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COMPARATIVE ANALYSIS OF VARIOUS NAV

Introduction
LIFE INSURANCE

MEANING:
Life insurance is a contract providing for payment of a sum of money to the person assured or, failing him, to the person entitled to receive the same, on the happening of a certain event. A family is generally dependent for its food, clothing and shelter on the income brought by the familys breadwinner. The family is secure so long as this breadwinner is alive and is capable of earning his income. A sudden death (or inability) may leave this family in a financially difficult situation. Uncertainty of death is inherent in human life. This uncertainty makes it necessary to have some protection against the financial loss arising from death. And life insurance exactly offers this kind of protection.

ORIGIN:
The idea of insurance had emanated from out of the needs and desires of people to cover the likely losses to be suffered during a persons lifetime. Insurance was initially restricted to cover items other than for a persons life. Today insurance covers almost everything. Life insurance had commenced under framework of societies formed for purpose of giving service to the members in case of sickness, unemployment and premature deaths. Following a death, the need for immediate finance was felt to have a Decent funeral. Over a period of time, the financial loss due to the demise of the bread-earner was extended to cover future needs too. In the Indian context, the Aryans had perceived the idea of community insurance more than 3000 years ago, as would be evident from the Reeg Veda, in which the word Yogakshema was meant to suggest some form of communities had existed to help out family of the deceased in building a house, protecting the widow and also marrying off the girls.

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BRIEF HISTORY OF INSURANCE:
The business of insurance started with marine business. The first policy providing temporary life assurance cover for a period of 12 months was issued as early as 1583 A.D. in England. In India, Insurance began in 1870 with life insurance being transacted by an English company, the European and the Albert. The first Indian Insurance Company was the Bombay Mutual Assurance Society Ltd, formed in 1870. That was followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896 and the Empire of India in 1897. By the year 1956, when the life insurance business was nationalized and the Life Insurance Corporation of India (LIC) was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. By 31.03.2002, eleven new insurers had been registered and had begun to transact life insurance business in India.

NEED FOR INSURANCE:


When we consider some form of general insurance contracts like fire insurance, it presupposes the paramount need to have a protection through insurance. But it is not so simple to define financial loss following the loss of human life. In life insurance, the concept of indemnity is applied with some modifications. The concept of Human Life Value (HLV) helps us in determining the sum for which a person needs life insurance.

PRINCIPLES OF LIFE INSURANCE:


Life insurance policy is an evidence of contract between the insurer and the policy holder. Like any other contract, the policy has the following essential elements :

Offer and acceptance :


The proposal form is the other letter by the proposer and the insurer accepts it.

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Consideration
The proposer pays the premium to receive the reciprocal benefit of the claim money.

Capacity to contract :
The proposer has to fulfill certain eligibility conditions, e.g., he must be a major.

Consensus ad idem :
The proposer has to understand the implication of the plan, premium, etc. and the insurer must be equipped with all the necessary information regarding the proposer, so that there is no ambiguity regarding the terms of the contract.

Legality of the object or purpose :


The motive should be insurance in the true sense of the term and it should not have any element of wager or gambling.

Capability of performance :
The agent will have to have the ability to perform well.

Intention to create legal relationship :


Besides the general essentials of a valid contract, insurance involves two additional principles. They are (a)Principle of utmost good faith. (b)Principle of Insurable Interest

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ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT:
For Economic Development, investments are necessary. Investments are made out of savings. A Life Insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for Economic Growth. A Life Insurance Company will have large funds. These amounts are collected by way of premiums. Every premium represents a risk that is covered by that premium. In effect, therefore, these vast amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the policyholders. The management of Life Insurance Companies are required to keep this aspect in mind and make all its decisions in ways that benefit the community. This applies also to its investments. Their investments benefit the society at large. All good Life Insurance Companies have huge funds, accumulated through the payments of small amounts of premium of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. Apart from investments, business and trade benefit through insurance. Without insurance, trade and commerce will find it difficult to face the impact of major perils like fire, earthquake, floods, etc. Financiers, like banks, would collapse if the factory, financed by it, is reduced to ashes by a terrible fire. Insurers cover also the loss to financiers, if their debtors default.

ROLE OF INSURANCE IN SOCIAL SECURITY:


When the breadwinner of a family dies, to that extent, the familys income dies. The economic condition of the family is affected, unless other arrangement comes into

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being to restore the situation. Life insurance provides such an alternate arrangement. The lower strata create a cost on the society (a) Subsidies and doles and so on, and (b) Larger growth in population.

LIFE INSURANCE AND OTHER INVESTMENTS:


Most investment options make our money work harder, but they are not substitutes to life insurance. Because only a life insurance policy gives us both, risk cover as well as returns on savings. Needless to say, savings through life insurance guarantee full protection against the risk of death of the insured. It also allows long-term savings to be made in a relatively painless manner because of the low and convenient installments or premiums. Moreover, it encourages forced thrift which means the insured is made to pay his premiums and save his money which he might not do in the regular course of life. Should we require loans, say for building a house, they are easily obtained against an Insurance Policy. Amongst the most known benefits of life insurance is the saving on taxes. So, a life Insurance Policy is an ideal tool to gain security and ensure savings.

PURPOSE OF INSURANCE:
Insurance is income protection investment. The person you name as your beneficiary will receive proceeds from an insurance company. Insurance policies are always an intelligent decision while investing your hard-earned money. More than a tax saving instrument or an interest earning investment, an insurance policy is a guarantee that your loved ones would not have any financial difficulties in case any unfortunate incident happens to you. Insurance policies with high premium and low risk cover are similar to deposits and bonds.

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RISKS INVOLVED:
Most insurance policies carry relatively small risk because insurance companies are usually stable and are heavily regulated by government. In CASH VALUE policies you are allowed to invest your policy in stock, bond or money market funds. In these types of policies the value of your insurance depends on the performance of those funds.

STRENGHTS:
Insurance provides an excellent peace of mind in case unfortunate incident happens to you. Insurance policies are a relatively low risk investment. Insurance provides tax deferred savings and capital appreciation.

WEAKNESS:
Cash value funds can fluctuate depending on what the financial markets are doing. provides nominal income as it is less risky.

UNIT LINKED INSURANCE PLANS (ULIPs):


A Unit Linked Insurance Plan (ULIP) is one in which the customer is provided with a life insurance cover and the premium paid is invested in either debt or equity products or a combination of the two. In other words, it enables the buyer to secure some protection for his family in the event of his untimely death and at the same time provides him an opportunity to earn a return on his premium paid. In the event of insured persons untimely death, his nominees would normally receive an amount that is the higher of the sum assured or the value of the units (investments). Unit-Linked Life Insurance products are those where the benefits are expressed in terms of number of units and Unit Price. They can be viewed as a combination of Insurance and Mutual Funds. The number of units, which the customer would get depends on the unit price

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when he pays his premium. The daily Unit Price is based on the market value of the underlying assets ( equities, bonds, government securities, etc) and computed from the NET ASSET VALUE (NAV) ULIPs also offer flexibility. For instance, a policyholder can ask the insurance company to liquidate units in his account to meet the mortality charges if he is unable to pay any premium installment. This eats into his savings, but ensures that the policy will continue to cover his life.

ULIPs ( key features) :


Premiums paid can be single, regular or variable. The payment period too can be regular or variable. The risk cover can be increased or decreased. As in all insurance policies, the risk change (mortality rate) varies with age. The maturity benefit is not typically a fixed amount and the maturity period can be advanced or extended. Investments can be made in gilt funds, balanced funds, money market funds, growth funds or bonds. The policy holder can switch between schemes, for instance, balanced to debt or gilt to equity, etc. The maturity benefit is the Net Asset Value (NAV) of the units. The costs in ULIP are higher because there is a life insurance component in it as well, in addition to the investment component. Insurance companies have the discrete to decide on their investment portfolios. They are simple, clear, and easy to understand. Lead to an efficient utilization of capital. ULIP products are exempted from tax and they provide life insurance. Provides capital appreciation. Investor gets an option to choose among debt, balanced and equity funds.

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Objective / purpose of investing in ULIPs:
Investment in ULIP by the investors is mainly for tax relief (33%) and returns (30%). Investors in the age group of 21-30 mainly invest for tax relief and returns. It is same even for the investors in the age group of 41-55. Most of the salaried people invest in ULIP for the purpose of returns and as a tool for tax relief and benefits. Investing in ULIP as a purpose of liquidity investment is same for professionals, salaried and also for business people. Investors whose monthly income is less than Rs.10,000 are not interested in investing in ULIP, this may be because of other investment that they have already made. Investors monthly income between Rs.20,001 and Rs.30,000 has equal importance for returns, protection for dependents and tax relief.

Insurance Sector Reforms:


The Insurance Sector in India has gone through the process of reforms during 1990s and in the current decade. The reforms are based on the recommendations of different committees especially Malhotra Committee. Accordingly the Insurance Regulatory Development Authority (IRDA) was set up as a statutory body in April 2000. This body is vested with the framing of regulations and registering the private sector insurance companies. The insurance sector was opened up to the private sector in August 2000. As a result some Indian and Foreign private companies have entered the insurance business and have been in the process of building up their empire. There are about 14 general insurance and 21 life insurance companies operating in the current private sector category.

