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C CO ON NT TE EN NT TS S
1 1. . I IN NT TR RO OD DU UC CT TI IO ON N
2 2. . L LI IF FE E I IN NS SU UR RA AN NC CE E C CO OR RP PO OR RA AT TI IO ON N O OF F I IN ND DI IA A
O OB BJ JE EC CT TI IV VE E
V VI IS SI IO ON N A AN ND D M MI IS SS SI IO ON N
W WH HA AT T I IS S P PA AN NS SI IO ON N P PL LA AN N
T TY YP PE E O OF F P PE EN NS SI IO ON N P PL LA AN N
3 3. . I IC CI IC CI I P PR RU UD DE EN NT TI IA AL L
C CO OM MP PA AN NY Y P PR RO OF FI IL LE E
V VI IS SI IO ON N A AN ND D V VA AL LU UE ES S
V VA AR RI IO OU US S R RE ET TI IR RM ME EN NT T S SO OL LU UT TI IO ON N
4 4. . U UL LI IP P ( (U UN NI IT T L LI IK KE ED D I IN NS SU UR RA AN NC CE E P PL LA AN N) )
W WH HA AT T I IS S U UL LI IP P
R RE ET TI IR RM ME EN NT T P PL LA AN N I IN N U UL LI IP P
5 5. . R RE ES SE EA AR RC CH H O OB BJ JE EC CT TI IV VE ES S A AN ND D M ME ET TH HO OD DO OL LO OG GY Y
6 6. . D DA AT TA A A AN NA AL LY YS SI IS S A AN ND D I IN NT TE ER RP PR RE ET TA AT TI IO ON N
7 7. . F FI IN ND DI IN NG GS S A AN ND D R RE EC CO OM MM MA AN ND DA AT TI IO ON NS S
8 8. . C CO ON NC CL LU US SI IO ON N
9 9. . QUESTIONNAIRE
1 10 0. . BIBLIOGRAPHY


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EXECUTIVE SUMMARY


The objective of the project was to study and evaluate present market share
of two leading insurance company LIC and ICICI PRUDENTIAL.
To complete the project the study has been conducted which based on the
secondary data which is collected through the various books, magazine,
journal and websites.
The main purpose of the study to know that how and what manner people
attract towards the company and how they decide which one should be
chosen.
Finding and recommendation made on the basis of survey most depicts on
the point that insurance plan and policies should be more customer centric
,as many customer are not aware about the policies and plan and are not able
to decide which policies or plan is better for them. so that they can give
proper knowledge to the customers. Frequent change of customers should
not be done on the routes.




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RESEARCH OBJECTIVE

1) To establish an interface between the policy/plans makers and policy
takers, that how and in what manners they show there reaction
towards policy and plan.

to study and analyse the different pension plans of the two company
LIC and ICICI PRUDENTIAL .

to find out How people choose the suitable pension plan for them
from LIC.

2) to know that how and in what manners the different pension plan
attract different age and salary group.





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INTRODUCTION TO THE TOPIC

Introduction seeks to introduce the readers to the backgrounds of the study,
people involved in the research scope of the study. It is a brief rationale as
why we did our study on Comparative Study On Pension Of Leading
Life Insurance Company ( LIC and ICICI Prudential) .
Background and People Involved

In India LIC and ICICI Prudential are the leading Insurance Company. LIC
is from government sector and whereas ICICI prudential is a joint venture of
ICICI Bank of India and prudential Insurance of U.K.
Mainly pension is provided by the government to its employees. But there is
a large no as people who work with private sector industry, after the
retirement the first thing which worry them is how they survive and how
theirs needs and requirements fulfilled?
5

INSURANCE IN INDIA:-

Insurance is a federal subject in India and has a history dating back to 1818.
Life and general insurance in India is still a nascent sector with huge
potential for various global players with the life insurance premiums
accounting to 2.5% of the country's GDP while general insurance premiums
to 0.65% of India's GDP.
[1]
. The Insurance sector in India has gone through a
number of phases and changes, particularly in the recent years when the
Govt. of India in 1999 opened up the insurance sector by allowing private
companies to solicit insurance and also allowing FDI up to 26%. Ever since,
the Indian insurance sector is considered as a booming market with every
other global insurance company wanting to have a lion's share. Currently,
the largest life insurance company in India is still owned by the government.

History of Insurance in India
Insurance in India has its history dating back till 1818, when Oriental Life
Insurance Company was started by Europeans in Kolkata to cater to the
needs of European community. Pre-independent era in India saw
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discrimination among the life of foreigners and Indians with higher
premiums being charged for the latter. It was only in the year 1870, Bombay
Mutual Life Assurance Society, the first Indian insurance company covered
Indian lives at normal rates.
At the dawn of the twentieth century, insurance companies started
mushrooming up. In the year 1912, the Life Insurance Companies Act, and
the Provident Fund Act were passed to regulate the insurance business. The
Life Insurance Companies Act, 1912 made it necessary that the premium
rate tables and periodical valuations of companies should be certified by an
actuary. However, the disparage still existed as discrimination between
Indian and foreign companies. The oldest existing insurance company in
India is National Insurance Company Ltd, which was founded in 1906 and is
doing business even today. The Insurance industry earlier consisted of only
two state insurers: Life Insurers i.e. Life Insurance Corporation of India
(LIC) and General Insurers i.e. General Insurance Corporation of India
(GIC). GIC had four subsidiary companies.
With effect from December 2000, these subsidiaries have been de-linked
from parent company and made as independent insurance companies:
Oriental Insurance Company Limited, New India Assurance Company
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Limited, National Insurance Company Limited and United India Insurance
Company Limited.

Related Acts:-
The insurance sector went through a full circle of phases from being
unregulated to completely regulated and then currently being partly
deregulated. It is governed by a number of acts, with the first one being the
Insurance Act, 1938.
The Insurance Act, 1938
The Insurance Act, 1938 was the first legislation governing all forms of
insurance to provide strict state control over insurance business.
Life Insurance Corporation Act, 1956
Even though the first legislation was enacted in 1938, it was only in 19
January 1956, that life insurance in India was completely nationalized,
through a Government ordinance; the Life Insurance Corporation Act, 1956
effective from 1.9.1956 was enacted in the same year to, inter-alia, form
LIFE INSURANCE CORPORATION after nationalization of the 245
companies into one entity. There were 245 insurance companies of both
Indian and foreign origin in 1956. Nationalization was accomplished by the
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govt. acquisition of the management of the companies. The Life Insurance
Corporation of India was created on 1 September, 1956, as a result and has
grown to be the largest insurance company in India as of 2006.
[2]

General Insurance Business (Nationalization) Act, 1972
The General Insurance Business (Nationalization) Act, 1972 was enacted to
nationalize the 100 odd general insurance companies and subsequently
merging them into four companies. All the companies were amalgamated
into National Insurance, New India Assurance, Oriental Insurance, and
United India Insurance which were headquartered in each of the four
metropolitan cities.
[3]

Insurance Regulatory and Development Authority (IRDA) Act,
1999
Till 1999, there were not any private insurance companies in Indian
insurance sector. The Govt. of India, then introduced the Insurance
Regulatory and Development Authority Act in 1999, thereby de-regulating
the insurance sector and allowing private companies into the insurance.
Further, foreign investment was also allowed and capped at 26% holding in
the Indian insurance companies. In recent years many private players entered
in the Insurance sector of India. Companies with equal strength competing
in the Indian insurance market. Currently, in India only 2 million people
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(0.2 % of total population of 1 billion), are covered under Mediclaim,
whereas in developed nations like USA about 75 % of the total population
are covered under some insurance scheme. With more and more private
players in the sector this scenario may change at a rapid pace.
General Insurance Business (Nationalization) Act, 1972
The General National Insurance, New India Assurance, Oriental
Insurance, United India Insurance which were headquartered in each of
the four metropolitan cities.
[3]
LIC:- LIFE INSURANCE CORPRATION OF
INDIA )







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A A. .C CO OM MP PA AN NY Y P PR RO OF FI IL LE E O OF F L LI IC C
B B. .O OB BJ JE EC CT TI IV VE E
C C. .V VI IS SI IO ON N A AN ND D M MI IS SS SI IO ON N
D D. .W WH HA AT T I IS S P PE EN NS SI IO ON N P PL LA AN N


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BRI EF HI STORY OF LI FE INSURANCE
CORPORATI ON (LI C)

