR PLAN SURVIVAL BENEFIT GUARANTEED ADDITION 150 150 150 150 400 400* 200 200 200 400 300* 250 250 500 200*

7. What happens in the event of death of the life insured? In the unfortunate event of the death during the term of the plan, the beneficiary would receive the death benefit. The death benefit increases by 7% of the sum assured each year. This increasing amount has been designed keeping in mind the rising inflation.

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Death Benefit payout for every Rs. 1000 Sum Assured Term 15 YEARS 20 YEARS 25 YEARS 1st year 1000 1000 1000 2nd year 1070 1070 1070 3rd year 1140 1140 1140 5 year 1280 1280 1280
th

7th year 1420 1420 1420

10th year 1630 1630 1630

Payouts (in Rs.) 15th 20th 25th year year year 1980 1980 1980 2330 2330 2380

8. Are there any Tax Benefits? Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details.

KOTAK ENDOWMENT PLAN

1. What is Kotak Endowment Plan? Kotak Endowment Plan is a protection plan that covers your life and at the same time ensures that your money does not lie idle. It invests a portion of your premium in financial instruments and ensures a considerable growth in savings. This is a participating plan (with profits).

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2. Who can avail of this plan? How old do you have to be to avail of this plan? Minimum age - 18 years Maximum age - 65 years For what term can I avail of this plan? 10-30 years What is the maximum age that the plan can cover you till? 75 years 3. What are the advantages of this plan? On maturity, you would receive the sum assured plus the bonus addition. Bonus addition is the amount in the Accumulation Account*, in excess of the sum assured. Accumulation Account is your personal account, in which the premiums that you pay are deposited, the return declared every year is added and risk and expense charges are deducted. The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works harder for you. The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. You can take a loan against your policy, after the policy has been in force for at least three years. You have the option of paying premiums quarterly, half yearly or yearly. You also have the flexibility to pay premiums through the full term of the policy or pay it for a fixed term of 3, 5, 7, 10 or 15 years.

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You have the benefit of a 15-day free look period.

4. What value-adds can you opt for? You may avail of the following value-adds for a nominal premium at the time of taking the plan, subject to the aggregate premium on all value-adds not exceeding 30% of the basic plan premium. Term Benefit / Preferred Term Benefit: In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum term benefit you can avail of is equal to the basic sum assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements. Accidental Death Benefit: This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). Permanent Disability Benefit: This benefit provides financial support in case of your permanent disability due to an accident. The amount payable is over and above the basic sum assured and would be paid out as an annuity. The maximum Permanent Disability Benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). Permanent disability is defined as a permanent and immediate inability to work, the permanent loss of use of two limbs or a total and permanent loss of sight. Critical Illness Benefit: This benefit can be taken with the basic life insurance policy to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency. The maximum Critical Illness Benefit that you can avail of is equal to half the basic sum assured subject to maximum of Rs. 20 lakhs.

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Life Guardian Benefit: This benefit can be availed of, only in a case where the life insured and the proposer are two different individuals. In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. Accidental Disability Guardian Benefit: In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy. This benefit is available also where the life insured is the proposer.

5. What happens in the event of death of the life insured? In the event of death of the life insured during the term of the plan, the beneficiary would receive the sum assured or the amount in the Accumulation Account, whichever is higher. 6. Are there any Tax Benefits? Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details

KOTAK PREFERRED TERM PLAN:

1. What is Kotak Preferred Term Plan? The Kotak Preferred Term Plan is designed to provide you with reduced premium rates for a sum assured of Rs.10 lakhs and above.

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2. Who is eligible for Kotak Preferred Term Plan? 1) Males over the age of 18 years, who do not use tobacco in any form. 2) Females over the age of 18 years.

3. What are the advantages of this plan? It is a low-cost insurance plan. You can choose between a regular premium payment option and a single premium payment option. In case you opt for the regular premium payment option, you may pay your premiums either annually, or in half yearly or quarterly installments. Your Kotak Term Plan can be converted into any other plan offered by Kotak Life Insurance (except for another Term plan) provided there are at least 5 years before cover ceases In case you forget to pay your premium by the due date, you are entitled to a grace period of 30 days from the date of unpaid premiums. In case of a financial emergency, you have the option to surrender the policy provided you have taken the single premium payment option.

4. What value-adds can you opt for? You may avail of the following non-participating value-adds for a nominal premium at the time of taking your policy, subject to aggregate premium on all value-adds (except Critical Illness Benefit) not exceeding 30% of the basic Kotak Term Plan premium. Accidental Death Benefit: This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this rider is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).