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Some of the private Life Insurance Companies in India are listed below:
Life Insurance Companies Aviva Life Insurance Bajaj Allianz Life Insurance Birla Sun-Life Insurance HDFC Standard Life Insurance ING Vysya Life Insurance Max New York Life Insurance MetLife Insurance Om Kotak Mahindra Life Insurance Life Insurance Corporation Reliance Life Insurance Sahara India Life Insurance SBI Life Insurance TATA AIG Life Insurance

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MUTUAL FUND:
A Mutual Fund is an actively managed investment company that collects money from individuals and institutions, which share a common financial goal. A mutual fund raises money from investors to invest in stocks, bonds, and other securities. It is a package made up of several individual investments. A mutual fund is a type of investment vehicle where investors pool their money in order to allow each investor participate in a portfolio of securities. The individual investor doesn't actually own each security but instead, he owns shares of the mutual fund. The main benefit of a mutual fund is that it provides a way for the investor to achieve diversification in his investments without having to invest a lot of money. The first mutual fund was the Massachusetts Investors Trust introduced in 1924. At the end of its first year, the fund had 200 investors with $63,600 in assets. At the end of 1995, the fund grew to 73,500 investors with assets totaling $1.8 billion! Now there are over 7000 different mutual funds available for you to choose from. Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns.

Diversification:
Diversification is nothing but spreading out your money across available or different types of investments. By choosing to diversify respective investment holdings reduces risk tremendously up to certain extent. The most basic level of diversification is to buy multiple stocks rather than just one stock. Mutual funds are set up to buy many stocks. Beyond that, you can diversify even more by

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purchasing different kinds of stocks, then adding bonds, then international, and so on.

Basics of Mutual Funds:


Most Mutual Funds invest in one or more of the three major financial asset classes:

Stocks:
Stocks represent shares of ownership in a public company. Examples of public companies include Reliance, ONGC and Infosys. Stocks are considered to be the most common owned investment traded on the market.

Bonds:
Bonds are basically the money which you lend to the government or a company, and in return you can receive interest on your invested amount, which is back over predetermined amounts of time. Bonds are considered to be the most common lending investment traded on the market. There are many other types of investments other than stocks and bonds (including annuities, real estate, and precious metals), but the majority of mutual funds invest in stocks and/or bonds.

Money Market Instruments:


Money Market Instruments are short-term debt securities issued by governments, corporations, banks or other financial institutions. They typically must be repaid within one year, often in 90 days or less. With such short maturity periods, prices of money market instruments are generally more stable than prices of long-term debt securities. However money market securities pay less interest than long-term bonds. Treasury Bills and Certificate of Deposits (CDs) are two commonly used money market instruments.

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NET ASSET VALUE:
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual Funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. The NAV per unit is the market value of the securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs.200 lakhs and the mutual fund has issued 10 lakhs units of Rs.10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis-daily or weekly depending on the type of the scheme.

SELECTION OF A MUTUAL FUND:


Unfortunately, there's no one size fits all strategy when it comes to any type of investing. You need to take into consideration what your needs are and what your future financial goals are. When choosing a mutual fund you should first get a prospectus then, call the fund company. In many cases, the prospectus is available right on the company's website. Mutual fund investors would be well advised to consider the fund prospectus, the fund manager, and the current market conditions. Never rely on last year's top performers. Hence, mutual funds are a way for investors to diversify their risk and still benefit from professional money management. The prospectus identifies key information about the mutual fund including its operating boundaries and its costs. The fund manager operates within those boundaries and is important in order to achieve good results within those boundaries.

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TYPES OF MUTUAL FUND SCHEMES IN INDIA:
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has variety of flavors. Being a collection of many stocks, an investor can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned below.

Overview of existing schemes existed in mutual fund category: by structure 1.Open - Ended Schemes:
An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asse Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes: A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. 3. Interval Schemes: Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

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Overview of existing schemes existed in mutual fund category: by nature 1. Equity Funds:
These funds invest a maximum part of their corpus into equities holdings. The structure

of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.

2. Debt funds: The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds:
Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds:
Invest a major portion into various debt instruments such as bonds, corporate debentures and
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Government securities.

Short Term Plans (STPs):


Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds:
Also known as Money Market Schemes, these funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds. 3. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds.

Objective of investing in Mutual Funds:


Most of the investors purpose of investing in mutual fund is because it is professionally managed (34%). Investors main objective here is to get returns. Investors in the age group of 41-55 invest with the objective of good returns and also for tax relief. Post Graduates invest in Mutual Funds because they are professionally managed and have good returns (17%). Investment in Mutual Fund as a liquidity instrument is very less among investors. Graduates invest in Mutual Funds because the funds are professionally managed and have good returns (14%).

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An investor can choose the fund on various criteria according to his investment objective. A few of them are:
Thorough analysis of fund performance of schemes over the last few years managed by the fund house and its consistent return in the volatile market. The fund house should be professional, with efficient management and administration. The corpus fund is holding in its scheme over the period of time. Proper adequacies of disclosures have to seen and also make a note of any hidden charges carried by them. The price at which you can enter/exit (i.e. entry load / exit load) the scheme and its impact on overall return.

RISK RETURN:
Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Schemes objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets.

TYPES OF RETURNS:
There are three ways, where the total returns provided by mutual funds can be enjoyed investors: Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution. If fund holdings increase in price but are not sold by the fund manager, the fund's shares by

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increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares.

Pros (advantages) of Investing in Mutual Funds: Professional Management :


The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments.

Diversification :
Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.

Economies of Scale :
Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors.

Liquidity :
Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want.

Simplicity :
Investment in mutual fund is considered to be easy, compare to other available

instruments in the market, and the minimum investment is small.

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Cons (disadvantages) of Investing in Mutual Funds: Professional Management :
Some funds doesnt perform in neither the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor himself, for picking up stocks.

Costs :
The biggest source of AMC income is generally from the entry & exit load which they charge from investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon.

Dilution :
Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.

Taxes :
When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.

Regulating Authorities of Mutual Funds:


To protect the interest of the investors, Securities and Exchange Board of India (SEBI) formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully

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revised in 1996) and issues guidelines from time to time. MF either promoted by public or by private sector entities including one promoted by foreign entities is governed by these Regulations. SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework. Its objective is to increase public awareness of the mutual fund industry. AMFI also is engaged in upgrading professional standards and in promoting best industry practices in diverse areas such as valuation, disclosure, transparency etc.

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INDUSTRY PROFILE
INTRODUCTION:
The Insurance sector in India governed by Insurance Act, 1938, The Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972 Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related acts. With such a large population and the untapped market area of this population insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15 - 20% annually. Together with banking services, it adds about 7% to the countrys GDP. In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life Insurance cover and the Health Insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the Government in 1993 to examine the various aspects of the industry. The key element of the reform process was participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes. The competition LIC started facing from these companies were threatening to the existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

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Life is a roller coaster ride and is full of twists and turns. You cannot take anything for granted in life. Insurance policies are a safeguard against the uncertainties of life. Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance policy helps in not only mitigating risks but also provides a financial cushion against adverse financial burdens suffered.

What Is Insurance?

Insurance is a contract between two parties, the insurer or the insurance company, and the insured, the person seeking the cover. Within this contract, the insurer agrees to pay the insurer for financial losses arising out of any unforeseen events or risk in return for a regular payment of premium. Thus, these insurance plans are also called as a Risk Cover Plans, which means to financially compensate for losses that occur uncertainly through accident, illness, theft, natural disaster. As you can not fight against these man-made and natural calamities, so at least be prepared for them and their aftermath by taking insurance policies.

Insurance - Kind of Investment:


Insurance is an attractive option for investment but most people are not aware of its advantages as an investment option. Remember that first and foremost, insurance is about risk cover and protection. By buying life insurance, you buy peace of mind. Insurance also serves as an excellent tax saving mechanism. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets.

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Types of Insurance
Insurance policies cover the risk of life as well as other assets and valuables, such as, home, automobiles, jewelry et al. On the basis of the risk they cover, insurance policies can be classified into two categories: Life Insurance and General Insurance. As the term suggests, Life Insurance covers the risk involved in a person's life, while General Insurance provides financial protection against unforeseen events, like accident, flood, earthquake, disease, etc.

Insurance Regulatory & Development Authority:


Insurance Regulatory & Development Authority is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry.

Insurance Regulatory & Development Authority:


Insurance Regulatory & Development Authority is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry. It is basically a ten members' team comprising of a Chairman, five full time members and four part-time members, all appointed by Government of India. This organization came into being in 1999 after the bill of IRDA was passed in the Indian parliament.

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Powers and Functions of IRDA
It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations.

It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract. It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business.

One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re-insurance business is also a major duty of IRDA.

IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries and other organizations related to the insurance sector. It is also concerned with the regulation of the rates, profits, provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee. It is also entitled to supervise the functioning of the Tariff Advisory Committee. IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators.

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It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency. It is also empowered to be involved in the arbitration of disagreements between insurers and intermediaries or insurance intermediaries. It is meant to specify the proportion of premium income of the insurer to finance policies.

IRDA also specifies the share of life insurance business and general insurance business to be accepted by the insurer in the rural or social sector.

Impact of IRDA on Indian Insurance Sector:


The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years of its establishment the insurance sector has seen tremendous growth. When IRDA came into being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC), however in last decade 23 new players have emerged in the filed of insurance. The IRDA also successfully deals with any discrepancy in the insurance sector.