Bharat Insurance Company (1896) was also one of such companies inspired
by nationalism. The Swadeshi movement of 1905-1907 gave rise to more
insurance companies. The United India in Madras, National Indian and
National Insurance in Calcutta and the Co-operative Assurance at Lahore
were established in 1906. In 1907, Hindustan Co-operative Insurance
Company took its birth in one of the rooms of the Jorasanko, house of the
great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the
companies established during the same period. Prior to 1912 India had no
legislation to regulate insurance business. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed. The
Life Insurance Companies Act, 1912 made it necessary that the premium
rate tables and periodical valuations of companies should be certified by an
actuary. But the Act discriminated between foreign and Indian companies on
many accounts, putting the Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
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business. From 44 companies with total business-in-force as Rs.22.44 crore,
it rose to 176 companies with total business-in-force as Rs.298 crore in
1938. During the mushrooming of insurance companies many financially
unsound concerns were also floated which failed miserably. The Insurance
Act 1938 was the first legislation governing not only life insurance but also
non-life insurance to provide strict state control over insurance business. The
demand for nationalization of life insurance industry was made repeatedly in
the past but it gathered momentum in 1944 when a bill to amend the Life
Insurance Act 1938 was introduced in the Legislative Assembly. However, it
was much later on the 19th of January, 1956, that life insurance in India was
nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of
nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance,
and later, the ownership too by means of a comprehensive bill. The
Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all insurable
persons in the country, providing them adequate financial cover at a
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reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart
from its corporate office in the year 1956. Since life insurance contracts are
long term contracts and during the currency of the policy it requires a variety
of services need was felt in the later years to expand the operations and place
a branch office at each district headquarter. re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of
re-organization servicing functions were transferred to the branches, and
branches were made accounting units. It worked wonders with the
performance of the corporation. It may be seen that from about 200.00
crores of New Business in 1957 the corporation crossed 1000.00 crores only
in the year 1969-70, and it took another 10 years for LIC to cross 2000.00
crore mark of new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on
new policies.
Today LIC functions with 2048 fully computerized branch offices, 100
divisional offices, 7 zonal offices and the corporate office. LICs Wide Area
Network covers 100 divisional offices and connects all the branches through
a Metro Area Network. LIC has tied up with some Banks and Service
providers to offer on-line premium collection facility in selected cities.
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LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,
Kolkata, New Delhi, Pune and many other cities. With a vision of providing
easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate
anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario
of Indian insurance and is moving fast on a new growth trajectory surpassing
its own past records. LIC has issued over one crore policies during the
current year. It has crossed the milestone of issuing 1,01,32,955 new policies
by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business. The same motives which inspired our forefathers to bring
insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and
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to help the people in providing security to their families.
Life Insurance Corporation of India
Some Areas
The traditional life insurance business for the LIC has been a little more than
a savings policy. Term life (where the insurance company pays a
predetermined amount if the policyholder dies within a given time but it
pays nothing if the policyholder does not die) has accounted for less than 2%
Life Insurance.
Corporation of India
Some Areas of Future Growth
Life Insurance
The traditional life insurance business for the LIC has been a little more than
a savings policy of the insurance premium of the LIC (Mitra and Nayak,
2001). For the new life insurance companies, term life policies would be the
main line of business.
Health Insurance
Health insurance expenditure in India is roughly 6% of GDP, much higher
than most other countries with the same level of economic development. Of
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that, 4.7% is private and the rest is public. What is even more striking is that
4.5% are out of pocket expenditure (Berman, 1996). There has been an
almost total failure of the public health care system in India. This creates an
opportunity for the new insurance companies.
Thus, private insurance companies will be able to sell health insurance to a
vast number of families who would like to have health care cover but do not
have it.
Pension
The pension system in India is in its infancy. There are generally three forms
of plans: provident funds, gratuities and pension funds. Most of the pension
schemes are confined to government employees (and some large
companies). The vast majority of workers are in the informal sector. As a
result, most workers do not have any retirement benefits to fall back on after
retirement. Total assets of all the pension plans in India amount to less than
USD 40 billion.
Therefore, there is a huge scope for the development of pension funds in
India. The finance minister of India has repeatedly asserted that a Latin
American style reform of the privatized pension system in India would be
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welcome (Roy, 1997). Given all the pros and cons, it is not clear whether
such a wholesale privatization would really benefit India or not (Sinha,
2000).




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OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to
the socially and economically backward classes with a view to
reaching all insurable persons in the country and providing them
adequate financial cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-
linked savings adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of
the interest of the community as a whole; the funds to be deployed to
the best advantage of the investors as well as the community as a
whole, keeping in view national priorities and obligations of attractive
return.
Conduct business with utmost economy and with the full realization
that the moneys belong to the policyholders.


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Act as trustees of the insured public in their individual and collective
capacities.
Meet the various life insurance needs of the community that would
arise in the changing social and economic environment.
achievement of Corporate Involve all people working in the
Corporation to the best of their capability in furthering the interests of
the insured public by providing efficient service with courtesy.
Promote amongst all agents and employees of the Corporation a sense
of participation, pride and job satisfaction through discharge of their
duties with dedication towards the achievement of the goal.






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VISION AND MISSION

Vision
To be the best Housing Finance Company in the country.

Mission

Provide secured housing finance at

affordable cost, maximizing shareholders

value with higher customer sensitivity.

Values

Fair and Transparent Business Practices.
Transformation to a Knowledge Organization.
Higher Autonomy in Operations.
Instilling a sense of Ownership amongst Employees.

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PENSION: - A BRIEF INTRODUCTION
What Is Pension
The pension system in India is in its infancy. There are generally three forms
of plans: provident funds, gratuities and pension funds. Most of the pension
schemes are confined to government employees (and some large
companies). The vast majority of workers are in the informal sector. As a
result, most workers do not have any retirement benefits to fall back on after
retirement. Total assets of all the pension plans in India amount to less than
USD 40 billion.
Therefore, there is a huge scope for the development of pension funds in
India. The finance minister of India has repeatedly asserted that a Latin
American style reform of the privatized pension system in India would be
welcome (Roy, 1997). Given all the pros and cons, it is not clear whether
such a wholesale privatization would really benefit India or not (Sinha,
2000).



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Introduction to the Pension Plans of LIC.
Pension plan are Individual Plans that gaze into your future and foresee financial
stability during your old age. These policies are most suited for senior citizens and
those planning a secure future, so that you never give up on the best things in life.


Pension Plus

Jeevan Nidhi

Jeevan Akshay-VI

New Jeevan Dhara-I

New Jeevan Suraksha-I



Pension Plus
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS
BORNE BY THE POLICYHOLDER
LICs Pension Plus is a unit linked deferred pension plan, which provides
you a minimum guarantee on the gross premiums paid. The plan is without
any life cover.
You have a choice of investing your premiums in one of the two types of
investment funds available. Premiums paid after deduction of allocation
charge will purchase units of the Fund type chosen. The Unit Fund is subject
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to various charges and value of units may increase or decrease, depending on
the Net Asset Value (NAV).
1. Payment of Premiums: You may pay premiums regularly at yearly, half-
yearly or quarterly or monthly (through ECS mode only) intervals over the
term of the policy. Alternatively, a Single premium can be paid.
A grace period of 30 days will be allowed for payment of yearly or half-
yearly or quarterly premiums and 15 days for monthly (through ECS)
premiums.
2 . Eligibility Conditions And Other Restrictions:
a) Minimum Entry Age - 18 years (last birthday)
b) Maximum Entry Age - 75 years (nearest birthday)
c) Minimum Vesting Age - 40 years (completed)
d) Maximum Vesting Age - 85 years (nearest birthday)
e) Minimum Deferment Term - 10 years
f) Sum Assured - NIL
g) Minimum Premium -
Regular premium (other than monthly (ECS) mode) : Rs. [15,000] p.a.
Regular premium (for monthly (ECS) mode) : Rs. [1,500] p.m.
Single premium: Rs. [30,000]
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h) Maximum Premium -
Regular premium : Rs. [1,00,000] p.a.
Single premium: No Limit
Annualized Premiums shall be payable in multiple of Rs. 1,000 for other
than ECS monthly. For monthly (ECS), the premium shall be in multiples of
Rs. 250/-.
3. Charges under the Plan:
A) Premium Allocation Charge: This is the percentage of the premium
deducted towards charges from the premium received. The balance
constitutes that part of the premium which is utilized to purchase
(Investment) units for the policy. The allocation charges are as below:

For Single premium policies: 3.3%
For Regular premium policies:
Premium Allocation Charge
First Year 6.75%
2nd to 5th Year 4.50%
thereafter 2.50%

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Allocation charge for Top-up: 1.25%
B) Other Charges: The following charges shall be deducted during the term
of the policy:
1. Policy Administration charge: Rs. 30/- per month during the first
policy year and Rs 30/- per month escalating at 3% p.a. thereafter,
throughout the term of the policy shall be levied.
2. Fund Management Charge It is a charge levied as a percentage of the
value of units at following rates:
0.70% p.a. of Unit Fund for Debt Fund
0.80% p.a. of Unit Fund for Mixed Fund
Fund Management Charge shall be appropriated while computing
NAV.
3. Switching Charge This is the charge levied on switching of monies
from one fund to another. Within a given policy year 2 switches will
be allowed free of charge. Subsequent switches in that year shall be
subject to a switching charge of Rs. 100 per switch.
4. Bid/Offer Spread Nil.
5. Discontinuance Charge The discontinuance charge for regular
premium policies is as under:
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Where the policy
is discontinued
during the policy
year
Discontinuance charges
for the policies having
annualized premium up
to Rs. 25,000/-
Discontinuance charges
for the policies having
annualized premium
above Rs. 25,000/-
1
Lower of 10% * (AP or
FV) subject to a maximum
of Rs. 2500/-
Lower of 6% * (AP or FV)
subject to maximum of Rs.
6000/-
2
Lower of 7% * (AP or FV)
subject to a maximum of
Rs. 1750/-
Lower of 4% * (AP or FV)
subject to maximum of Rs.
5000/-
3
Lower of 5% * (AP or FV)
subject to a maximum of
Rs. 1250/-
Lower of 3% * (AP or FV)
subject to maximum of Rs.
4000/-
4
Lower of 3% * (AP or FV)
subject to a maximum of
Rs. 750/-
Lower of 2% * (AP or FV)
subject to maximum of Rs.
2000/-
5 and onwards NIL NIL
6. AP Annualised Premium
FV Policyholders Fund Value excluding the fund value in respect
of Top-up premiums paid, if any, on the date of discontinuance.
7. There shall not be any discontinuance charge under Single Premium

8. Service Tax Charge A service tax charge, if any, will be as per the
service tax laws and rate of service tax as applicable from time to
time.
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9. Miscellaneous Charge This is a charge levied for change in
premium mode, if opted for by the policyholder during the deferment
term. An alteration may be allowed subject to a charge of Rs. 50/-.