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Permanent Disability Benefit: This benefit can be added to your basic life insurance policy to provide financial support in case of disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum permanent disability benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). Permanent disability is defined as permanent and immediate inability to work or permanent loss of use of two limbs or total and permanent loss of sight.

Critical Illness Benefit: This benefit can be added to your basic life insurance policy to provide financial support in the event of a medical emergency. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency.

4. What do you receive on maturity of the policy? Since this is a pure risk cover plan, there are no maturity benefits. 5. What happens in the event of death of the life insured? In the event of death during the term of the policy, the beneficiary would receive the sum assured. 6. Are there any Tax Benefits? Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations

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KOTAK CHILD ADVANTAGE PLAN:

1. What is Kotak Child Advantage Plan? The Kotak Child Advantage Plan is an investment plan designed to meet your child's future financial needs. It's a plan that gives your child the "azaadi" to realize his dreams. The plan is a participating plan with a 15-day free look period.

2. Who can avail of this plan?

How old does the child have to be to avail of this plan? Minimum age - 0 years Maximum age -17 years

For what term can I avail of this plan? 10 to 30 years

What is the maximum sum assured allowed under this plan? Rs. 25, 00,000

3. What are the advantages of this plan? On Maturity, you would receive the sum assured plus the bonus addition. Bonus addition is the amount in the Accumulation Account, in excess of the sum assured. The balance available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works hard to earn more for your child.

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 The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the Term. You can take a loan against this plan, after the policy has been in force for at least three years. You have the option of paying premiums quarterly, half yearly or yearly. Accumulation Account is your personal account in which the premiums that you pay are deposited, the return declared every year is added and risk and expense charges are deducted. You have the benefit of a 15 day free look period.

4. What value-adds can you opt for? You may avail of these value adds for a nominal premium at the time of taking the plan. The aggregate premium of the value-adds should not exceed 30% of the basic policy premium. Life Guardian Benefit: In case of the unfortunate death of the premium payer, this benefit keeps the policy alive by waiving all future premiums on the policy. Accidental Disability Guardian Benefit: In case the premium payer is permanently disabled as a result of accident, this benefit keeps the policy alive by waiving all future premiums on the policy.

5. Are there any Tax Benefits? Section 80C, 10(10D) of Income Tax Act, 1961 would apply. You are advised to consult your tax advisor for details.

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KOTAK RETIREMENT INCOME PLAN:

1. What is the Kotak Retirement Income Plan? The Kotak Retirement Income Plan is a savings plan designed to meet your post-retirement needs. It is a plan that gives you "Jeene ki azaadi". It gives you the choice to remain independent even after retirement. The Kotak Retirement Income Plan is a participating plan. The plan comes in two forms: (i) With Cover, (ii) Without Cover. 2. Who can avail of this plan?

How old do you have to be avail of this plan? Minimum age - 18 years Maximum age - 60 years

For what term can you choose to pay the premiums? 5 yrs - 30 yrs

How old you have to be to receive your annuity? Minimum Age - 45 yrs Maximum Age - 65 yrs

At what intervals can you pay the premium? Quarterly Half Yearly Annually

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3. What are the advantages of this plan?

You can choose to retire at any age between 45 yrs and 65 yrs. On Retirement: You may take a lump sum in cash of up to a third of your Basic Sum Assured or Accumulation Account*, whichever is higher; and the balance of the benefit you are eligible for will be used to buy an annuity of your choice. Annuity Options: You may buy an annuity either from Kotak Life Insurance (subject to the choice and rates available at that time)**, or from any other insurer. Early Retirement Benefits: You may opt to retire early, i.e. at any age before the normal retirement date (subject to the policy being in force for 3 years or your attaining a minimum age of 45 yrs, whichever is later). You can then secure benefits with your Accumulation Account, net of an early retirement charge of 5%. If the early retirement is due to ill health, then you may retire before attaining the age of 45. You can then secure benefits with your full Accumulation Account. Late Retirement Benefits: You may opt to retire after the retirement date originally selected, and select a new retirement date (subject to a maximum of 65 years). No further premiums will be payable and the death benefit will be equal to the balance in Accumulation Account. (However, all riders will cease at the original retirement date). You can make lump-sum injections into your policy at any time before retirement (such lump-sum injections during a year may not exceed 25% of the Basic Sum Assured). A Supplementary Accumulation Account will be created for this, and will be paid out in the same manner as other benefits.

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You may exercise the option of paying premiums from the Supplementary Accumulation Account, created for "lumpsum injections", if the need arises. For a "With Cover" plan, you have the facility of Automatic Cover Maintenance, which ensures that the cover remains in force even when you miss the premium payments. This facility is available after the first three years of the term. You have the option of paying premiums in quarterly, halfyearly or yearly installments. You have the facility of a 15-day free look period.