HISTORY OF INSURANCE SECTOR:


The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360- degree turn witnessed over a period of almost 190 years. The business of life insurance in India its existing form started in India in the year 1818 with the establishment of the oriental Life Insurance Company in Calcutta.

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The business of Life Insurance in India in its existing form started in India in the year 1818 with the establishment of the oriental Life Insurance Company in Calcutta. Some of the important milestones in the Life Insurance Business in India are given in the table 1.

Table 1: Milestones in the Life Insurance Business in India:


Year 1912 Milestones in Life Insurance Business in India The Indian Life Insurance Companies Act enacted as the first statue to regulate the Life Insurance Business 1928 The Indian Life Insurance Companies Act enacted to enable the government to collect statistical information about both Life and Non-life insurance business. 1938 Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interest of the insuring public. 1956 245 Indian and foreign insures and provident societies taken over by the central government and Nationalized. LIC formed by an act of parliament, viz. LIC Act, 1956 with a capital contribution of Rs. 5 crore from the government of India.

The General Insurance Business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd. The first general insurance company established in the year 1850 in Calcutta by the British. Some of the important Milestones in the general insurance business in India are given in the table 2.

Table 2: Milestones in the general insurance business in India


Year 1907 Milestones in the general insurance business in India

The Indian Mercantile Insurance Ltd. set up the first company to transact all classes o general insurance business.

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1957

General Insurance Council, a wing of the Insurance Association of India, frames a cod of conduct for ensuring fair conduct and sound business practices.

1968

The Insurance Act amended to regulate investments and set minimum solvenc margins and the Tariff Advisory Committee set up.

1972

The General Insurance Business (Nationalization) Act, 1972 nationalized the genera

insurance business in India which effect from 1st January 1973. 107 insure

amalgamated and grouped into four companies viz. the National Insurance Compan

Ltd. The New India Assurance Company Ltd. The oriental Insurance Company Ltd And the United India Insurance Company Ltd. GIC incorporated as a company.

History of insurance in India:


Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operation in India. Triton insurance company limited was the first General Insurance company to have established in India in 1850, whose share were mainly held by the British. The first General insurance company to be set up by an Indian was Indian Mercantile insurance company limited which was established in 1907. There emerged many a player on the Indian scene thereafter. The General Insurance 3 Business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The General Insurance Corporation of India and its 4 subsidiaries undertook the post-nationalization general insurance business: 1. Oriental Insurance Company Limited. 2. New India Assurance Company limited. 3. National Insurance Company Limited. 4. United India Insurance Company Limited.

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Towards the end of 2000, the relation ceased to exist and the four companies are at present, operating as independent companies. The Life Insurance Corporation (LIC) was established on 1-09-1956 and had been the sole corporation to write the life insurance business in India. The Indian insurance industry saw a new sun when the Insurance Regulatory and Development Authority (IRDA) invited the applications for registration as insures in August 2000. With the liberalization and opening up the sector to private players, the industry has presented promising prospects for the coming future. The transition has also resulted into introduction of ample opportunities for the professional including chartered Accountants. The Indian life and non-life insurance business accounted for merely 0.42 percent of the worlds life and non- life business in 1997. The life insurance industry registered 51 percent growth in 2003-2004, significantly adding to the now globally visible glow of our economy.

Insurance Market-Present:
The insurance sector was opened up for private participations four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic charges which includes presence of a fairly large number of insures both life and non-life segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market 14 private insurers, nine private non life insurers and six public sector companies. With many more joint venture in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario.

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There is pressure from both within the country and outside on the Government to increase the Foreign Direct Investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. There are opportunities in the pensions sector where regulations are being framed. Less than 10% of Indians above the age of receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new it matures and new players enter, product innovation and enhancement will increase. The depending of the health database over time will also allow players to develop and price products for larger segment of society.

State Insurers Continue To Dominate:


There may be room for many more players in a charge under insured market like India with a population of over one billion. But the reality is that the intense competition in the last five years has made it difficult for new entrants to keep pace with the leaders and there by failing to make any impact in the market. Also as the private sector control over 26.18% of the life insurance market and over 26.53% of the non - life market, the public sector companies still call the shots. The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a share of 74.82% in the new business premium income in November 2005. Similarly, the four public- sector non-life insures New India Assurance, National Insurance, oriental Insurance and United India Insurance had a combined market share of 73.47% as of October 2005. ICICI Prudential Life Insurance Company continues to lead the private sector with a 7.26% market share in terms of fresh premium, whereas ICICI Lombard General Insurance Company is the leader among the private non-life players with an 8.11%

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market share. ICICI Lombard has focused on growing the market for general insurance products and increasing penetration within existing customers through product innovation and distribution.

Reaching out to customers:


No doubt, the customer profile in the insurance industry is changing with the introduction of large number of divergent intermediaries such as broker, corporate agent and bank assurance. The industry now deals with customers who knows what they want and when, and are more demanding in terms of better service and speedier responses With the industry all set to move to a detariffed regime by 2007, there will be considerable improvement in customer service level, product innovation and newer standards of under writing

Intense competition:
In a de-tariffed environment, competition will manifest itself in prices, products, underwriting criteria, innovative sales and credit worthiness. Insurance company will vie with each other to capture market share through batter pricing and client segmentation. The battle has so far been fought in the big urban cities, but in the next few years, increase competition will drive insurers to rural and semi-urban markets.

Global standards:
While the world is eyeing India for growth and expansion, Indian company are becoming increasingly world class. Take the case of LIC, which has set its site on becoming a major global player following a 280crore investment from the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, and Nepal and will soon start operation in Saudi Arabia. It also plans to venture into the African and Asia-Pacific regions in 2006.
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The year 2005 was a testing phase for the general insurance industry with a series of catastrophes hitting the Indian sub-continent. However, with robust reinsurance programme in place, insurers have successfully managed to tide over the crisis without any adverse impact on their balance sheets. With life insurance premiums are being just 2.5% of GDP and general insurance premiums being 0.65% of GDP. The opportunity in the Indian market place is immense. The next 5 year will be challenging but those that can build scale and market share will.

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COMPANY PROFILE
INTRODUCTION:
Established on 14th August 2000, HDFC Standard Life Insurance Co. Ltd. is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited) - India's leading housing finance institution, and a Group Company of the Standard Life Plc, UK. The Company is one of leading private insurance companies, offering a range of individual and group insurance solutions, in India. Being a joint venture of top financial services groups, HDFC Standard Life has adequate financial expertise to manage long-term investments safely and resourcefully.

HDFC Standard Life Insurance offers a range of individual and group solutions, which can be easily personalized to specific needs. Its group solutions have been planned to offer complete flexibility, together with a low charging structure. As of 31 December, 2008, the Company's new business premium income stood at Rs. 1,839.70 Crores; it has covered over 812,811 lives so far.

The partnership:
HDFC Standard Life first came together for a possible joint venture, enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar value and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 years joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

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The next three years were filled with uncertainty ,due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture. In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the service of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.

Vision, Mission & Values of HDFC Standard Life Insurance Ltd.


Vision:
'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. 'The most obvious choice for all'.

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Mission:
To be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like Customer service of the highest order Value for money for customer professionalism in carrying out business. Innovative products to cater to different need of different customers, Use of technology to improve service standards Increasing market share. Their mission is to be the best new life insurance company in India and these are the values that will guide the country.

Values:
SECURITY: Providing long term financial security to our policy holders will be our constant Endeavour. We will be do this by offering life insurance and pension products.

TRUST: We appreciate the trust placed by our policy holders in us. Hence, we will aim to manage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customer, we will be offering a range of innovative products to meet these needs.

Values that we observe while we work:


Integrity Innovation Customer centric People Care One for all and all for one Team work

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Joy and Simplicity

Goals of the Company:


Emerge as transactional Life Insurer of global scale and standard. Achieve impeccable reputation and credentials through best business practices.

Guiding Principles:
Customer Care and Satisfaction. Corporate Governance. Creativity and Innovation. Competitiveness.

COMPETITORS:
Life Insurance Companies Aviva Life Insurance Bajaj Allianz Life Insurance Birla Sun-Life Insurance HDFC Standard Life Insurance ING Vysya Life Insurance Life Insurance Corporation Max New York Life Insurance

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MetLife Insurance Om Kotak Mahindra Life Insurance Reliance Life Insurance Sahara India Life Insurance SBI Life Insurance

TATA AIG Life Insurance

ORGANISATION STRUCTURE

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B.O.D C.E.O

Chief Finance Officer Zonal Finance Manager Senior Branch Supervisor

National Sales Manager Zonal Manager

Chief Administration Officer


Zonal Administration Officer

Branch Manager

Senior Branch Supervisor Asst. Branch Supervisor Administrative Executive

Finance Officer

Business Dept. Manager Sales Team Manager

Finance Executive

Insurance consultants

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POLICIES AND PRODUCTS:
Given below is a comprehensive list of policies and products on offer by HDFC Standard Life Insurance:

Protection Plans:
HDFC Term Assurance Plan HDFC Loan Cover Term Assurance Plan HDFC Home Loan Protection Plan

Children's Plans:
HDFC Children's Plan HDFC Unit Linked Young Star II HDFC Unit Linked Young Star Plus II HDFC Unit Linked YoungStar Champion

Retirement Plans:
HDFC Personal Pension Plan HDFC Unit Linked Pension II HDFC Unit Linked Pension Maximiser II HDFC Immediate Annuity

Savings & Investment Plans:


HDFC Unit Linked Endowment Plus II HDFC SimpliLife HDFC Unit Linked Endowment II

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HDFC Unit Linked Enhanced Life Protection II HDFC Unit Linked Wealth Maximiser Plus HDFC Unit Linked Endowment Winner HDFC Endowment Assurance Plan HDFC Money Back Plan HDFC Single Premium Whole of Life Insurance Plan HDFC Assurance Plan HDFC Savings Assurance Plan

Health Plans:
HDFC Critical Care Plan HDFC SurgiCare Plan

Group Plans:
Group Term Insurance Plan Group Variable Term Insurance Plan Group Unit Linked Plan - Gratuity Group Unit Linked Plan - Superannuation Group Unit Linked Plan - Leave Encashment HDFC Standard Life believes that establishing a strong and ethical foundation is an essential prerequisite for long-term sustainable growth. To ensure this, we have concentrated our focus on expansion of branch network, organising an efficient and well trained sales force, and setting up appropriate systems and processes with optimum use of technology. As all these areas form the basic infrastructure for establishing the highest possible customer service standards.