Jeevan Nidhi
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan.
On survival of the policyholder beyond term of the policy the accumulated
amount (i.e. Sum Assured + Guaranteed Additions + Bonuses) is used to
generate a pension (annuity) for the policyholder. The plan also provides a
risk cover during the deferment period. The USP of the plan being the
pension can commence at 40 years. The premiums paid are exempt under
Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand
Sum assured for each completed year, for the first five years.
b. Participation in profits: The policy shall participate in profits of the
Corporation from the 6th year onwards and shall be entitled to receive
bonuses declared as per the experience of the Corporation.
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c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting,
which shall include the Sum Assured under the Basic Plan together with
accrued Guaranteed Additions, simple Reversionary Bonuses and
Terminal Bonus, if any.
2 . Annuity as per the option selected: Annuity on the balance amount
if commutation is exercised, otherwise annuity on the full amount.
d. Annuity Options:
On vesting, the annuity instalment, mode of annuity payment and type of
annuity which shall be made available to the Life Assured (Annuitant) /
Nominee will depend upon the then prevailing Immediate Annuity plan of
the Life Insurance Corporation of India and its terms and conditions.
Currently the following options are available under LICs immediate
annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she
is alive.
2. Annuity Guaranteed for certain periods: The annuity is paid to the life
assured for periods of 5 or 10 or 15 or 20 years as chosen by him/her,
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whether or not he/she survives that period. After the chosen period, the
annuity is paid to the life assured as long as he/she is alive
3. Annuity with return of purchase price on death: The annuity is paid to
the life assured as long as he/she is alive. On the death of the life assured,
the purchase price of the annuity is paid as death benefit. The purchase price
includes the Sum Assured under the Basic Plan, the accrued Guaranteed
Additions and any accrued bonuses, excluding the commuted value, if any.
4. Increasing annuity: The annuity is paid to the life assured as long as
he/she is alive. The amount of annuity increases every year at a simple rate
of 3% per annum.
5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured
as long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.
6. Death Benefit on death before annuity vests: On the death of the Life
Assured during the deferment period of the policy, i.e. before the annuity
vests, an amount equal to the Sum Assured under the Basic plan along with
the accrued Guaranteed Additions, simple Reversionary Bonuses and
Terminal Bonus, if any, will be paid in a lump sum to the appointed
nominee, provided the policy is in force for full Sum Assured. Nominee will
also have the option to purchase an annuity with this amount.
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Jeevan Akshay VI
Introduction:
It is an Immediate Annuity plan, which can be purchased by paying a lump
sum amount. The plan provides for annuity payments of a stated amount
throughout the life time of the annuitant. Various options are available for
the type and mode of payment of annuities.
Options Available:
The following options are available under the plan
Type of Annuity:
payable for life at a uniform rate.
Annuity Annuity payable for 5, 10, 15 or 20 years certain and
thereafter as long as the annuitant is alive.
Annuity for life with return of purchase price on death of the
annuitant.
Annuity payable for life increasing at a simple rate of 3% p.a.
Annuity for life with a provision of 50% of the annuity payable to
spouse during his/her lifetime on death of the annuitant.
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Annuity for life with a provision of 100% of the annuity payable to
spouse during his/her lifetime on death of the annuitant.
You may choose any one. Once chosen, the option cannot be altered.
Mode:
Annuity may be paid either at monthly, quarterly, half yearly or yearly
intervals. You may opt any mode of payment of Annuity.
Salient features:
Premium is to be paid in a lump sum.
Minimum purchase price : Rs.50,000/= or such amount which may
secure a minimum annuity as under:
Mode Minimum Annuity
Monthly Rs. 500 per month
Quarterly Rs. 1000 per quarter
Half-yearly Rs. 2000 per half year
Yearly Rs.3000 per year
No medical examination is required under the plan.
No maximum limits for purchase price, annuity etc.
Minimum age at entry 40 years last birthday and Maximum age at
entry 79 years last birthday.
Age proof necessary.
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Annuity Rate:

Amount of annuity payable at yearly intervals which can be purchased for
Rs. 1 lakh under different options is as under:

Incentives for high purchase price:
If your purchase price is Rs. 1.50 lakh or more, you will receive higher
amount of annuity due to available incentives.
Cooling-off period
If you are not satisfied with the Terms and Conditions of the policy, you
may return the policy to us within 15 days from the date of receipt of the
Policy Bond. On receipt of the policy we shall cancel the same and the
Age last
birthday
Yearly annuity amount under option
( i )
( ii ) (15 years
certain)
( iii ) ( iv ) ( v ) ( vi )
40 7510 7440 6930 5610 7310 7120
45 7770 7660 6960 5890 7500 7240
50 8140 7950 7000 6280 7760 7420
55 8650 8330 7050 6810 8130 7670
60 9350 8790 7110 7530 8640 8030
65 10410 9330 7180 8590 9400 8570
70 12080 9830 7260 10220 10560 9370
75 14510 10220 7360 12590 12240 10590
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amount of premium deposited by you shall be refunded to you after
deducting the charges for stamp duty.
Paid-up value:
The policy does not acquire any paid-up value.
Surrender Value :
No surrender value will be available under the policy.
Loan :
No loan will be available under the policy.
Section 41 of Insurance Act 1938 :
No person shall allow or offer to allow, either directly or indirectly, as
an inducement to any person to take out or renew or continue an
insurance in respect of any kind of risk relating to lives or property in
India, any rebate of the whole or part of the commission payable or
any rebate of the premium shown on the policy, nor shall any person
taking out or renewing or continuing a policy accept any rebate,
except such rebate as may be allowed in accordance with the
published prospectuses or tables of the insurer: provided that
acceptance by an insurance agent of commission in connection with a
policy of life insurance taken out by himself on his own life shall not
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be deemed to be acceptance of a rebate of premium within the
meaning of this sub-section if at the time of such acceptance the
insurance agent satisfies the prescribed conditions establishing that he
is a bona fide insurance agent employed by the insurer.
New Jeevan Dhara-I
Product summary:
These are Deferred Annuity plans that allow the policyholder to make
provision for regular income after the selected term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deduction, as opted by you, throughout the term of the policy or till
earlier death. Alternatively, the premium may be paid in one lump sum
(single premium).
Tax Benefits:
Tax relief under Section 80ccc is available on premiums paid under New
Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan
Dhara I (Table No.148) qualify for tax relief under Section 88.
Bonuses:
These are with-profit plans and participate in the profits of the Corporations
35

annuity / pension business. Policies get a share of the profits in the form of
bonuses. Simple Reversionary Bonuses are declared per thousand Sum
Assured annually at the end of each financial year. Once declared, they
form part of the guaranteed benefits of the plan. Final (Additional) Bonuses
may also be payable provided policy has run for a certain minimum period.
New Jeevan Suraksha -I
Product summary:
These are Deferred Annuity plans that allow the policyholder to make
provision for regular income after the selected term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deduction, as opted by you, throughout the term of the policy or till
earlier death. Alternatively, the premium may be paid in one lump sum
(single premium)
Tax Benefits:
Tax relief under Section 80ccc is available on premiums paid under New
Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan
Dhara I (Table No.148) qualify for tax relief under Section 88.
36

Bonuses:
These are with-profit plans and participate in the profits of the Corporations
annuity / pension business. Policies get a share of the profits in the form of
bonuses. Simple Reversionary Bonuses are declared per thousand Sum
Assured annually at the end of each financial year. Once declared, they
form part of the guaranteed benefits of the plan. Final (Additional) Bonuses
may also be payable provided policy has run for a certain minimum period.
37

ICICI PRUDENTIAL

HISTORY OF ICICI PRUDENTIAL

ICICI Prudential is a joint venture between ICICI Bank and Prudential
plc engaged in the business of life insurance in India. ICICI
Prudential is the largest private insurance company and second largest
insurance in India after LIC. ICICI Prudential Life Insurance Company
is a joint venture between ICICI Bank, a premier financial powerhouse,
and Prudential plc, a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in
December 2000 after receiving approval from Insurance Regulatory
Development Authority (IRDA).ICICI Prudential Life's capital stands at
Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential
plc holding 74% and 26% stake respectively. For the year ended March
31, 2008, the company garnered Retail New Business Weighted premium of
Rs. 6,684 crores, registering a growth of 68% over the last year and
has underwritten nearly 3 million retail policies during the period.
38

The company has assets held over Rs. 30,000 crore as on April 30,
2008.
Vision & Values

To be the dominant Life, Health and Pensions player built on trust by world-
class people and service.