4. What value-adds can you opt for? You may avail of the following value-adds for a nominal premium at the time of taking the policy, subject to the aggregate premium on the valueadds not exceeding 30% of the premium on the basic benefit. Term/ Preferred Term Benefit: In the event of death during the term of this benefit, the beneficiary would receive an additional Death Benefit amount, which is over and above the Sum Assured. The maximum amount of benefit you can avail of is equal to the Basic Sum Assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements. Accidental Death Benefit: In the event of death as a result of an accident during the term of this benefit, your beneficiary will receive an additional benefit, which is over and above the Basic Sum Assured. The maximum Accidental Death Benefit you can avail of is equal to the Basic Sum Assured (subject to a maximum of Rs. 10 lakhs). Critical Illness Benefit: In case of the first occurrence of a critical illness during the term of this benefit, the Critical Illness Benefit Sum Assured will be added to the Supplementary Accumulation Account. Once the addition is made to the Supplementary Accumulation Account, the Basic Sum Assured would reduce by the Critical Illness Benefit Sum Assured, the Basic Accumulation Account would reduce in the same

99

proportion and future premiums for the plan would be recalculated based on the reduced Sum Assured. . The maximum Critical Illness Benefit Sum Assured you can avail of is equal to the Basic Sum Assured (subject to a limit of Rs.20 lakhs) Permanent Disability Benefit: If you meet with an accident during the term of this benefit, and are permanently disabled, you would be entitled to an additional amount, which is over and above the Basic Sum Assured. This amount will be added to the Supplementary Accumulation Account and will be available on retirement. The maximum benefit available under this plan is equal to the Basic Sum Assured (subject to a maximum of Rs.10 lakhs). Permanent Disability is defined as permanent and immediate inability to work or permanent loss of use of two limbs or total and permanent loss of sight. Life Guardian Benefit: In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. This is available only where the proposer and the life insured are two different individuals. Accidental Disability Guardian Benefit: In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy. This is available only when the proposer and the life insured are two different individuals.

4. What are the Tax Benefits on this Plan? Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details.

5.

What happens in the event of the death of the life insured before retirement? For the "With Cover" Plan: The benefits to the beneficiary will be, greater of:

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(i) Sum Assured less all the premiums due but not paid, and (ii) Accumulation Account. This is used to buy an annuity, and provide commutation benefit, in accordance with the beneficiary's choice. For the "Without Cover" Plan: The benefits to the beneficiary will be, greater of: (i) Return of premiums (without interest), and (ii) Accumulation Account. This will be used to buy an annuity, and provide commutation benefit, in accordance with the beneficiary's choice.

KOTAK PREMIUM RETURN PLAN:

This plan is a sure and secure insurance option without the hassles or worries of a conventional insurance plan. With minimal paperwork and procedures, you get the dual benefit of a risk cover and savings. At the end of the term, a minimum of the premiums paid by you will be returned depending on the option you choose. In other words, this is a term plan that makes financial sense by offering maturity benefits as well

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1. The Kotak Premium Return Plan is ideal for you.. If you do not have a life insurance cover or are underinsured and would like to protect your family in the eventuality of you not being around yet receive all your premiums back on maturity If you would like to cover your life without any elaborate paper-work and medical tests and with premiums being automatically deducted from your account

2. Who can avail of this plan? Enter age: Minimum age - 18 years Maximum age - 50 years Term: 10, 15 or 20 years Maturity Age: Maximum- 60 years for term 10 years 65 years for term 15 years 70 years for term 20 years

3. Key Features: Return of premiums

This is a non-participating plan that covers you throughout the term and on maturity returns all the premiums paid by you. The amount of premium returned will depend on term of the plan and the premium chosen by you.

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Hassle-free

With a simple application procedure, no medical tests and automatic debit of premiums: you can have an insurance plan without any worries.

Death Benefit The beneficiary will receive the death benefit (Sum assured less premium unpaid during the year of death) in case of the unfortunate death of the life insured.

Maturity Benefit On maturity, the premiums paid by you will be returned. The amount payable to you on maturity will depend on the term of the policy chosen by you.

The table below shows you the Maturity and Death Benefit for different premium* and term options

3. Advantages: Twin benefit of risk cover and savings Affordable premiums Hassle free premium payments No medical examinations

5. Tax Benefit Section 80C, 10(10D) of Income Tax Act, 1961 would apply. You are advised to consult your tax advisor for details.