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Our core values are drilled down to all levels of employees, as these are inviolable. We continue to promote high integrity in business practices and shun short cuts and unethical practices, as we wish to be perceived as an institution with high moral standing. Since our inception in 2000, when the Indian insurance space was opened for private participation, we have consistently focused on setting benchmarks in all aspect on insurance business. Being the first private player to be registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators are:

Strong Promoter:
HDFC Standard Life is a strong, financially secure business supported by two strong and secure promoters HDFC Ltd and Standard Life. HDFC Ltds excellent brand strength emerges from its unrelenting focus on corporate governance, high standards of ethics and clarity of vision. Standard Life is a strong, financially secure business and a market leader in the UK Life & Pensions sector.

Preferred and Trusted Brand:


Our brand has managed to set a new standard in the Indian life insurance communication space. We were the first private life insurer to break the ice using the idea of self-respect instead of death to convey our brand proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that customers recognize, like and prefer to do business. Moreover, our brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.

Investment Philosophy:
We follow a conservative investment management philosophy to ensure that our customers money is looked after well. The investment policies and actions are regularly monitored by a

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formal Investment Committee comprising non-executive directors and the Principal Officer & Executive Director. As a life insurance company, we understand that customers have invested their savings with us for the long term, with specific objectives in mind. Thus, our investment focus is based on the primary objective of protecting and generating good, consistent, and stable investment returns to match the investors long-term objective and return expectations, irrespective of the market condition.

Need Based Selling Approach:


Despite the criticality of life insurance, sales in the industry have been characterized by over reliance on tax benefits and limited advice-based selling. Our eight-step structured sales process Disha however, helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in the industry, looks at the whole financial picture. Customers see a plan not piecemeal product selling.

Risk Control Framework


HDFC Standard Life has fully implemented a risk control framework to ensure that all types of risks (not just financial) are identified and measured. These are regularly reported to the board and this ensures that the company management and board members are fully aware of any risks and the actions taken to ensure they are mitigated

Focus on Training
Training is an integral part of our business strategy. Almost all employees have undergone training to enhance their technical skills or the softer behavioural skills to be able to deliver the service standards that our company has set for itself. Besides the mandatory training that Financial Consultants have to undergo prior to being licensed, we have developed and

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implemented various training modules covering various aspects including product knowledge, selling skills, objection handling skills and so on.

Focus on Long term Value


HDFC Standard Life do not focus in the business of ramping up the topline only, but to create maximisation of stakeholder's value. Today, we are extremely satisfied with the base that we have created for the long-term success of this company. Transperent Dealing We are one of the few companies whose product details, pricing, clauses are clearly communicated to help customers take the right decision.

Diversified Product Portfolio


HDFC Standard Lifes wide and diversified product portfolio help individuals meet their various needs, be it: Protection: Need for a sound income protection in case of your unfortunate demise Investment: Need to ensure long-term real growth of your money Savings: Save for the milestones and protect your savings too Pension: Need to save for a comfortable life post retirement Health: Cover for health related exigencies

NATURE OF INVESTMENT / RISK AND RETURN CATEGORY: Equity funds:


Primary invested in company stock with a general aim of capital appreciation. Risk and Return: Medium
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Income, Fixed Interest and Bond Funds:
Invested in corporate bonds, Govt. securities and other fixed income instrument Risk and Return: Medium

Cash Funds :
Some times known as money market funds invested in cash, Bank deposits and money market instruments. Risk and Return: Low

Balanced Funds:
Combining equity investment with fixed interest in the instrument. Risk and Return: Medium

CHARGES OF HDFC STANDARD LIFE INSURANCE COMPANY:


HDFC Standard Life Insurance follows the method of cancelling the units in order to recover the charges. Some of the charges are:

CHARGES: PREMIUM ALLOCATION CHARGE:


This is a premium based charge, after deducting this charge from your premiums, the reminders is invested to buy units. The table given below will help show how percentage of premium will help to buy units. This % is called the allocation rate. The allocation rates are guaranteed for the entire duration of the policy term.

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Premium paid during years Allocation rate 1st & 2nd Year Regular premiums Up to 1,99,999 70% 99% Onwards 3 rd Year onwards

From 2,00,000 to 4,99,999

80%

99%

From 500,000 to 9,99,999

85%

99%

From 10,00,000 to 19,99,999

90%

99%

From 20,00,000 to above

95%

99%

Single premium top ups

97.5%

99%

Fund management charge (FMC):


In the long term the key to build great maturity values is a low FMC. The daily unit price already increase our low fund management charge of only o.8% per annum of the funds value. Surrender charge: This is the charge we will apply when the policy is surrendered. It is equal to 30% of the difference between the regular premiums expected and received in the first two years of the contract.

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Other charges:
The following is the set of other charges that we will take from your policy. Charges Policy administration charge Explanation A charge of Rs. 20 per month is charged to cover regular administration costs. We take the charge by cancelling units proportionately from each of the funds you have chosen. Mortality and other risk Every month we make a charge for providing you with the death or critical illness cover in your policy. The amount of the charge taken each month depends on your age. We take the charge by cancelling units

benefit charges

proportionately from each of the funds you have chosen. Switching charge 24 switches will be given free in a policy year and any additional switch will be charged at Rs. 100 per switch. Partial withdrawal Charge 6 partial withdrawal requests will be free in a policy year and any additional partial withdrawal requests will be charged at Rs. 250 per request. Revival charge A charge of Rs. 250 is for revival to cover for administration expenses. Miscellaneous charge This is a charge levied for any alterations within contract like premium redirection or adhoc policy servicing, 12 premium redirection requests will be free in a policy year any premium redirection requests will be charge at 250 per request, 6 policy servicing requests will be free in a policy year and any additional policy Servicing requests will be charged at Rs.250 per request.

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Service tax and education is payable at the applicable rates on the mortality and other risk benefit charges.

Alteration charges:
Current charges cannot be charged without prior approval from IRDA. The fund management charge cannot exceed 2% per annum. The surrender charge can be increased subject to a maximum of 10% of the fund applicable for the first 3 years. The policy administration charge can increase in line with inflation subject to a maximum of 5% per annum over the period since inception. The mortality charge rates and accidental death benefit charge rate are guaranteed for full duration of your policy term and critical illness charge rates can be reviewed at the end of every 3 years from date of launch of this product. And can be increased subject to a maximum increase 200% of every rate. The maximum switching charge allowed is Rs. 100 per switch increased in line with inflation subject to a maximum of 5% per annum over period since inception. We can charge up to Rs. 250 per request for premium redirection, partial withdrawal and other adhoc policy servicing requests. We can increase this amount in line with inflation subject to a maximum of 5% per annum over the period since inception.

Parentage HDFC Limited


HDFC Limited, Indias premier housing finance institution has assisted more than 3.3 million families own a home, since its inception in 1977 across 2400 cities and towns through
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its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India. As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores. The corporation has a deposit base of Rs. 17,551 crores, earning the trust of more than 9,00,000 depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies.

Standard Life Group (Standard Life plc and its subsidiaries)


The Standard Life Group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs. Its investment manager currently administers 125 billion in assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.

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HDFCSL Milestone
Received the PCQuest Best IT Implementation Award 2008 for Consultant Corner, the applications for its financial consultants, providing centralized control over a vast geographical spread for key business units such as inventory, training, licensing, etc. Received the 2008 CIO Bold 100 Award for its mobile workforce portal and the Special 2008 CIO Security Award for a secure computing environment, including identity management respectively. Mr. Deepak M Satwalekar Awarded QIMPRO Gold Standard Award. HDFCSL expanded its reach in the Bancassurance channel by arrangements with co-operative banks in the rural areas. Continued to increase its focus on quality service, by putting in place a robust mechanism to capture Voice of the Customer through service audits across its offices. This was complemented by use of technology that enabled capture of all interactions with customers across all touch points Sar Utha Ke Jiyo was honoured as Among Indias 60 Glorious Advertising Moments. The advertisements of the company were ranked 6th amongst The 10 most effective Advertisements in September 2007. Received the PCQuest Best IT Implementation Award 2007 for Wonders, its path-breaking implementation of an enterprise-wide workflow system. In addition the company also bagged the EMC storage award for being the most innovative users of storage and storage management. Pension Plan Tops Mints Survey of Best TV Ads.