This we hope to achieve by:
Understanding the needs of customers and offering them superior
products and service.
Leveraging technology to service customers quickly, efficiently and
conveniently.
Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns to our
policyholders.
Providing an enabling environment to foster growth and learning for
our employees.
And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment
to 5 core values -- Integrity, Customer First, Boundary less, Ownership and
39

Passion. Each of the values describes what the company stands for, the
qualities of our people and the way we work.
How to plan for retirement?
5 simple steps to arrive at an ideal retirement plan

Step 1: Decide how much income you require to live comfortably in your
post-retirement years. Remember to take into account aspects like increased
medical costs, vacations and gifts for family, but reduce costs like children's
education and rent, if you own your home. Use our easy Inflation Index
Calculator to calculate the impact of inflation.

Step 2: Determine how much you need to save regularly, starting today.
Use our Retirement Calculator to determine how large a kitty you will need
and how much you need to save each year.
Step 3: Select the right retirement plan that enables you to meet your post-
retirement requirements. Preferably invest in market-linked plans, which can
provide you with potentially higher returns in the long run. Our Life Stage
Profiler will help you select the plan that meets your criteria
Step 4: Start saving now so you have time on your side and can enjoy the
power of compounding. Use our simple Power of Compounding Calculator.
Step 5: Systematically invest a fixed amount every month for your post-
retirement years.
40

Why is retirement planning important?
Retire from work. Not from life.
A retirement plan is an assurance that you will continue to earn a satisfying
income and enjoy a comfortable lifestyle, even when you are no longer
working. To understand why an increasing number of individuals have
already started planning for their retirement, and why you should too, read
on.

Independence is the new way of life: An increasing number of young
Indian professionals are moving away from the traditional joint family
structure. Since support no longer comes easily, parents have realized the
need to provide for themselves during their retirement years.

Costs set to soar: Skyrocketing costs throw even a well-salaried person off
balance. With rates rising everyday, you can imagine how high they will be
when you are ready to retire. A retirement plan provides you with a steady
income every month, to arm you in the face of rising costs.

To understand how inflation can impact your monthly expenses, use our
special tool, the Inflation Index calculator.

41



Non-earning retirement phase is now longer: Only 4% of India working
population- mostly government employees are covered by pensions. The
remaining 96% comprises self-employed and salaried professionals who do
not have a formal, mandated provision for pensions.

ICICI Prudential offers two key retirement plans, LifeLink Super Pension
and LifeTime Super Pension - flexible income cum insurance plans that
ensure you meet all your retirement requirements. So you can retire
peacefully from work, but not from life.


42

Retirement Solutions
To cater to the needs of a customer looking for retirement planning, ICICI
Prudential presents a wide array of products. These products have been
designed to take into account the diverse set of needs that characterize
individual customers.
ICICI Pru LifeLink Pension SP

ICICI Pru LifeLink Pension SP is a single premium pension policy that provides
you the opportunity to enjoy regular income as pension post retirement by paying
just a single premium. This product comes with the Pension Return Guarantee
Fund (PRGF) that provides you a minimum guaranteed return by way of a
guaranteed NAV at the time of vesting(Conditions Apply*). The policy value at
date of vesting is also subject to the minimum guaranteed return as prescribed
by IRDA from time to time.
Guaranteed NAV
This Policy offers you a minimum guaranteed return, as prescribed by IRDA from
time to time, on the original vesting date. This return is offered by way of a
guaranteed NAV. The applicable guaranteed NAV is declared at the beginning of
the subscription period of the tranche of the Pension Return Guarantee Fund in
which the premium is invested. The NAV applicable at vesting is the higher of the
guaranteed NAV and the then prevailing NAV. The policy value at date of vesting
is also subject to the minimum guaranteed return.
43

*In case of surrender and Death Benefit payouts, guaranteed NAV will not be
applicable. There will be a cost of investment guarantee of 0.25% p.a. of Fund
Value which will be charged by adjustment to the fund NAV.

ICICI Pru LifeLink Pension SP at a glance


Minimum/Maximum Age At Entry 35/ 70 years
Minimum / Maximum Vesting Age 45 / 80 years
Policy Term 10 years





ICICI Pru Forever Life
ICICI Prudential Life Insurance presents ICICI Pru Forever Life. A
regular premium deferred pension plan that provides the security of
life cover during the Accumulation Phase and offers five ways to get
your pension, after retirement. When you retire, you can still continue
doing things you have always enjoyed. After all, you would like to
retire from work, not life.

ICICI Pru Forever Life at a glance


44

Modes of Premium Payment Yearly / Half yearly / Monthly
Minimum Premium Rs. 6,000 per annum
Minimum Sum Assured Rs.50,000
Minimum / Maximum age at entry 20 / 60 years
Minimum / Maximum age at vesting 50 / 70 years
Minimum / Maximum Policy Term 5 / 30 years

ICICI Pru Immediate Annuity
In your golden years worries about security and comfort become
greater. Presenting ICICI Pru Immediate Annuity from ICICI
Prudential, a plan that gives you the benefit of life time income. With
this unique plan, you can start getting your annuity immediately after
paying the premium.
ICICI Pru Immediate Annuity at a glance


Modes of Annuity Payment Yearly / Half yearly / Monthly
Minimum annuity payable Rs.12,000
Minimum / Maximum age at entry 45 / 80 years
Minimum / age at entry (spouse) 20 years
Minimum / Maximum Policy Term Not applicable



How does the pension plan work?
You need to choose the premium amount for your policy
45

After deducting the premium allocation charge, the balance
amount will be invested in the Pension Return Guarantee Fund
At vesting of your policy, you can choose from the available
pension options to receive your pension
In the unfortunate event of death of the Life Assured during the
term of the policy, your nominee will receive the Fund Value. The
guaranteed NAV does not apply on death















Why Life Stage Pension


46

Retirement time is the time to live your dream, dream that you have been
putting off as you never had the time for it. But your retirement dream has a
cost attached to it. We call this your retirement number.

To help you achieve your retirement number ICICI Prudential presents to
you, LifeStage Pension.

One of the most distinguishing features of this policy is that it has no
premium allocation charge for regular premiums which means 100% of your
money is invested. Whats more, the policy provides you with a unique
lifecycle-based strategy that continuously re-distributes your money across
various asset classes based on your life stage and risk tolerance, eventually
providing you with a customized retirement solution.

Invest today to attain your retirement number and fulfill your dream

47

Why Premier Life Pension


You have strived hard to achieve your dreams and have attained the best
comforts life could offer. After having reached this enviable and secure
position, wouldnt you like to continue living life on your own terms even
after retirement? If you think so, then you need a retirement solution that
not only suits your needs but also lets you retire RICH.
To help you achieve this, ICICI Prudential Life Insurance
presents PremierLife Pension Plan- a limited premium paying, unit-linked
pension policy designed for preferred customers like you.
This unique policy helps you customize your investments by
allowing you to decrease your premium contributions as well as allowing
you to boost your investment kitty by making top-ups at any time. Once you
arrive at your retirement age the accumulated value of your policy provides
you with a regular income (pension) for life
Why LifeTime Super Pension Plan
ICICI Prudential's LifeTime Super Pension policy is especially designed to
help you systematically save towards a joyful and satisfying retirement.
LifeTime Super Pension Plan is a cost-effective pension plan that delivers
great value in the long run. A regular-premium unit-linked pension policy,
48

LifeTime Super Pension ensures you earn a fixed income, for your entire life
after retirement. So you can relax and live moments that truly matter.

.Why Life Link Super Pension
ICICI Prudential's LifeLink Super Pension Plan has been especially
tailored for individuals who would much rather make a lump-sum
investment than pay premiums at regular intervals for their retirement
planning. A cost-effective single premium unit-linked pension policy,
LifeLink Super Pension Plan provides potentially higher returns that
ensure your golden years are secure and peaceful.