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FOR GROUP:
KOTAK GRATUITY GROUPPLAN:
Gratuity is not just a statutory obligation but also a very important tool today to retain and attract talented employees. A comprehensive and effective gratuity plan can reduce your business cost and corporate tax. At Kotak Life Insurance, we understand this. We have therefore designed a gratuity management solution that not only manages your retirement liability effectively but also helps you release resources for your core business activities.

1. Key Highlights of Kotak Gratuity Grouplan (KGGP): Market-linked returns and long term investment growth (UnitLinked Non-Participating Scheme) Choice of eight investment fund options Switching facility amongst the available funds An in-built life cover (flat cover of minimum Rs. 1,000 per member or equivalent to Future Service Gratuity) that insures your employees lives and provides security to their families Critical Illness cover at half of accelerated additional death cover at a nominal cost

2. Who can opt for KGGP? Employer- employee groups that fall under the purview of Payment of Gratuity Act, 1972. Minimum group size: 10 members

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Minimum entry age: 18 years Maximum cover age: Retirement age as specified in the Trust Rules of the employer or 65 years whichever is lower

3. How does KGGP help me as an employer? Contribution to an approved gratuity fund is deductible under section 36(1) (v) of the Income Tax Act, 1961. Income earned from investments by an approved gratuity fund is tax-exempt under section 10(25) (IV) of the Income Tax Act, 1961.

4. How does KGGP help my employees? The gratuity settlement for retirement/resignation/withdrawal (as the case may be) will be settled as per the Trust Rules. Gratuity receipts are tax-exempt in the hands of the employee up to the limit of Rs. 3, 50,000 under section 10 (10) of the Income Tax Act, 1961. The death benefit will be equal to Future Service Gratuity or a flat cover (as agreed by the employer) plus gratuity settlement as per the Trust Rules. Death benefits payable to the employee are exempt from tax. In the event of Critical Illness, a benefit equal to rider amount, if opted will be paid. The death benefit for the remaining term to retirement will be reduced by the rider benefit paid.

5. What are the other Services to look for? Switching facility between different fund options free of charge Facility to pay the gratuity contribution in installments Annual Statement of Account with monthly newsletter

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Daily disclosure of Net Asset Value (NAV) of units Life cover is available 24 hours a day, 7 days a week, anywhere in the world

4. How will the contributions be made? Fresh contributions may be made into the plan at the employers convenience. At the end of the year, the contribution payable will be determined on the basis of the accumulated asset value and the actuarial valuation. The premium for life cover (compulsory) and critical illness cover (if selected) is payable annually in advance.

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SUPERANNUATION GROUPPLAN:
In todays time when the prospect of out-living retirement savings is larger than ever, few employees take the time to plan their long-term financial goals or have the discipline to systematically save for their retirement years. As an employer of choice, you can help your employees tremendously by assisting in their retirement planning and in turn increase employee retention. The solution lies in the Kotak Life Insurances Superannuation Grouplan 1. How does the Group Superannuation plan work? The Kotak Superannuation Grouplan (KSGP) is a uniquely flexible product that addresses the needs of both the employers and the employees. Under this plan, individual employee accounts are invested in one of the many investment portfolios on a unitized basis as per each employees choice. Parameters such as eligibility criteria for fund membership, vesting guidelines, contribution rates, transfer rules and voluntary contributions are all designed as per each employers unique needs. 2. How will KSGP help me as an employer? You know that your employees are your most valuable assets. By helping to provide for retirement, you help increase employee retention and motivation. Moreover: to the Finance Act 2006, annual contributions made by an approved superannuation trust up to Rs. 1,00,000 per employee can be claimed as deductible business expenses under section 115 WB (1C) read with section 115 WC (1)(b) of the Income Tax Act, 1961. Any contribution beyond the prescribed limit will qualify for Fringe Benefit Tax Income earned on investments by an approved superannuation trust is tax-exempt under section 10 (25) (iii) of the Income Tax Act, 1961.

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The amount of deduction available on initial as well as ordinary annual contribution to an approved superannuation fund shall not exceed 27% (including the contribution to Provident Fund) of the employees annual basic salary for each year of his service under section 36 (1)(iv) of the Income Tax Act, 1961. 4. How does KSGP help my employees? KSGP gives your employees unparalleled flexibility and peace of mind. Any employee contribution towards an approved superannuation fund qualifies for tax deduction under section 80 C of the Income Tax Act, 1961. At the time of retirement or death, employee or employees nominee (as the case may be) can commute part of the accumulated fund amount as a tax-free lump sum under section 10 (10A) and section 10 (13) of the Income Tax Act, 1961. The balance amount must be used to buy annuity from either Kotak Life Insurance or any other insurer in the market at the then prevailing rates. At the time of withdrawal from service, employee has an option to either transfer his superannuation account to his/her new employer (if the latter provides for that) or leave his account with the trust or commute part of the accumulated fund and buy an annuity from the balance amount from either Kotak Life Insurance or any other insurer in the market at the then prevailing rates.