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HDFC Standard Lifes advertising created high awareness for the brand and bagged 2 silver and 1 bronze awards at the ADFEST 2007 National Awards organised by the Advertising Agencies Association of India (AAAI). The 3 awards are the highest won by any single brand in the financial services business (including banking, mutual fund, insurance and other financial services). Ranked 29th most trusted Indian Brands amongst the Top 50 Service Brands of 2006 according to a study conducted by the Brand Equity Economic Times, the leading business publication of India.

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Research design
INTRODUCTION:
A Research Design is a logical and systematic plan prepared for directing a research study. It specifies the objectives of the study, the methodology and the techniques to be adopted for achieving the objectives. It constitutes the blueprint for the collection, measurement and analysis of data. It is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions. A research design is the program that guides the investigator in the process of collecting, analyzing and interpreting observation. It provides a systematic plan of procedure for the researcher to follow. It is indispensable for a research project.

STATEMENT OF THE PROBLEM:


To ascertain the performance of the different Unit Linked Insurance Plans of the company based on the various NAV (Net Asset Value) schemes and also to find out the factors which exert a strong influence on the changes in NAV.

TITLE OF THE STUDY:


Comparative analysis of various NAV (Net Asset Value) schemes of HDFC STANDARD LIFE for the past three (3) years and the factors influencing the changes in NAV.

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SCOPE OF THE STUDY:
The study basically tries to identify the various investment break-ups for the different Unit Linked Insurance Plans of the company. It will clearly show the different investment funds available with the company for the investors to make an investment on the same. The study will also help an investor to direct his investments in the companys unit linked funds, which offer investments of different types such as Fixed Income (eg. Government securities, Company debentures, etc.) and, equities (i.e. shares) which range from potentially high-risk-high-return to potentially low-risk-low-return to match the investors risk taking ability.

The study will reflect the portfolio break-up of the different funds of the company. It will also develop a comparative analysis of the various NAV schemes and hence, offer suggestions to the investors for directing their investment which would fetch them with maximum yield.

OBJECTIVES OF THE STUDY:


To portray the exact principles and role of insurance in the current scenario. To study the different life insurance plans of the company. To analyze the investment break-ups in the various schemes of the company. To generate an analysis of the various NAV schemes of the company with respect to the available plans. To examine the different factors which exert a strong influence on the changes in NAV.

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OPERATIONAL DEFINITIONS:

INSURANCE:
It is a contract providing for payment of a sum of money to the person assured or, failing him, to the person entitled to receive the same, on the happening of a certain event.

MUTUAL FUND:
A Mutual Fund is an actively managed investment company that collects money from individuals and institutions, which share a common financial goal. A mutual fund raises money from investors to invest in stocks, bonds, and other securities. It is a package made up of several individual investments.

NET ASSET VALUE (NAV) :


The NAV is simply a measure of the current dollar value of one share of a mutual fund. It is the funds assets minus its liabilities divided by the number of outstanding shares, calculated at the end of each business day. According to the Securities Exchange Board of India (SEBI),

NET ASSETS OF SCHEME NAV = NUMBER OF OUTSTANDING UNITS


The performance of a particular scheme of a mutual fund is determined by its net asset value.

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SOURCES:
The sources of data may be classified into: (a) Primary Sources. (b) Secondary Sources.

PRIMARY SOURCES:
Primary Sources are original sources from which the researcher directly collects data that have not been previously collected. Primary data are first-hand information collected through various methods such as observation, interviewing, etc. Here, the primary data is collected as follows: (a) Interview with the Sales Manager. (b) Discussions with other personnel such as advisors and trainers.

SECONDARY SOURCES:
These are sources containing data which have been collected and compiled for another purpose. The secondary sources consists of readily available compendia and already compiled statistical statements and reports whose data may be used by researchers for their studies. These data are not collected directly as in case of primary sources. Here, the secondary data is obtained from: Brochures. Different books on mutual funds and insurance. Internal circulatory documents of the company. Website of the company.

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METHODOLOGY:
Methodology refers to a set of methods and principles used to perform a particular activity. Here, an analytical study is done. i.e., analysis is being done on the different unit linked insurance plans of the company by studying its various NAV schemes. Here, the main aim of the research is to analyze the NAV schemes of the company for the past three years (i.e.,2006, 2007& 2008) on a quarterly basis and hence, study the factors which exert a strong influence on the changes in NAV. Primary and Secondary data gathering methods are used for the purpose of the research.

TOOLS FOR DATA:


The analysis is done with the help of statistical tools, tables and graphs like Bar Diagrams and Pie Charts.

LIMITATIONS OF THE STUDY:


Findings of the study are only confined to HDFC STANDARD Life Insurance Company Ltd. The analysis and interpretation part of the study is based only on the internal reports of the Company. The study is limited to the extent of available data only.

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CHAPTER SCHEME: 1. INTRODUCTION
Life Insurance: meaning, origin, history, need, principles, role in economic development & social security, life insurance and other investments, purpose, risks involved, strengths & weaknesses. Unit Linked Insurance Plans: meaning, key features, objective of investing in ULIPs, Insurance sector reforms, listing of private Life Insurance Companies in India. Mutual Funds: meaning, diversification, components, selection of a Mutual Fund, types of Mutual Fund schemes, risk return, meaning of Net Asset Value or NAV, pros & cons of investing in Mutual Funds, regulating authorities of Mutual Funds.

2. INDUSTRY PROFILY 3. COMPANY PROFILE 4. RESEARCH DESIGN


Introduction, Statement of the problem, Title of the study, Scope of the study, Objectives of the study, Operational definitions of Insurance, Mutual Fund & Net Asset Value or NAV, Sources of data, Methodology, Tools for data, Limitations of the Study.

5. ANALYSIS & INTERPRETATION


The data collected for the past three (3) years has been tabulated on a quarterly basis and an analysis has been drawn based on the various Net Asset Values of the different Investment Funds with respect to the available Units Linked Insurance Plans of the company. Also, a brief description of the factors influencing the changes in NAV is given at the end of this part.

6. FINDINGS

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This chapter consists of the summary of findings.

7. SUGGESTIONS
This chapter consists of the suggestions that have been made for the improvement of overall performance of the company.

8. CONCLUSION
This chapter of the study where a conclusion has been drawn based on the findings of this report.

9. BIBLIOGRAPHY 10. ANNEXURE

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Analysis & interpretation


PORTFOLIO DETAILS OF HDFC STANDARD LIFE INSURANCE:
An HDFCSLIC portfolio detail gives you an insight into the asset allocation, fund performance, equity break up as follows:

1. Unit Linked Pension Champion: Growth Fund as on 30/NOV/2009 Portfolio break-up by asset class:

Govt. securities & bonds Money Market &Public Deposits Equity

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COMPARATIVE ANALYSIS OF VARIOUS NAV


2. Unit Linked Pension Champion:
Balanced Managed Fund as on 30/NOV/2009 Portfolio break-up by asset class:

Govt. Securities &Bonds Money Market &Public Deposits Equity

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COMPARATIVE ANALYSIS OF VARIOUS NAV


3. Unit Linked Pension Champion:
Secure Managed Fund as on 30/NOV/2009 Portfolio break-up by asset class:

Govt.Securities &Bonds Money Market &Public Deposits Equity

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COMPARATIVE ANALYSIS OF VARIOUS NAV


4. Unit Linked Pension Champion:
Defensive Managed Fund as on 30/NOV/2009: Portfolio break-up by asset class:

Govt. Securities & Bonds Money Market & Public Deposits Equity

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1.1 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES: PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

GROWTH FUND (NAV in Rs.)

March 2007

11.35

June 2007

12.29

September 2007

13.91

December 2007

14.71

INTERPRETATION:
The above table clearly reveals that the NAV of the Growth Fund as on 31.03.2007 was Rs.11.35 for the schemes Pension champion, Endowment plan & Simple life. After that it increased considerably over the months and, at the end of the year (i.e. on 31st Dec, 2007) it raised to Rs.14.71. Hence, the companys Growth Fund saw a rise in its NAV at the end of the year.

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1. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Growth Fund 2007)

16 14 11.35 12 10 NAV(in Rs.) 8 6 4 2 0 upto 31st March 2007 upto 3oth June 2007 upto 30th Sep 2007 13.91 12.29

14.71

upto 31st Dec 2007

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 29.6%, for the purpose of calculation we are taking base month i.e. 31st march 2007.

NOTE FOR CALCULATION: 14.71-11.35=3.36/11.35*100=29.6%

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1.2 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

GROWTH FUND (NAV in Rs.)

March 2008

16.65

June 2008

15.76

September 2008

17.45

December 2008

18.86

INTERPRETATION:
As seen in the table above, the NAV of the Growth Fund at the beginning of the year (2008) was Rs.16.65 which is slightly more as compared to the year 2007. Although it had gone down in the middle of the year but later, it managed to reach a value of Rs.18.86.

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2. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Growth Fund 2008)

19 18.5 18 17.5 17 16.65 15.76 17.45

18.86

NAV(in Rs)16.5
16 15.5 15 14.5 14

upto 31st upto 3oth March 2008 June 2008

upto 30th Sep 2008

Months

upto 31st Dec 2008

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 13.3%

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1.3 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

GROWTH FUND (NAV in Rs.)