Invest in LifeLink Super Pension Plan today and watch your money
multiply every month, right up to the day you retire. Receive an assured
income from your retirement day, for the rest of your life. Read more about
the features and benefits of this plan.
Why ForeverLife

ICICI Prudential's ForeverLife is a complete insurance cum pension plan
that performs two crucial roles: it acts as a protective cover while you earn
for your retirement, and provides you with regular pensions once you
retire.
49

Why Immediate Annuity
Security and comfort during retirement is a top priority for everyone. It
forms the central aspect of a dream that everyone hopes to achieve and
realize at some point or the other during his or her life as a senior citizen.
If you fear that you've missed the bus as far as retirement planning is
concerned, there is no reason to despair. With ICICI Prudential's Single
Premium Product, you can start earning an annuity income immediately after
paying the premium. What's more, the annuity income is guaranteed for life
which means that the insurance company pays you and your spouse (as the
case maybe) a guaranteed pension till you live.
Tax Benefits on Insurance and Pension
Life insurance and retirement plans are effective ways to save taxes when
doing your year end tax planning.

To assist you in tax planning, the tax breaks that are available under our
various insurance and pension policies are described below:
Our life insurance plans are eligible for tax deduction under Sec. 80C.
1. Our Pension plans are eligible for a tax deduction under Sec. 80CCC.
50

2. Our health insurance plans/riders are eligible for tax deduction under
Sec. 80D.
3. The proceeds or withdrawals of our life insurance policies are exempt
under Sec 10(10D), subject to norms prescribed in that section.
Invest in ICICI Prudential Life insurance and retirement plans and avail of
these tax planning services to save tax at your year end tax planning!
ULIPs : An Introduction
Most importantly, what are ULIPs? Here, you will find all the information
you need to set your mind at ease about how to invest in ULIPs, and which
ULIP is right for you.

ULIPs are a category of goal-based financial solutions that combine the
safety of insurance protection with wealth creation opportunities. In ULIPs,
a part of the investment goes towards providing you life cover. The residual
portion of the ULIP is invested in a fund which in turn invests in stocks or
bonds; the value of investments alters with the performance of the
underlying fund opted by you.

51

Simply put, ULIPs are structured in such that the protection element and the
savings element are distinguishable, and hence managed according to your
specific needs. In this way, the ULIP plan offers unprecedented flexibility
and transparency.
Working of ULIPs
It is critical that you understand how your money gets invested once you
purchase a ULIP:
When you decide the amount of premium to be paid and the amount of life
cover you want from the ULIP, the insurer deducts some portion of the
ULIP premium upfront. This portion is known as the Premium Allocation
charge, and varies from product to product. The rest of the premium is
invested in the fund or mixture of funds chosen by you. Mortality charges
and ULIP administration charges are thereafter deducted on a periodic
(mostly monthly) basis by cancellation of units, whereas the ULIP fund
management charges are adjusted from NAV on a daily basis.
Since the fund of your choice has an underlying investment either in
equity or debt or a combination of the two your fund value will reflect the
performance of the underlying asset classes. At the time of maturity of your
52

plan, you are entitled to receive the fund value as at the time of maturity.
The pie-chart below illustrates the split of your ULIP premium:
53

Types of ULIPs
One of the big advantages that a ULIP offers is that whatever be your
specific financial objective, chances are that there is a ULIP which is just
right for you. The figure below gives a general guide to the different goals
that people have at various age-groups and thus, various life-stages.









Depending on your specific life-stage and the corresponding goal, there is a
ULIP which can help you plan for it.


54

PLANNING ULIPS FOR RETIREMENT
Retirement is the end of active employment and brings with it the cessation
of regular income. Today an increasing number of people have stated
planning for their retirement for below mentioned reasons

Almost 96% of the working population has no formal provisions for
retirement
With the growing nuclearisation of family structure, traditional
support system of the younger earning members is no longer
available
Developments in the healthcare space has lead to an increase in life
expectancy
Cost of living is increasing at an alarming rate

Pension plans from insurance companies ensure that regular, disciplined
savings in such plans can accumulate over a period of time to provide a
steady income post-retirement. Usually all retirement plans have two
distinctive phases


55

The accumulation phase when you are saving and investing during
your learning years to build up a retirement corpus and
The withdrawal phase when you actually reap the benefits of your
investment as your annuity payouts begin

In a typical pension plan you have the flexibility to make a lump sum
payment or a regular contribution every year during your earning years.
Your money is then invested in funds of your choice. You can opt to receive
the annuity at any time after vesting age (age at which you become eligible
for pension chosen by you at the inception of the plan).

Most of the Unit linked pension plans also come with a wide range of
annuity options which gives you choice in structuring the post-retirement
benefit pay-outs. Also at the time of vesting you can make a lump sum tax-
exempted withdrawal of up to 33 per cent of the accumulated corpus.

In a retirement plan the earlier you begin the greater you gain post
retirement due to the power of compounding.

Let us take an example of Gaurav & Hari. Both of them want to retire at the
age of 60. Gaurav starts investing Rs. 10,000 every year from the age of 25
till the time that he retires. In all, he would have invested Rs. 350,000. If his
56


investments were to earn 7% return every year, at the time of his retirement,
Gaurav will have a retirement corpus of Rs. 13, 82,368.

Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to
make up for the lost time, invests Rs.15,000 every year (which is 50% more
than Gauravs annual investment). So, by the time of his retirement, he
would have invested Rs. 3,75,000. And assuming the same annual return of
7%, he will end up with a retirement corpus of Rs 9, 48,735.













So, you see how despite setting aside more than 50% of Gauravs annual
contribution, Hari ends up with a retirement corpus which is almost a third
lesser than Gauravs. That is the power of compounding.

57

Which is why, it is never too early to invest in a ULIP for retirement
planning
Tax Benefits of ulip
ULIPs are an efficient tax saving instrument too .The tax benefits that you
can avail in case you invest in ULIPs are described below:

Life insurance plans are eligible for deduction under Sec. 80C

Pension plans are eligible for a deduction under Sec. 80CCC

Health insurance plans and critical illness riders are eligible for
deduction under Sec. 80D
The maturity proceeds or withdrawals of life insurance policies are exempt
under Sec 10(10D), subject to norms prescribed in that section.


58

ULIP s FAQ (FREQUENTLY ASKED QUESTION )
Q1. What is a Unit Linked Fund?
Unit Linked Fund is a pool of the premiums paid by the policyholders which
is invested in a portfolio of assets to achieve the fund(s) objective. The price
of each unit in a fund depends on how the investments in the fund would
perform. The fund is managed by the insurance companies.
Q2. What is a Fund Value and how is it calculated?
Fund Value is the product of the total number of units under the policy and
the NAV. The fund value for the purpose of claims, surrenders or any other
clause stated shall be calculated on the basis of NAV.
Q3. What do I get at the end of my policy term?
The benefit received at the end of policy term is termed as maturity benefit.
The policyholder is entitled to receive fund value as maturity benefit.
Q4. What will my family receive if something happens to me?
In the unfortunate event of death during the term of the policy, the person
appointed as nominee shall receive the higher of sum assured or the fund
value. There are also certain ULIPs in market which give sum of Fund value
& sum assured as death benefit.
59



Q5. Is investment return guaranteed in ULIPs?
Investment returns from ULIP may not be guaranteed. In unit linked
products/policies, the investment risk in investment portfolio is borne by
the policy holder. Depending upon the performance of the unit linked
fund(s) chosen; the policy holder may achieve gains or losses on his/her
investments. It should also be noted that the past returns of a fund are not
necessarily indicative of the future performance of the fund.

Q6. Can I change / switch my asset allocation?
Yes, you can change the investment pattern by moving from one fund to
other fund (s) amongst the funds offered under a particular product. Such a
change between funds is termed as a Switch. There will be a flat charge
levied for any switch over and above the free switches.

Q7. Can I partially withdraw from my policy?
Yes, you can encash / withdraw a part of the fund anytime after completion
of three years, subject to surrender charges as applicable to each individual
plan.
60

RESERCH OBJECTIVE AND METHODOLOGY
RESEARCH PROBLEM
1) To establish an interface between the policy/plans makers and policy
takers, that how and in what manners they show there reaction
towards policy and plan.

Through the study we try to study and analysis the different
pension plans of the different company.
How people choose the suitable pension plan for them from
LIC.

2) We also want to know that how and in what manners the different
pension plan attract different age and salary group.





61

H HY YP PO OT TH HE ES SI IS S
Hypothesis is couched in terms of the particular independent and dependent
variables that are going to be used in study. Research hypothesis are specific
testable prediction made about the independent and dependent variables in
the study.

As data is not originally collected for use in the research project under
consideration, but rather for use some other project, by some other person in
terms of secondary data.
Usually the literature review has given background material that
justifies the particular hypothesis that is to be tested.

There exists two type of hypothesis that is to be :

Null hypothesis

Alternate hypothesis

In null hypothesis we assume that LIC pension plan work over the
other private insurance plan like ICICI prudential.

Alternate hypothesis if our assumption that the LIC pension plan work
over the other private company pension plan go wrong, alternate
hypothesis exists. It proves that ICICI prudential plan has greater
share.

62

RESEARCH METHODOLOGY

RESEARCH:-
Research is an organized and systematic way of finding answers
to question.
Research is an enquiry or examination to discover new
information or relationship and to extent and to verify existing knowledge.
Redman & Mory define research as a systematized effort to
gain new knowledge.