5. How do I know if my company is eligible for KSGP? Minimum group size: 10 members Minimum entry age: As specified in the Trust Rules or18 years, whichever is higher. Maximum cover age: As specified in the Trust Rules, or 65 years whichever is lower. Minimum Term: One year. This is an annually renewable plan.

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SECTION: II

PROFILE FOR POTENTIAL LIFE ADVISOR

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RESEARCH OBJECTIVE:
For the purpose of Research, I have chosen the area of insurance sector. The topics under the study understand the insurance business and A study report to find out from where most of the clients come.

MAIN OBJECTIVE OF THE TOPICS:

The main objective behind this topic was to understand all the concept of life insurance, which plays important role in insurance business like: Proposal form Underwriting Actuarial valuation Death and Maturity claim Riders Role of Life Advisor Revival, Lapsation and Foreclosure Nomination and Assignment Calculation of age (Nearer, Next, Last) Calculation of Premium Calculation of Bonus Calculation of Present Value Calculation of Surrender Value etc.

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This entire thing plays very important role in life insurance business. As such, Understanding and Learning the Insurance Business depends wholly on one own self, there was no need of any research to be made.

A STUDY REPORT TO FIND OUT FROM WHERE THE MOST OF THE CLIENTS COME:
The main objective behind this topic was to find out that segment of people who are joining the insurance industry as clients. For the purpose of research, meaning of Segment include, o o o o o o Employee ( private or Government) Business Professional Farmer House wife Other

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RESEARCH DESIGN:
PURPOSE OF THE STUDY:

Here, people who are engaged in the insurances business come from different segment. Any people take the policy of Life Insurance Company but he/she has to fulfill all the term and conditions. Like, children below the 18 year age can not take policy and can not enter into contract with insurance company but parent has insurable interest in his son so they can take the policy of his/her son. Different occupations indicate different segment of people in the market. Now these various segment are: Employee (With Private or Government) Business Professional Farmer House wife Other

Now, from the companys point of view, in order to increase their business, they have to provide different type of better service and return to their client as compared to other company and give proper training to the Life Advisor so, they can give better plan to the client as per their need and requirement. The Research wholly was Descriptive in nature. It serve the purpose of Who, What, Where, How many etc. The Research is basically designed to give the description regarding a particular phenomenon.

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QUESTIONNARIE ( KOTAK LIFE INSURANCE COMPANY )

1. Name:-. Address:- ... . (M) 2. Marital status:Married Single 3. Gender:Male Female 4. Age:18-30 31-45 5. Income sources:Business Service Professional 6. Income:0 - <2,00,000 2,00,000 - <5,00,000 5,00,000 & Above 7. Have you made any type of investment in life insurance? If yes, Kotak life Insu. Co. LIC ICICI Pru. Life Insu. Co. Max New York life Insu. Co. HDFC Stand. Life Insu. Co Bajaj life Insu. Co. Reliance life Insu. Co. SBI Life Insu. Co. Other Agriculture Housewife Other 46-60 61 & Above

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8. Why you prefer Kotak Life Insurance Company? Better service Early claim payment Transference of plan Good Returns Other 9. Are you aware about any plan of Kotak Life Insurance Company? If yes Kotak Safe Investment Plan Kotak Head Start Plan Kotak Retirement Income Plan Kotak Guaranteed Growth Plan Other 10. Would you like to know about any popular plan of Kotak Life Insurance Ltd.? If yes, Kotak Safe Investment Plan Kotak Head Start Plan Kotak Retirement Income Plan Kotak Guaranteed Growth Plan 11. Would you like to know about Kotaks Business Partners Option? (From which you can earn extra money along with Your profession.) Yes No 12. Reference: - 1)................................................................. 2)

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SAMPLING DESIGN:
SAMPLING UNIVERSE:
The sampling universe, under the concept of sampling plan, for this Research can be best understood as the various segments of people according to their occupation in whole of the Baroda city. Here for the purpose of survey, I have taken all people, except minors & Lunatics as our sampling universe.

SAMPLING SITE:

Baroda city as a whole was considered to be the sampling site. No biness toward any area in the Baroda city was entertained.

SAMPLING SIZE:
The sample size selected at random can be denoted into numbers as 200.