March 2009

18.54

June 2009

21.1

September 2009

23.54

December 2009

27.61

INTERPRETATION:
From the above table it is very much clear that the NAV of the Growth Fund had seen an overall increase over the past two years (i.e. 2007 & 2008). It touched the level of Rs.27.61 at the end of the year as compared to 2007 & 2008 which was only Rs.14.71 & Rs.18.86. Hence, the Growth Fund of the company is showing an upward trend over the years, which is a good sign for the company.

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3. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Growth Fund 2009)

30 25 18.54 20 21.1 23.54

27.61

NAV(in Rs) 15
10 5 0 upto 31st March 2009 upto 3oth June 2009 upto 30th Sep 2009

upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 48.92%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


1.4 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

BALANCE MANAGED FUND (NAV in Rs.)

March 2007

10.73

June 2007

11.30

September 2007

12.20

December 2007

12.63

INTERPRETATION:
The above table reveals that the NAV of the Balanced Managed Fund as on 31.03.2007 was Rs.10.73. It saw an increase in its value by Rs.1.90 at the year end (i.e. Rs.12.63 as on 31.12.2007).

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INDIAN ACEDEMY DEGREE COLLEGE

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4. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Balance Managed Fund 2007)

13 12.63 12.5 12 11.5 11.3 10.73 12.2

NAV(in Rs)
11 10.5 10 9.5 upto 31st March 2007 upto 3oth June 2007 upto 30th Sep 2007 upto 31st Dec 2007

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 17.7

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


1.5 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

BALANCE MANAGED FUND (NAV in Rs.)

March 2008

13.61

June 2008

13.25

September 2008

14.16

December 2008

14.86

INTERPRETATION:
During the year ending 2008, the NAV raised to only Rs.14.86 which is slightly more as compared to the year 2007. It was Rs.13.61 at the end of the first 3 months but, it saw a decline in its value in the middle of the year (i.e.Rs.13.25). Hence, the overall performance of the fund during the year was on an average level.

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INDIAN ACEDEMY DEGREE COLLEGE

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5. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Balanced Managed Fund 2008)

15 14.5 14.16 14 13.61

14.86

NAV(in Rs) 13.5


13 12.5 12 upto 31st March 2008

13.25

upto 3oth June 2008

upto 3oth Sep 2008

upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 9.18%

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INDIAN ACEDEMY DEGREE COLLEGE

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1.6 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

BALANCE MANAGED FUND (NAV in Rs.)

March 2009

14.81

June 2009

15.86

September 2009

17.12

December 2009

18.92

INTERPRETATION:
From the above table it is clear that the NAV of the Balanced Managed Fund increased to Rs.18.92 as on 31.12.2009. It increased considerably over the months from Rs.14.81 to Rs.15.86 and so on, thus ending at Rs.18.92 which is little high as compared to the previous year.

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6. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Balanced Managed Fund 2009)

20 18 16 14 12 14.81 15.86 17.12

18.92

NAV(in Rs) 10
8 6 4 2 0 upto 31st March 2009 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 27.75%

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INDIAN ACEDEMY DEGREE COLLEGE

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1.7 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

March 2007

10.47

June 2007

10.78

September 2007

11.27

December 2007

11.47

INTERPRETATION:
As seen in the table above the NAV of the Defensive Managed Fund as on 31.03.2007 was Rs.10.47. Later on, it reached the level of Rs.11.47 at the end of the year. Hence, it is very much clear that the performance of the Fund throughout the year was not so satisfactory.

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INDIAN ACEDEMY DEGREE COLLEGE

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7. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Defensive Managed Fund 2007)

11.6 11.4 11.2 11 10.78 10.47 11.27

11.47

NAV(in Rs)

10.8 10.6 10.4 10.2 10 9.8

upto 31st upto 3oth March 2007 June 2007

upto 30th Sep 2007

upto 31st Dec 2007

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 9.55%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


1.8 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

March 2008

11.89

June 2008

11.84

September 2008

12.30

December 2008

12.65

INTERPRETATION:
The above table shows that the there is not much of change in the NAV of the Defensive Managed Fund (i.e.2008) as compared to the year 2007. The value at the end of the first quarter was only Rs.11.89. It did not increase much and was only up to the extent of Rs.12.65 at the year end.

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


8. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: (Defensive Managed Fund 2008)

12.8 12.65 12.6 12.4 12.3

NAV(in Rs) 12.2


12 11.8 11.6 11.4 upto 31st March 2008 upto 3oth June 2008 upto 30th Sep 2008 11.89 11.84

upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 6.39%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


1.9 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

March 2009

12.7

June 2009

13.27

September 2009

13.87

December 2009

14.57

INTERPRETATION:
From the above table it is clear that during the year 2009, the NAV of the Defensive Managed Fund raised to Rs.14.57 (i.e. on 31.12.2009) which is slightly more as compared to the past two years.

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


9. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE:

(Defensive Managed Fund 2009)

15 14.5 14 13.5 13.27 12.7 13.87 14.57

NAV(in Rs)
13 12.5 12 11.5

upto 31st upto 3oth March 2009 June 2009

upto 30th Sep 2009

upto 31st Dec 2009

Months

INERENCE: From the above graph it can be inferred that the percentage increase over the
months was 14.72%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


2.0 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

March 2007

10.24

June 2007

10.38

September 2007

10.49

December 2007

10.57

INTERPRETATION:
The above table reveals that the NAV of the Secure Managed Fund was Rs.10.24 on 31.03.2007. Its value was almost stable during the year and it increased only by Rs.0.33 at the end of the year (Rs.10.57). Hence, it is seen that the returns given to the investors by Secure Managed Fund is not so high.

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


10. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE:

(Secure Managed Fund 2007)

10.6 10.55 10.5 10.45 10.4 10.38 10.35 10.3 10.25 10.2 10.15 10.1 10.05 upto 31st March 2007 upto 3oth June 2007 upto 30th Sep 2007 10.24 10.49

10.57

NAV(in Rs)

upto 31st Dec 2007

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 3.22%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


2.1 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEMES:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

March 2008

10.63

June 2008

10.77

September 2008

10.93

December 2008

11.03

INTERPRETATION:
From the above table it is clear that the Secure Managed Funds NAV during the year 2008 was also consistent. It raised to only Rs.11.03 at the end of the year, while it was Rs.10.63 as on 31.03.2008. Hence, its return for the year 2008 is little more compared to 2007.

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


11. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE:

(Secure Managed Fund 2008)

11.1 11.03 11 10.9 10.93 10.77 10.63

NAV(in Rs)

10.8 10.7 10.6 10.5 10.4 upto 31st March 2008

upto 30th June 2008

upto 30th Sep 2008

upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 3.76%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


2.2 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

March 2009

11.19

June 2009

11.44

September 2009

11.72

December 2009

11.94

INTERPRETATION:
From the above table it is clear that the Secure Managed Funds NAV during the year ending 2009 was Rs.11.94. It did not rise much throughout the year and was lying sum where within the value 12.

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


12. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE:

(Secure Managed Fund 2009)

12 11.8 11.6 11.44

11.94 11.72

NAV(in Rs) 11.4


11.19 11.2 11 10.8 upto 31st March 2009 upto 30th June 2009 upto 30th Sep 2009 upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 6.70%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


2.3 TABLE SHOWING THE AVERAGE NET ASSET VALUE (NAV) OF

SCHEMES: PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE

YEARS

GROWTH FUND

BALANCED MAMAGED FUND

DEFENSIVE MANAGED FUND

SECURE MANAGED FUND

NAV (in Rs.)

2007

13

12

11

10

2008

17

14

12

11

2009

23

17

14

12

INTERPRETATION:
The above table clearly shows the returns given to the investors by each of the Growth, Balance, Defensive and, Secure Managed Funds for the period 2007-2009 when determined on an average annual basis. The Growth Fund increased considerably over the years, thus raising to Rs.23 at the end of the year 2009, while it was only Rs.13 in the year 2007. But, in case of Balanced Managed Fund the NAV was little less (i.e. Rs 17 during the year ending 2009) as compared to

Growth Fund. On the other hand, the Defensive Managed Funds NAV was not so high and, increasing in a slow manner its value raised to Rs.14 at the end of the year 2009. And, as Secure Managed

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


Fund longs in relatively low risk assets, so there is not so much of rise in its NAV throughout the years.

13. PENSION CHAMPION / ENDOWMENT PLAN / SIMPLE LIFE: Average Annually comparison of Growth, Balance, Defensive, and Secure Managed Fund (2007, 2008 & 2009)
25

20

NAV (in Rs)

15
Growth fund Balance Fund

10

Defensive Fund Secure Fund

0 2007 2008 Years 2009

INFERENCE:
From the above graph it can be inferred that the percentage increase over the years for Secure, Defensive, Balance & Growth Fund were 20%, 27.27%, 41.67% & 76.92%, respectively.
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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.1 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME: (B) PENSION CHAMPION

MONTHS

GROWTH FUND (NAV in Rs.)

March 2008

10.80

June 2008

10.09

September 2008

11.10

December 2008

12.20

INTERPRETATION:
The above table reveals that the NAV of the Growth Fund as on 31.03.2008 was Rs.10.80. It saw an increase in its value by Rs.1.40 at the year end (i.e. Rs.12.20 as on 31.12.2008).