Methodology is define as
1. The analysis of the principle of methods, rules, and postulates
employed by a discipline or
2. The development of methods, to be applied within a discipline
3. A particular procedure or set of procedure.
Research design
The framework of conducting research is known as research design.
Research design is the plan, structure, and strategy of investigation
conceived so as to obtain answers to research question and to control
variance.
63


Types of research Design:-
There are three types of Research Design:-
1. Exploratory Research Design: - The major emphasis in exploratory
Research Design is on discovery of ideas and insights.
2. Descriptive Research Design: - The descriptive Research Design
study is typically concerned with determining the frequency with
which something occurs or the relationship between two variables.
3. Causal Research Design: - A Causal Research Design is concerned
with determining cause and effect relationship.
4. For the study, Descriptive Research Design was undertaken as it
draws the opinion of employees/workers on specific aspect
Why pension plans offer the best retirement solutions
Mohan Shahs father Prakash retired last year from Central Bank of India.
During his 29 years of service, he failed to opt for any pension scheme. And
being the sole earning member, Prakash retired with little savings. The little
that was there in his bank account was used up last December to pay for his
second daughters wedding.
64

Today, he and his wife live with Mohan and are forced to rely on their
children for financial support. But for how long? Having turned 60 last
month, and looking at the mortality tables, Mohans father has probably
another 15 to 20 years left. Added to daily expenses, in January this year,
Mohans mother was diagnosed with diabetes and has to take insulin
regularly.
This means medical expenses for Mohan. Health and medical costs have
increased manifold and will quadruple over the next 10 years. This is an
additional expense for Mohan, as doctors visits become a regular feature as
one ages. Its not just medical costs alone. Even daily expenses like food,
petrol and transportation end up costing more. A kilo of potatoes used to
cost just Rs 1.50 some time back. Today, a kilo costs Rs 8, and if inflation
rises at the annual rate of five to six per cent, 10 years from now potatoes
could cost Rs 43 a kilo! Petrol prices have equally shot up from Rs 17 a litre
10 years back to Rs 34-35 plus today, and could well rise to Rs 60 a litre 10
years from now. Enter pension, to reduce tension. Pension is all about
insuring oneself financially against the risk of living too long. It is about
fund management, long-term savings, protection and annuity income.
Moreover, investment in pension plans offers taxpayers a direct tax
deduction of Rs 10,000 from ones taxable income under Section 80 CCC
65

(1) of the Income Tax Act. Unlike Section 88, the tax benefits under this
section are available to persons in all income brackets. Even for those
eligible to save tax under Section 88, the saving on an investment of Rs
10,000 is higher in the case of pension plans. The tax saved is Rs 3,150,
whereas under Section 88 a Rs 10,000 investment yields a maximum tax
rebate of Rs 2,000. However, one doesnt invest in pension schemes only for
tax savings. Considering the high cost of living and falling interest rates,
people ought to be saving far more than Rs 10,000 a year if they wish to
retain their present lifestyles. Take the Life Insurance Corporations (LIC)
Jeevan Suraksha pension plan. A 30-year-old paying Rs 10,238 every year
for a term of 20 years will be entitled to a pension of just Rs 14,200 per
month on retiring at the age of 50. LIC assumes an annual bonus rate of Rs
65 per Rs 1,000. This is purely an illustration, which could vary depending
on interest rates and investment strategies. A pension plan also allows a
policyholder to withdraw a certain percentage of the accumulated funds on
retirement to take care of some large expenses. Most of the private players -
ICICI Prudential, HDFC Standard Life, Tata AIG and Aviva Life - have
followed in the LICs footsteps and offer a maximum withdrawal of 25 per
cent of the accumulated corpus at the time of retirement. OM Kotak
66

Mahindra Life is the only one to offer a maximum withdrawal of 33 per cent
of the accumulated amount.
Should you not opt to withdraw a part of the accumulated corpus, you can
expect a monthly pension of Rs 12,388 based on LICs current indicative
calculations. A lot, however, depends on interest rates at the point of
retirement. A warning is in order, though: The incentive to save more than
Rs 10,000 is low because the balance has to come from post-tax income. On
the other hand, if you do save more and entitle yourself to higher pension,
that pension income will be taxed again as normal income. So, its a double
whammy double taxation of pension savings and pension income. Yet,
Mohan, learning from his fathers failure to save for post-retirement life,
signed his first pay cheque away towards the purchase of an ICICI
Prudential pension plan. He plans to religiously put aside Rs 20,000 every
year to get himself a worthwhile pension and in the hope that the
government will increase the tax deduction in the years to come. Meanwhile,
his life gets covered during the savings/ accumulation period. ICICI
Prudential also offers a health cover and guarantees capital protection during
the accumulation phase. To be sure, pension plans are not the only available
instruments in the market today for long-term savings. During the
accumulation phase, one could opt for mutual funds, the governments tax-
67

free bonds, the public provident fund, or government securities. But there is
no tax exemption or inherent life cover in mutual funds; in the case of PPF,
you get section 88 benefits for incomes up to Rs 5 lakh, but not above. The
interest is, however, tax-free. Some infrastructure bonds also offer Section
88 benefits.
HOW MUCH PENSION?
In retirement planning, one needs to calculate backward to figure out how
much one should invest - with or without tax breaks. First, ask yourself
when you wish to retire. Then, what kind of income do you need to maintain
your present standard of living. If you think you need Rs 10,000 a month
(pre-tax) if you were to retire today, assuming a six per cent inflation rate,
you would need Rs 17,908 after 10 years, Rs 23,965 after 15, and Rs 32,071
after 20 years. If you assume a more benign inflation rate of, say, four per
cent, the required amounts would be Rs 14,802, Rs 18,009 and Rs 21,911
after 10, 15 and 20 years of saving. You will then need to talk to your
pension plan advisor and figure out what you need to put away every year to
achieve your targeted pension income. We have to, of course, assume that
taxation will be indexed to inflation - in which case your post-tax income 20
68

years from now will be similar in real terms to what it is today for a pension
income of Rs 10,000 per month.
Pension plans rise in insurance co portfolios

Can I lead a comfortable life after my retirement
? That's a question an increasing number of people are
asking themselves.
And that's the reason why pension plans today contribute about 30% of the
insurance industry's total business . The industry is seeing a 20%-25 %
annual growth in pension policies and a 50% growth in premium. "The
average premium for pension plans is higher ," says Amit Gupta, director for
marketing in ING Vysya Life Insurance. At ING Life, pension plans used to
contribute 4%-5 % of business in 2006. But in 2008, that's grown to about
10%. For Bharti AXA Life, the retirement product , which was launched in
January 2008, contributed 20% of the total premium in the year.

Most private companies do not offer pensions, and employees are typically
dependent only on their provident fund for retirement financing, which in
most cases is insufficient to maintain current living standards. That's the gap
pension plans are seeking to fill. "Pension plans are mainly targeted towards
69

couples in the age group of 35 and 45 years. Couples at this age would have
completed saving for their protection needs, would have children who are
slightly older and would be now interested in planning for retirement ," says
Gupta. Young couples are also beginning to plan for retirement, but this is
still a relatively small proportion and is largely seen in metros.
Financial planners say it is best to start investing in a pension plan early in
life, like 25-35 years, in order to get a meaningful deferred annuity
. As the gap reduces between the contribution period and the vesting period
the pension amount becomes smaller.
A global survey on retirement trends conducted by AXA in 2008 revealed
that the working population in India expects to have a better quality of life or
at least maintain the current life standards postretirement.
"The survey covered 26 countries and Indians were the most optimistic.
The optimism is not supported with financial planning, as 56% of the
population hadn't started preparing for retirement," says the survey.
Insurance companies say major concerns among people in pension planning
relates to deciding the right time to invest and choosing a plan that provides
payout beyond a certain age.
70

Companies are coming with products to cater to different needs. "We
have a product that allows people to increase contribution to the retirement
kitty," says Shyamal Saxena, chief marketing officer of Bharti AXA.

Did you say retirement is all about surviving on a
meager pension?