OCCUPATION EMPLOYEE BUSINESS PROFESSIONAL FARMER HOUSE WIFE OTHER TOTAL

COUNT 84 31 29 11 18 27 200

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SAMPLING UNIT:
The Individual and not the Groups were the sampling units for out research.

FINDING OF THE SURVEY AND ITS ANALYSIS:

1. kindly indicate your age group

AGE GROUP 18 - 30 31 - 45 46 - 60 61 & Above

N 109 31 57 3

From the above date, it can become be analyzed that around 109 of our sample population belong to the youngest age group i.e. 18 to30 years. The second highest age group in our sample population is 46 - 60 Years, which comprises 28.5 %, followed by the age group of 31 45 years with 15.5 %. The lowest rate is 1.5 % which comprises of the oldest age group that is 61 and above.

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117

The following pie chart gives clears picture of our finding:

2. Occupational Detail

61 & Above 2% 46 60 COUNT 28%

84 31 29 11 18 27 200

OCCUPATION EMPLOYEE BUSINESS PROFESSIONAL FARMER HOUSE WIFE OTHER TOTAL

31 45 16%
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The following chart gives clears picture of our finding

42% 45% 40% 35% 30% 25% % of Respondents 20% 15% 10% 5% 0% Employee BusinessProfessional Farmer Occupation H.W. Other 15.50% 14.50% 9% 5.50% 13.50%

The above area of our survey was one of the main important subjects to derive any conclusion. If we try to find out the mean of the above variables, then it comes to around 33. It mean that the number of sample respondents belonging to all the above 6 categories come to 33, except employee because it include both Private and Government employee. Data wise finding can be seen from the above two angles i.e. tabular and graphical means, with count and percentage values respectively. The maximum outcome is the respondents working in company and the lowest one is the farmer. The share of business, professional and other is approximately equal.

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3. Income Group INCOME GROUP LESS THAN 2 LAKH 2 TO 5 LAKHS 5 LAKH AND ABOVE % OF TOTAL RESPONDENTS 53.5 30.5 16 N 107 61 32

For every analysis, the income group plays a very vital role, for our analysis to be interpreted, this part is very essential. From the datas collected, there are around 53.5 % of respondents who are below 2 lakhs yearly income & 30.5 % of respondents are earning between 2 to 5 lakhs p.a. There are16 % respondents, whose yearly income are more than 5 lakhs. The chart for data is:

5 LAKH AND ABOVE

16

32

Income

30.5

2 TO 5 LAKHS

61

53.5

107

LESS THAN 2 LAKH

20

40

60

80

100

120

140

160

180

No. of respondent

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INTERESTED TO JOIN BUSINESS PARTNER OPTION OF KOTAK LIFE INSURANCE

YES 136

NO 64 200

TOTAL

4. Interested to join business partner option of Kotak life insurance.

This was one of the most crucial categories of questions in the questionnaire. Most of the interpretations followed by the suggestions will be depend on this analysis. The data shows that out of the total sample respondents i.e. 200, there are 136 respondents who are interested to join Business Partner option of Kotak life insurance. And rest of the respondents is not interested to do any type of work with their occupation. If we take percentage wise, then 68 % of our respondents are interested and other 32 % are not interested. The table above shows the same figures followed by the Cumulative chart.

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INTERESTED TO JOIN BUSINESS PARTNER OPTION OF KOTAK LIFE INSURANCE 0 20 40 60 80 100 120 140

No. of respondent

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5. Preference of respondents

PREFERANCE BETTER SERVICE GOOD RETERN OTHER

N 26 29 15

There are total 70 people in our sample who have invested in Kotak life insurance. These entire 70 people have different preference for their investment. Out of total 70 people 26 people has given more preference to Better Service and 29 people has given more preference to Good Return. So it means that out to total investor, most of the investor comes because of the Kotak life insurances Better Service and Good Return. The figure shows data of above table.

OTHER, 15 BETTER SERVICE, 26

BETTER SERVICE GOOD RETERN OTHER

GOOD RETERN, 29

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CHI-SQUARE HYPOTHESIS TESTING

1.

Interest of Respondents to join the business partner option of kotak life insurance with respect to their income. Ho = Interest of Respondents to join the business partner option and their income are independent. H1 = Interest of Respondents to join the business partner option and their income are dependent.