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


14. PENSION CHAMPION: (Growth Fund 2008)

14 12 10 8 12.2 10.8 10.09 11.1

NAV(in Rs)
6 4 2 0 upto 31st upto 3oth March 2008 June 2008 upto 30th Sep 2008 upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 12.96%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.2 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME: PENSION CHAMPION

MONTHS

GROWTH FUND (NAV in Rs.)

March 2009

11.49

June 2009

12.20

September 2009

14.34

December 2009

16.71`

INTERPRETATION:
The above table reveals that the NAV of the Growth Fund as on 31.03.2009 was Rs.11.49. It saw an increase in its value by Rs.5.22 at the year end (i.e. Rs.16.71 as on 31.12.2009).

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INDIAN ACEDEMY DEGREE COLLEGE

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15. PENSION CHAMPION: (Growth Fund 2009)

18 16 14.34 14 12 11.49 12.2

16.71

NAV(in Rs)

10 8 6 4 2 0 upto 31st March 2009 upto 3oth June 2009 upto 30th Sep upto 31st Dec 2009 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 45.43%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.3 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION

MONTHS

BALANCE MANAGED FUND (NAV in Rs.)

March 2008

10.26

June 2008

9.97

September 2008

10.80

December 2008

11.40

INTERPRETATION:
The above table reveals that the NAV of the Balanced managed fund as on 31.03.2008 was Rs.10.26. It saw an increase in its value by Rs.1.14 at the year end (i.e. Rs.11.40 as on 31.12.2008).

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INDIAN ACEDEMY DEGREE COLLEGE

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16. PENSION CHAMPION: (Balanced managed fund 2008)

11.5

11.4

11

10.8

10.5

10.26 9.97

NAV(in Rs)
10

9.5

9 upto 31st upto 3oth March 2008 June 2008 upto 30th Sep 2008 upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 11.11%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.4 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION

MONTHS

BALANCE MANAGED FUND (NAV in Rs.)

March 2009

10.87

June 2009

11.79

September 2009

12.78

December 2009

13.80

INTERPRETATION:
The above table reveals that the NAV of the Balanced managed fund as on 31.03.2009 was Rs.10.87. It saw an increase in its value by Rs.2.93 at the year end (i.e. Rs.13.80 as on 31.12.2009).

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INDIAN ACEDEMY DEGREE COLLEGE

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17. PENSION CHAMPION: (Balanced managed fund 2009)

14 12 10 8 NAV(in Rs) 6 4 2 0 upto 31st March 2009 upto 3oth June 2009 11.79 10.87

13.8 12.78

upto 30th Sep 2009

upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 26.95%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.5 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME: PENSION CHAMPION

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

March 2008

10.08

June 2008

10.90

September 2008

10.61

December 2008

10.45

INTERPRETATION:
The above table reveals that the NAV of the Defensive managed funds on 31.03.2008 was Rs.10.08. It saw an increase in its value by Re.0.37 at the year end (i.e. Rs.10.45 as on 31.12.2008).

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


18. PENSION CHAMPION: (Defensive managed fund2008)

11 10.8 10.6 10.4

10.9

10.61 10.45

NAV(in Rs)
10.2 10 9.8 9.6 upto 31st March 2008 upto 3oth June 2008 upto 30th Sep 2008 upto 31st Dec 2008 10.08

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 3.67%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.6 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

March 2009

10.79

June 2009

11.35

September 2009

12.67

December 2009

13.78

INTERPRETATION:
The above table reveals that the NAV of the Defensive managed funds on 31.03.2009 was Rs.10.80. It saw an increase in its value by Rs.1.40 at the year end (i.e. Rs.12.20 as on 31.12.2009).

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INDIAN ACEDEMY DEGREE COLLEGE

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19. PENSION CHAMPION: (Defensive managed fund2009)

14 12.67 12 10 8 10.79 11.35

13.78

NAV(in Rs)
6 4 2 0 upto 31st March 2009 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 27.71%

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INDIAN ACEDEMY DEGREE COLLEGE

COMPARATIVE ANALYSIS OF VARIOUS NAV


3.7 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

March 2008

10.04

June 2008

10.77

September 2008

10.33

December 2008

11.26

INTERPRETATION:
The above table reveals that the NAV of the Secure Managed Fund as on 31.03.2008 was Rs.10.04. It saw an increase in its value by Rs.1.22 at the year end (i.e. Rs.11.26 as on 31.12.2008).

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20. PENSION CHAMPION: (Secure Managed Fund 2008)

11.4 11.2 11 10.8 10.6 10.77

11.26

NAV(in Rs) 10.4


10.2 10 9.8 9.6 9.4 upto 31st March 2008 upto 3oth June 2008 10.04

10.33

upto 30th Sep 2008

upto 31st Dec 2008

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 12.15%

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3.8 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

PENSION CHAMPION

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

March 2009

10.58

June 2009

10.84

September 2009

11.26

December 2009

11.94

INTERPRETATION:
The above table reveals that the NAV of the Secure Managed Fund as on 31.03.2009 was Rs.10.58. It saw an increase in its value by Rs.1.36 at the year end (i.e. Rs.11.94 as on 31.12.2009).

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21. PENSION CHAMPION: (Secure Managed Fund 2009)

12

11.94

11.5

11.26 10.84 10.58

11

NAV(in Rs)
10.5 10 9.5

upto 31st March 2009

upto 3oth June 2009

upto 30th Sep 2009

upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 12.85%

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4.1 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME: (C) ENDOWMENT PLAN

MONTHS

GROWTH FUND (NAV in Rs.)

June 2009

21.08

September 2009

23.54

December 2009

27.61

INTERPRETATION:
The above table reveals that the NAV of the Growth Fund as on 30.06.2009 was Rs.21.08. It saw an increase in its value by Rs.6.53 at the year end (i.e. Rs.27.61 as on 31.12.2009).

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22. ENDOWMENT PLAN: (Growth Fund 2009)

30 27.61 25 21.08 20 23.54

NAV(in Rs) 15
10

0 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 30.97%

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4.2 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

ENDOWMENT PLAN

MONTHS

DEFENSIVE MANAGED FUND (NAV in Rs.)

June 2009

13.27

September 2009

13.87

December 2009

14.57

INTERPRETATION:
The above table reveals that the NAV of the Defensive managed fundas on 30.06.2009 was Rs.13.27. It saw an increase in its value by Rs.1.30 at the year end (i.e. Rs.14.57 as on 31.12.2009).

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23. ENDOWMENT PLAN: (Defensive managed fund 2009)

14.6 14.4 14.2 14 13.8 13.87

14.57

NAV(in Rs) 13.6


13.4 13.2 13 12.8 12.6 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009 13.27

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 9.79%

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4.3 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

ENDOWMENT PLAN

MONTHS

BALANCED MANAGED FUND (NAV in Rs.)

June 2009

15.86

September 2009

17.12

December 2009

18.92

INTERPRETATION:
The above table reveals that the NAV of the Balanced managed fund as on 30.06.2009 was Rs.15.86. It saw an increase in its value by Rs.3.06 at the year end (i.e. Rs.18.92 as on 31.12.2009).

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24. ENDOWMENT PLAN: (Balanced managed fund 2009)

19 18.5 18 17.5 17 17.12

18.92

NAV(in Rs) 16.5


16 15.5 15 14.5 14 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009 15.86

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 19.29%

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4.4 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME:

ENDOWMENT PLAN

MONTHS

SECURE MANAGED FUND (NAV in Rs.)

June 2009

11.44

September 2009

11.72

December 2009

11.94

INTERPRETATION:
The above table reveals that the NAV of the Secure Managed Fund as on 30.06.2009 was Rs.11.44. It saw an increase in its value by Re.0.5 only at the year end (i.e. Rs.11.94 as on 31.12.2009).

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25. ENDOWMENT PLAN: (Secure Managed Fund 2009)

12 11.9 11.8 11.7 11.72

11.94

NAV(in Rs)

11.6 11.5 11.4 11.3 11.2 11.1 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009 11.44

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 4.37%

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4.5 TABLE SHOWING THE NET ASSET VALUE (NAV) OF SCHEME: ENDOWMENT PLAN

MONTHS

BALANCED (NAV in Rs.)

June 2009

10.49

September 2009

12.56

December 2009

15.32

INTERPRETATION:
The above table reveals that the NAV of the Balanced as on 30.06.2009 was Rs.10.49. It saw an increase in its value by Rs.4.83 at the year end (i.e. Rs.15.32 as on 31.12.2009).