Banish the thought. With the market flush with different types of schemes,
you need not walk into the twilight zone with empty pockets. In fact,
retirement solutions are suddenly in demand with people becoming more
aware of the need to save for the sunset years. Particularly in a country like
India where, according to a survey by the Invest India Economic
Foundation, less than a sixth of those about to retire in the next 10 years are
covered by some form of pension, and only 2% of those not working in
government (where pensions are generous) being able to fund their retired
lives even if they cut expenses by half, the need for retirement plans is
inevitable.
Surprisingly, in sharp contrast to times when only traditional pension plans
were available in the market, the entry of private insurance players has
changed the scenario, as also the profile of the products. Pension plans today
are more oriented towards the model of ULIPs (unit-linked insurance
products) because of their ability to provide better returns on the back of
71

robust stock market performances, as is the norm abroad.
Says Bert Paterson, managing director, Aviva India: In the last 20-25 years,
traditional products have taken a back seat in the developed markets. Now
more than 80%-90% of people invest in unit-linked products for both
pensions and life insurance.
. Aviva Indias PensionPlus, ICICI Prudentials LifeLink Super Pension and
LifeTime Super Pension, TaTa AIGs InvestAssure Gold, SBI Lifes
Horizon II Pension and Reliance Golden Years Plan are some of them.
Furthermore, as the insurance companies providing these plans have
increased manifold, there are more product choices before investors than
ever before.
Even within the ULIPs, investors have choices in terms of varying their
exposure to the equity markets by choosing an aggressive or dominant
pension fund, says Ashish Kapur, CEO, Invest Shoppe India Ltd, adding
that for instance, an aggressive pension scheme would invest up to 60% in
equity and the rest in debt-oriented avenues, while the conservative plan
would have a nominal exposure of 10-15% to equity.
Conventional pension plans, on the other hand, invest a major portion of the
premium amount in bonds and government securities (G-Secs). That is why
the returns are on the lower side there, say investment experts. And if one
72

were to factor into the equation an annual inflation figure of approximately
5%-6% per annum, then the real return figures look even more
unimpressive. As against this, unit-linked pension plans are said to be giving
returns of 25-40% in some cases.
ICICI Prudentials Life Time Pension Plan, for instance, allows one to
choose from three options Income, Balanced and Growth. While the
Income fund is 100% invested in debt instruments, the Balanced and Growth
options provide flexibility to allocate up to 40% and 90%. Likewise, Avivas
PensionPlus comes with three fund options Balanced, Growth and Secure.
And the same is the case with most other plans. Thus, depending upon their
risk appetite, the customers can choose which fund option to go for.
For a risk-averse customer, a Secure Fund or the Protector Fund is
advisable as most of the money is invested in government bonds. For
someone wanting returns and willing to take risks, a Growth fund is the best
where most of the money is invested in equities, says Paterson.
Besides, according to experts, unit-linked products have distinct advantages
over traditional ones. Firstly, they are transparent. A customer can track the
value of his investments on a daily basis as the NAV is published in leading
dailies and on the websites of the companies. Further, all charges on the
policy are shown to the customer.
73

Secondly, they are flexible. Every insurance company has four to five
ULIPs with varying investment options, charges and conditions for
withdrawals and surrender. Moreover, schemes have been tailored to suit
different customer profiles and, in that sense, offer a great deal of choice,
says Kapur.
Thirdly, ULIPs offer liquidity to the individual as he can withdraw money
anytime he wishes to after the initial lock-in period without a surrender
charge. This is unlike conventional endowment plans where individuals tend
to lose out on surrender charges on surrendering their policies.
Other advantage are that since the investments are made for long periods, the
chances of earning a decent return are high. Also, the premiums paid for
ULIPs are eligible for tax rebates under Section 80C which allows a tax
deduction of premiums paid within the overall ceiling of Rs 1 lakh. Further,
proceeds from ULIPs are tax-free under section 10(10D), unlike those from
a mutual fund which attract capital gains tax. This, however, doesnt mean
that one should opt for unit-linked products without taking any precaution.
It also makes eminent sense to avoid putting all your eggs in one basket.
More so, since none of the private insurers has a performance track record
available for evaluation. Although LIC has been around for decades, it has
opted out of assuring returns as it did in the past. So spread your investment
74

over plans of more than one company, but not at the cost of your investment
objective and risk profile, advises Kapur. Also, a prudent factor while
choosing a pension plan is that it should preferably be a pure pension plan.
Frills like life insurance cover and accident or critical illness riders should
preferably be avoided.
75

COMPRATIVE ANALYSIS OF LIC AND ICICI
PRUDENTIAL WITH OTHER INSURANCE
COMPANY
There are a total of 13 life insurance companies operating in India, of which
one is a Public Sector Undertaking and the balance 12 are Private Sector
Enterprises.
List of Companies are indicated below:-
NAME OF THE LIFE INSURANCE COMPANY AND
THE SHARE HOLDING PATTEN
Name of the company Nature of Holding
Allianz Bajaj Life Insurance Co Private
Aviva Life Insurance Private
Birla Sun Life Insurance Co Private
HDFC Standard Life Insurance Co Private
ICICI Prudential Life Insurance Co Private
ING Vysya Life Insurance Co. Private
Life Insurance Corporation of India Public
Max New York Life Insurance Co. Private
MetLife Insurance Co. Private
Om Kotak Mahindra Life Insurance Private
Reliance insurance Private
SBI Life Insurance Co Private
TATA- AIG Life Insurance Company Private
76



MARKET SHARE OF INSURANCE COMPANY (%)
Name of the Player Market share (%)
LIFE INSURANCE CORPORATION OF INDIA 82.3
ICICI PRUDENTIAL 5.63
BIRLA SUN LIFE 2.56
LIC 2.03
SBI LIFE INSURANCE 1.80
HDFC STANDARD 1.36
TATA AIG 1.29
MAX NEW YARK 0.90
AVIVA 0.79
OM KOTAK MAHINDRA 0.51
ING VYSYA 0.37
MET LIFE 0.21

PRESENT SCENARIO OF INSURANCE INDUSTRY

India with about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for
global insurance majors. The insurance sector in India has come to a position
77

of very high potential and competitiveness in the market. Indians, have
always seen life insurance as a tax saving device, are now suddenly turning
to the
private sector that are providing them new products and variety for their
choice.
Consumers remain the most important centre of the insurance sector. After
the entry of the foreign players the industry is seeing a lot of competition
and thus improvement of the customer service in the industry.
Computerization of operations and updating of technology has become
imperative in the current scenario. Foreign players are bringing in
international best practices in service through use of latest technologies
The insurance agents still remain the main source through which insurance
products are sold. The concept is very well established in the country like
India but still the increasing use of other sources is imperative. At present
the distribution channels that are available in the market are listed below.
Direct selling
Corporate agents
Group selling
78

Brokers and cooperative societies
Bank Assurance
Customers have tremendous choice from a large variety of products from
pure term (risk) insurance to unit-linked investment products. Customers are
offered unbundled products with a variety of benefits as riders from which
they can choose. More customers are buying products and services based on
their true needs and not just traditional money back policies, which is not
considered very appropriate for long-term protection and savings. There is
lots of saving and investment plans in the market. However, there are still
some key new products yet to be introduced - e.g. health products.
The rural consumer is now exhibiting an increasing propensity for insurance
products. A research conducted exhibited that the rural consumers are
willing to dole out anything between Rs 3,500 and Rs 2,900 as premium
each year. In the insurance the awareness level for life insurance is the
highest in rural India, but the consumers are also aware about motor,
accidents and cattle insurance.


79





80













81


COMPRATIVE ANALYSIS OF ULIP PENSION
PLAN OF LIC AND ICICI PRUDENTIL
Profit Plus(LI C) Premier Life
Gold(I CI CI )
PPT Single,3,4,5 year 3 or 5 year
Minimum premium 20,000 for single mode
10,000 for others
1,00,000 for 3 year
60,000 for 5 year
Min. Entry age 0 years 0 year
Max. Entry Age 65 years. 69 year for term 3
year
65 year for term 5
year
Minimum Policy Term 5 years 6 year for PPT 3 year
10 year for PPT 5
year
Maximum Policy Term 20 years 30 years
Partial withdrawal Allowed after 3 years Allowed after 3 years
On death Higher of Sum
Assured or the
Policyholders Fund
Value
Sum Assured or fund
value whichever is
higher
Allocation Charge:
Profit plus
Under single premium mode it is only from 4.5 to5 %.
For PPT of 3 to 4 year in the first year it is between 9 to 10.5 % and
2.5% in the subsequent years.
82

For PPT of 5 year it is quite high. It charges between 22.5 to 24 % in the
first and 4% in the subsequent years.
The allocation charge depends on amount invested, higher for less
investment amount.
Premier Life Gold (ICICI)
For 3 years PPT it charges 12 % in the first year and 4% in the
subsequent years
For 5 years PPT it charges 12% in first year,4% in 2
nd
and 3
rd
year and
2% for remaining years.
Mortality charges:
Profit plus
For 25 year healthy male it comes to 1.42 Rs. Per 1000 S.A
Which comes to Rs. 142 per 1 Lac?
Premier Life Gold (ICICI)
Here they charge separately for male and female
For 20 years male it is Rs. 1.33 per 1000 Rs. S.A
For 20 years female it is Rs. 1.26 per 1000 Rs. S.A
Fund management charge
Both charges same fund management charges
It is in the range of 0.75 % to 1.50 % Per annum and calculated on daily
basis.
Policy administration charge:
LIC charge Rs. 60 per month in the first year and Rs. 20 for the
subsequent years.
83