INCOME GROUP
INTERESTED YES NO TOTAL LESS THAN 2 LAKH 80 27 107 2 LAKH TO < 5 LAKH 39 22 61 5 LAKH AND ABOVE 17 15 32 TOTAL 136 64 200

Calculation of chi-square Fo 80 27 39 22 17 15 Fe 72.76 34.24 41.48 19.52 21.76 10.24 TOTAL Fo Fe 7.24 -7.20 -2.48 2.48 -4.76 4.76 ( Fo Fe )2 52.4176 51.8400 06.1504 06.1504 22.6576 22.6576 ( Fo Fe )2 / Fe 0.72 1.53 0.15 0.32 1.04 2.21 5.97

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Calculated chi-square = 5.97 To find out tabulated chi-square, it is necessary to find out Degree of Freedom (d. f.). So, d. f. = (r-1) x (c-1) d. f. = (2-1) x (3-1) d. f.= 1 x 3 = 3 The level of significance is assumed as 1% Hence, the tabulated value at 1% significance level with d.f. = 5, is 9.21 Summarizing, Calculated chi-square = 5.97 Tabulated chi-square = 9.21 Calculated chi-square is lesser than Tabulated chi-square i.e. 5.97 < 9.21 So, our Null Hypothesis is accepted. It means that interest of respondents to join business partner option of Kotak life insurance and their income are independent of each other.

2.

Interest of Respondents to join the business partner option of kotak Life insurance with respect to their age group. Ho = Interest of Respondents to join the business partner option and their age group are independent. H1 = Interest of Respondents to join the business partner option and their age group are dependent.

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AGE GROUP 18-30 31-45 46-60 61 & ABOVE TOTAL

INTERESTED 80 14 30 00 136

NOT INTERESTED 29 17 27 03 64

TOTAL 109 031 057 003 200

Calculation of chi-square:

Fo 80 14 30 0 29 17 27 3

Fe 74.12 21.08 38.76 02.04 34.88 09.92 18.24 00.96 TOTAL

Fo Fe 5.88 -7.08 -8.76 -2.04 -5.88 7.08 8.76 2.04

( Fo Fe )2 34.5744 50.1264 76.7376 04.1616 34.5744 50.1264 76.7376 04.1616

( Fo Fe )2 / Fe 0.47 2.38 1.98 2.04 0.10 5.05 4.21 4.34 20.57

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Calculated chi-square = 20.57 To find out tabulated chi-square, it is necessary to find out Degree of Freedom ( d. f. ). So, d. f. = (r-1) x (c-1) d. f. = (4-1) x (2-1) d. f.= 3 x 1 = 3 The level of significance is assumed as 1% Hence, the tabulated value at 1% significance level with d.f. = 5, is 11.30 Summarizing Calculated chi-square = 20.57 Tabulated chi-square = 11.30 Calculated chi-square is lesser than Tabulated chi-square i.e. 20.57 > 11.30 So, our Null Hypothesis is rejected. It means that interest of respondents to join business partner option of Kotak life insurance and their age group are dependent of each other.

3.

Interest of Respondents to join the business partner option of kotak Life insurance with respect to their occupation. Ho = Interest of Respondents to join the business partner option and their occupation are independent. H1 = Interest of Respondents to join the business partner option and their occupation are dependent.

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OCCUPATION EMPLOYEE BUSINESS PROFESSIONAL FARMER HOUSE WIFE OTHER TOTAL

INTERESTED 54 19 11 03 07 16 136

NOT INTERESTED 30 12 18 08 11 11 64

TOTAL 84 31 29 11 18 27 200

Calculation of Chi-square: Fo 54 19 11 3 7 16 30 12 18 8 11 11 Fe 57.12 21.08 19.72 7.48 12.24 18.36 26.88 9.92 9.28 3.52 5.76 8.64 TOTAL Fo Fe -3.12 2.08 -8.72 -4.48 -5.24 -2.36 3.12 2.08 8.72 4.48 5.24 2.36 ( Fo Fe )2 9.7344 4.3264 76.0384 20.0704 27.4576 5.5696 9.7344 4.3264 76.0384 20.0704 27.4576 5.5696 ( Fo Fe )2 / Fe 0.17 0.21 3.86 2.68 2.24 0.30 0.36 0.44 8.19 5.70 4.77 0.64 29.56

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Calculated chi-square = 29.56 To find out tabulated chi-square, it is necessary to find out Degree of Freedom ( d. f. ). So, d. f. = (r-1) x (c-1) d. f. = (6-1) x (2-1) d. f.= 5 x 1 = 5 The level of significance is assumed as 1% Hence, the tabulated value at 1% significance level with d.f. = 5, is 15.10 Summarizing Calculated chi-square = 29.56 Tabulated chi-square = 15.10 Calculated chi-square is lesser than Tabulated chi-square i.e. 29.56 > 15.10 So, our Null Hypothesis is rejected. It means that interest of respondents to join business partner option of Kotak life insurance and their occupation are dependent of each other.

4.