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26. ENDOWMENT PLAN: (Balanced 2009)

16 14 12.56 12 10 10.49

15.32

NAV(in Rs)

8 6 4 2 0 upto 3oth June 2009 upto 30th Sep 2009 upto 31st Dec 2009

Months

INFERENCE:
From the above graph it can be inferred that the percentage increase over the months was 46.04%

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FACTORS INFLUENCING THE CHANGES IN NET ASSET VALUE (NAV) : (In general)
The direction your funds NAV takes depends on a host of factors. These are: Valuation of investments: As NAV is the price of the funds securities, it is important that these be valued correctly. While listed securities are easily valued using daily closing prices, untraded or thinly traded securities are trickier. SEBI lays down strict guidelines for their valuation, and also defines untraded/thinly traded security for more transparency. Purchase/sale of securities: Ultimately, a funds performance depends largely on the fund managers management abilities. Eventually, so does your NAV. The fund manager decides which stocks to buy, and when to sell. And this impacts your NAV. Other assets & liabilities: Other assets include any income due to the fund but not yet receivedlike company dividends. Other liabilities also include expenses payable from the scheme, including AMC fees that are paid to your Asset Management Company for managing your funds. Units sold & redeemed: Your NAV is affected each time an longer buys into the fund or sells units. Your funds NAV is adversely impacted when there is a large-scale redemption of units. Usually, all mutual funds maintain a small cash reserve to meet redemption, but large-scale redemption may force the fund manager to sell stocks to raise the money. If this is done at an unfavourable price, your NAV will suffer. If your fund manager sells stocks expected to go up in future, the interests of existing investors is affected as they are deprived of future gains. Dividend distribution: Any gains like dividends that are distributed from your portfolio ultimately come from your NAV. Since dividends are paid out of your NAV, it will be

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reduced to the extent of the amount paid. If your schemes NAV is, say, Rs 10 and it goes up to Rs 15, and the fund decides to pay a dividend of Rs 5, your NAV will be reduced by Rs 5 to come back to Rs 10. The Rs 5 comes to your hands as dividend income. Apart from the above factors, NAV may also be influenced by factors such as : Changes in interest rates. Price and volume volatility in the bond and stock markets. Changes in taxation. Currency exchange rates. Foreign investments. Political, economic or other developments and closure of the stock exchanges. Thus, the NAV of your scheme on any day reflects the realisable value of your investments (multiplied by the number of units held) on that day.

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findings
As per the study done on Comparative analysis of various NAV schemes of HDFC STANDARD Life Insurance Co. Ltd for the past three years and the factors influencing the changes in NAV the following findings have been summarized:

(A) In case of plans like Pension Champion, Endowment Plan, Simple Life; all the four funds of the Company (i.e. Growth, Balance, Defensive, and Secure Managed Fund) have given different types of returns to the investors.

During the year ending 2007, the NAV of the Growth Fund was Rs.14.71. Although the value declined in the middle of the year 2008, but ultimately it reached the value of Rs.18.86 as on 31st Dec, 2008. Also, the percentage change during the year 2008 was 13.27%. However, the NAV increased considerably during 2009 and raised to the extent of Rs.27.61 as on 31st December 2009.

Also, during the two years 2007 & 2008, the Balanced Managed Fund was seen to give balance returns to the investors as there was not much of fluctuation in its NAV. However, it saw a rise in the year 2009 reaching the level of Rs.18.92 on 31st Dec, 2009 which was only Rs.14.81 as on 31st March 2009.

The returns given by Defensive Managed Fund over the years (i.e. 2007, 2008 & 2009) were stable. The NAVs as on the last date of each year, i.e. on 31st of December were Rs.11.47, Rs. 12.61 and Rs.14.57. Hence, the Defensive Managed Fund showed signs of a little higher return only during the year 2009 as there was an increase in its NAV. As the Secure Managed Fund provides stable returns by longing in relatively low risk assets, so there is hardly any remarkable change in its NAV over the years and hence, its

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value was only Rs.11.03 and Rs.11.94 during the year ending 31st Dec, 2008 & 31st Dec, 2009.

(B) In case of Pension Champion, the Growth Fund was at the top order in providing good returns to the investors. Its NAV was Rs.16.71 during the year ending 31st Dec, 2009 as compared to the year 2008 which was only Rs.11.80. Also, the percentage gradually increased during the year 2009 was 45.43%. However, the Balanced Managed Funds scenario was different from that of Growth Fund. During the year 2008 the percentage change was only 11.11% but it raised to the level of 26.95% in the year 2009.

The Defensive Managed Fund could not show good performance during the year 2008 but there was an increase in its NAV in the year 2009. The NAV as on 31.12.2009 was Rs.13.78, which was only Rs.10.79 on 31st March 2009. The returns provided by Secure Managed Fund over the years were more or less stable only. There was not seen much of rise in its NAV in the two years. Also, the percentage change in 2009 was only 5.95%. Its NAV as on 31st Dec, 2009 was Rs.11.21 as compared to Rs.10.44 on 31st Dec, 2008; which is slightly higher.

(C) In case of Endowment Plan, the Growth Fund was also seen to give good returns to the investors apart from the Growth Fund. The NAV of Growth Fund on 30th June 2009 was Rs.10.49, which increased considerably during the year and went high to the value of Rs.15.31 as on 31st Dec, 2009. Compared to the Balanced Managed Fund, both the Defensive Managed Fund as well as the Secure Managed Fund did not show signs of good returns to the investors. The percentage change in case of the two Funds during the year 2009 was only 9.8% & 4.37%. But, the percentage change in case of Balance Fund was little higher (i.e. 19.29%).

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suggestions
(A) To the Investors :
After a clear analysis of the aforesaid investment types, the following can be recommended: If investors have the flexibility for a direct investment, they should go for Growth and Balanced as both the funds long mostly on equities. When the investors are ready to take a risk with the expectation of a greater growth, investment in Unit Linked Insurance Plans are a better option since they provide the investor with a life insurance cover and the premium paid is longed in either debt or equity products or a combination of the two. They can be viewed as a combination of Insurance and Mutual Funds. Investors can expect for a good return if they make an investment in Growth Fund as it longs mostly on equities (upto 70%). However, the Fund will also long in government securities, bonds and money market instruments. The investors can either go for plans like Pension Champion, Endowment Plan or Simple Life, where the Growth Fund is showing signs of good returns. Investors can also opt for Balanced as it longs on equities upto 100%. So, it gives an excellent return according to the market conditions. The fund may also long in government securities, bonds and money market instruments. Investors can choose from plans like, Pension Champion, Endowment Plan wherein the Balanced is seen to fetch a high return to the investors.

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When the investors do not want to take much of risk with their investments, they should go for Defensive and Balance Funds, where the growth is nominal but their money is secured. Defensive Fund is also safe as it longs in government securities upto 85%, money market instruments / cash upto 20% and equities upto 10%. Hence, in this case the risk factor is nominal with a nominal growth. So, the investors can expect for a nominal return with lesser risk if they choose this fund. Balance Fund provides balance returns by longing in Fixed income securities as well as in equities upto 40%. Here, the investors will get a balanced return with a good growth. As far as the Secure Fund is concerned, there is no risk factor at all as this fund longs mostly in government securities. Also, this fund provides stable returns by longing in relatively low risk assets. Hence, if the investors do not want to take any risk at all then Secure Fund is the ideal choice.

Thus, investors can opt for Unit Linked Insurance Plans as they provide Capital Appreciation and also, we are allowed to long our policy in stock, bond or money market funds. Moreover, the policy holder also gets the facility of switching over from one fund to another.

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(B) To the Company:
To be successful in the marketing of insurance products, the entire business scenario has to be taken into account and, strategies have to be adopted based on the dynamics of market trends. In order to have a good market performance, customer awareness about the insurers price, product and financial strengths should be enhanced. The company should design the products which should satisfy the personal needs of the customers with an ample degree of flexibility. To achieve greater insurance penetration, the company has to create a more vibrant and competitive company with greater efficiency, choice of products and value for customers. The insurance company should have to conduct the training programs for the customers, where the company can give product information.

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Conclusions
The next three years were filled with uncertainty ,due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.

Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

During the last three (3) years the company is found to be growing at a very good rate and as increased its profitability position.

In case of plans like Pension Champion, Endowment Plan, Simple Life; all the four funds of the Company (i.e. Growth, Balance, Defensive, and Secure Managed Fund) have given different types of returns to the investors

The NAV (Net Asset Value) of Growth Fund declined in the year 2008, but the company has been able to increase the NAV in the year 2009. This shows a positive growth a company.

There was not much fluctuation in the NAV Balanced Fund, but it has increased in the year 2009.

The Defensive Managed Fund has given stable returns during the last three (3) years, however the return has increase in the year 2009 because of increase in the NAV.

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The Secured Managed Fund has also given stable returns as there are no charges in the year.

In case of Pension Champion, the Growth Fund has provided very good returns to the Investor. However the Balance Managed Fund has raised only the year 2009.

The Defensive Managed Fund was found to the weak in performance, but the NAV increase in the year 2009. The Secured Managed Fund was found to be more stable over the years.

In case Endowment Plan also the Growth Fund has a given a very good return the Investor, but the other Funds did not so the good performance.

When the investors do not want to take much of risk with their investments, they should go for Defensive and Balance Funds, where the growth is nominal but their money is secured. Over the years since its inception the company has made a very good progress an increase its Goodwill & Brand name and now its is a well know company.

Investors can opt for an ULIP as it provides tax relief and also the returns are good. More over the maturity benefit is the NAV (Net Asset Value) of the units, and the policy holder can switch between schemes of the various Funds. Hence, an ULIP is an ideal tool to gain security and ensure savings.

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BIBLIOGRAPHY
Books
Financial Institutions & Markets Indian Financial System Gordon & Natarajan Himalaya Publication House

Authors Name
L.M. Bhole

Publishers Name
Kalyani Publishers

Life Insurance

---

H.P. Institute of Insurance

Methodology of Research in Social Sciences

O.R. Krishnaswami & Ranganatham

M.

Himalaya Publication House

WEBSITES:

www.google.co.in www.hdfcinsurance.com www.HDFCSLIC.com

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