Interest of Respondents to give more preference to service with respect to their occupation. Ho = Interest of Respondents to give more preference to service and their occupation are independent. H1 = Interest of Respondents to give more preference to service and their occupation are dependent.

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OCCUPATION EMPLOYEE BUSINESS PROFESSIONAL FARMER HOUSE WIFE OTHER TOTAL

INTERESTED IN SERVICE 11 5 3 2 2 3 26

NOT INTERESTED IN SERVICE 17 11 5 4 1 6 44

TOTAL 28 16 8 6 3 9 70

Calculation of Chi-square Fo 11 5 3 2 2 3 17 11 5 4 1 6 Fe 10.40 05.94 02.97 02.23 01.11 03.34 17.60 10.06 05.03 03.77 01.89 05.66 TOTAL Fo Fe 0.60 -0.94 0.03 -0.23 0.89 -0.34 -0.60 0.40 -0.03 0.23 -0.89 0.34 ( Fo Fe )2 0.3600 0.8836 0.0009 0.0529 0.7921 0.1156 0.3600 0.1600 0.0009 0.0529 0.7921 0.1156 ( Fo Fe )2 / Fe 0.03 0.15 0.00 0.02 0.71 0.03 0.02 0.02 0.00 0.01 0.42 0.02 1.43

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Calculated chi-square = 1.43 To find out tabulated chi-square, it is necessary to find out Degree of Freedom ( d. f. ). So, d. f. = (r-1) x (c-1) d. f. = (6-1) x (2-1) d. f.= 5 x 1 = 5 The level of significance is assumed as 1% Hence, the tabulated value at 1% significance level with d.f. = 5, is 15.10 Summarizing Calculated chi-square = 1.43 Tabulated chi-square = 15.10 Calculated chi-square is lesser than Tabulated chi-square i.e. 1.43 < 15.10 So, our Null Hypothesis is accepted. It means that interest of respondents to give more preference to better service and their occupation are independent of each other.

5.

Interest of Respondents to give more preference to good return with respect to their occupation. Ho = Interest of Respondents to give more preference to good return and their occupation are independent. H1 = Interest of Respondents to give more preference to good return and their occupation are dependent.

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OCCUPATION EMPLOYEE BUSINESS PROFESSIONAL FARMER HOUSE WIFE OTHER TOTAL

INTERESTED IN GOOD RETURN 16 5 3 1 1 3 29

NOT INTERESTED IN GOOD RETURN 12 11 5 7 2 6 41

TOTAL 28 16 8 6 3 9 70

Calculation of Chi-square Fo 16 5 3 1 1 3 12 11 5 7 2 6 Fe 11.6 6.63 3.31 2.49 1.24 3.73 16.4 9.37 4.69 3.51 1.76 5.27 TOTAL Fo Fe 4.4 -1.63 -0.31 -1.49 -0.24 -0.73 -4.4 1.63 0.31 3.49 0.24 0.73 ( Fo Fe )2 19.36 2.6569 0.0961 2.2201 0.0576 0.5329 19.36 2.6569 0.0961 12.1801 0.0576 0.5329 ( Fo Fe )2 / Fe 1.67 0.40 0.03 0.89 0.05 0.14 1.18 0.28 0.02 3.47 0.03 0.10 8.26

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Calculated chi-square = 8.26 To find out tabulated chi-square, it is necessary to find out Degree of Freedom ( d. f. ). So, d. f. = (r-1) x (c-1) d. f. = (6-1) x (2-1) d. f.= 5 x 1 = 5 The level of significance is assumed as 1% Hence, the tabulated value at 1% significance level with d.f. = 5, is 15.10 Summarizing Calculated chi-square = 8.26 Tabulated chi-square = 15.10 Calculated chi-square is lesser than Tabulated chi-square i.e. 8.26 < 15.10 So, our Null Hypothesis is accepted. It means that interest of respondents to give more preference to good return and their occupation are independent of each other.

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Conclusion:

Here after private company come into the market there are total 16 life insurance company and more 11 company is coming so even though the hypothesis of Better Service and Good Return is accepted company has to give more important to Better Service and Good Return because when these 11 company come into the market, competition will increase more and more and company has to provide all these facility. So company has to provide these facilities from today so company will get more benefit when there will be cut through competition. People who want to join business partner option of Kotak Life Insurance are dependent on Age Group and Occupation so company has to more emphasis on Age Group and Occupation to cover more and more life Advisor.

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BIBLIOGRAPHY:

www.kotaklifeinsurance.com www.kotak.com IRDA Book Booklet of different plan of Kotak life insurance company Gupta and Gupta, Business Statistic Secondary data from Kotak life insurance company Magazine of insurance (published by icfai)

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