ICICI charge Rs 60 per month.
Switching charges:
COMPRASION OF ICICI PRUS FOREVER LIFE,LICS
JEEVAN SURAKSHA AND HDFCS STAINDARD LIFE.
Particular
s
ICICI Pru
Life
LIC
HDFC
Standard Life
Type Forever Life
Jeevan
Suraksha-1
Personal Pension
Plan
Sum Assured/Notional Cash Value
Min. Rs. 50,000 Rs 50000 Rs.25,000
Max. No Limit No Limit No Limit
Riders
Accident &
Disability Benefit,
Critical Illness
Benefit, Major
Surgical
Assistance, Level
Term Cover
Term Assurance
Option only
No Rider available
Maturity Option to take 25%
of corpus in
lumpsum &
balance 75% as an
annuity/ Annuity
on full corpus.
Option to take 25%
of corpus in
lumpsum &
balance 75% as an
annuity/Annuity on
full corpus.
Option to take 25%
of corpus in
lumpsum &
balance 75% as an
annuity. Annuity
on full
corpus/Annuity on
84

full corpus.
Death (During
deferment)
Regular Income
stream to spouse if
the spouse is not
alive a lumpsum
amount is paid to
the
Nominees./Spouse
has option to take
100% of Sum
assured+bonuses+
+guaranteed
additions (if death
after 7 years of the
policy)
All premiums
(excluding term
assurance premium
and extra premium
if any) paid up to
the date of death
accumulated at the
rate of 5% p.a.
compounded or at
such rate decided
by the LIC from
time to time will be
paid to the nominee
All Premiums paid
up to the date of
death accumulated
at the rate of 8%
p.a. compounded
will be paid to the
nominee or
(Notional Cash
Option+Bonus +
terminal bonus),
whichever is lower

Death (After
deferment)
Spouse/beneficiarie
s benefits Depends
upon Annuity
option chosen
Spouse/beneficiarie
s benefits Depends
upon Annuity
option chosen
Spouse/beneficiarie
s benefits Depends
upon Annuity
option chosen
Surrender guaranteed
surrender value is
payable after 3
years premiums are
guaranteed
surrender value is
payable after 2
years premiums are
guaranteed
surrender value is
payable after 3
years premiums are
85

paid paid paid.
Open Market
Option
Available Not Available Available
Life Cover Available Not Available Not Available
Postponement of
vesting age
Available Not Available Not Available
Spouse Pension
after policy
holder
100 % 50 % 50 %








86

FINDINGS

People are not aware about the pension plan so insurance agent should
make aware about the pension plan and its benefits.
Pension plan are so minimum in numbers so people not find pension
plan according to their earning and requirements.
Pension is provided only to government employees and big company
employees so pension plan in insurance company has bright future.











RECOMMENDATION

87

We need to make people aware about the pension plan in rural and
semi urban area about the pension plan and its benefits.
Insurance agent and advisors need to give only those plan which are
fulfilling the requirement and needs in a best way.
Both LIC and ICICI PRUDENTIAL should make some pension plan
for those who are nit economically sound, so they can also secure
their future.
Insurance company should have some more plan in Pension category
as they have in other category like Health and General insurance.
Pension plan should be more convenient; with the pension plan health
plan should be provided because in the old age expenses on health
related is increased.


88

C CO ON NC CL LU US SI IO ON N
On the basis of the data collected it can be conclude that private
companies have posed a challenge of the public sector. It all has been
possible because of the effective marketing strategies and product innovation
of the private players. though ICICI still enjoys a huge market share of about
90% , Still it has been estimated by eminent economists that by the year
2008 it can loose a share less than 50%.
Since the private insurance companies have not penetrated the rural
market therefore they are not in a position to acquire the well-established
market of ICICI with that much ease. So in order to take a ride over ICICI,
they should emphasize on the Rural sector as well. LIC entered the market
nearly in the same year yet, LIC got the advantage of its product
innovational and apt marketing strategy which included the product
promotion on a mass scale through media advertising and well-trained sales
force.
The need for Life Insurance is to cover 3 contingencies i.e.,
Contingency of Death, Old Age And Critical illness & Disability However,
Life Insurance in India has traditionally been bought for tax benefits and as
an investment product which creates a greats opportunity to develop the
89

market. India has a Life Insurance penetration of less than 40% of the
population and premium which is 2 % of GDP averaging $5 per capital
compared to above $3000 for Japan and USA. Thus the opportunity to
segment the market in terms of geography, Demographics, Psychographics
and needs in tremendous.

90

QUESTIONNAIRE

Quest: - Do you know about life insurance?

Ans: - Yes NO

Quest: - DO you know the purpose of life insurance?

Ans: - Yes NO

Quest: - What is the purpose of insurance?

Ans: - Risk cover Tax Benefit

Saving All

Quest: - Do you know about life insurance companies?

Ans: - Yes No

91

Quest: - Do you know about LIC?

Ans: - Yes No

Quest: - Which company you like most Pension plan life ?

Ans: - LIC ICICI Prudential

Quest: - Why you like that company because of LIC?

Ans: - Service Policy

Quest: - Have you any policy of any private life insurance
Company ?

Ans: - yes No

Quest: - If yes: of which company?

Ans: -
92


Quest: - Are you satisfied with the service of company?

Ans: - Yes No

Quest: - Are you going to purchase next life insurance policy?

Ans: - Yes No

Quest: - If yes: which company you prefer?

Ans: -

Quest: - Why you preferred that company?

Ans: -
Quest: Are you availing any type of insurance service with Pension Link
Plan from any insurance company?

( ) Yes ( )No
93


Quest: In your view, which is beneficial in the investment perspective?

( ) Debentures ( ) Unit Link Plan

Quest: If given the option which type of ULIP will you prefer?

( ) Single premium ( ) Regular term premium

Quest: In your opinion which company has better reputation in the
ULIP market?
( ) ICICI PRUDENTIAL ( ) LIC


Quest: If the answer of the above is LIC give reasons?

_____________________________________________________________



94

Quest: Would you like to invest in the new launched ULIP of LIC ?

( ) Yes ( ) No

Any Suggestions

_____________________________________________________________
_____________________________________________________________
___________________________________________________________
95

BIBLIOGRAPHY
Book offer: A Common Sense Approach to Industrial Marketing by Ray
Vitullo. Copyright 1996, 100 pages, paperback. Go to Contact MC, request
the book, and please consider making a contribution through the Amazon
Honor System in the righthand column. For shipments outside of North
America, U.S. Postal Service rates for sending an 8 oz. book will be quoted.
To recommend a book, or to inquire about partnering in its marketing,
Contact MC
For details on books and to buy them, go to Amazon
Age of Competitive Intelligence, John McGonagle, Quorum Books 1999
Built to Last: Successful Habits of Visionary Companies, James C. Collins
and Jerry I. Porras
Death March: The Complete Software Developer's Guide to Surviving
'Mission Impossible' Projects, Edward Yourdon, June 15, 1999
Designing Web Usability by Jakob Nielsen, New Riders Publishing, 1999
96

Going To Market: Distribution Systems for Industrial Products by Corey,
Cespedes, and Rangan
Good to Great: Why Some Companies Make the Leap... and Others Don't,
James C. Collins and Jerry I. Porras, October 2001
Introduction to Decision Analysis, David C. Skinner, Probabilistic
Publishing. TIFOE.com
Kotler on Marketing: How to Create, Win, and Dominate Markets, Philip
Kotler, April 1999
Lean Thinking: Banish Waste and Create Wealth...James P. Womack
Mail and Telephone Surveys: The Total Design Method, Don A. Dillman
Managing Marketing: Text, Cases, and Readings, Thomas V. Bonoma,
December 1995
Marketing Management: Millennium Edition, Philip Kotler, July 1999
Marketing Management: Analysis, Planning, Implementation, and Control,
Philip Kotler, June 1999
Mitsui: Three Centuries of Japanese Business, John G. Roberts
97

Molecular Biology of the Cell, Third Edition, Bruce Alberts, Dennis Bray,
Julian Lewis, Martin Raff, Keith Roberts, James D. Watson
My Life in Advertising and Scientific Advertising, Claude C. Hopkins
Ogilvy on Advertising, David Ogilvy
Process Consultation Revisited : Building the Helping Relationship, Edgar
H. Schein
Presentations Plus, David A. Peoples
Tangled Web: Tales of Digital Crime from the Shadows of Cyberspace,
Richard Power (Que)
The Innovator's Dilemma: When Technologies Cause Great Firms to Fail,
Clayton M. Christensen
The New Strategic Selling : The Unique Sales System Proven Successful by
the World's Best Companies, Stephen E. Heiman, January 1998
The Road to Serfdom, Friedrich Hayek, with introduction by Milton
Friedman
The Soul of a New Machine, Tracy Kidder, June 2000
98

Uncertainty: The Life and Science of Werner Heisenberg, David C. Cassidy,
WH Freeman & Co., 1993
You Say You Want a Revolution: A Story of Information Age Politics, by
Reed E. Hundt
What is Mathematics? by Richard Courant, Herbert Robbins. Originally
published in 1941. Albert Einstein gave it an excellent review: "A lucid
representation of the fundamental concepts and methods of the whole field
of mathematics...Easily understandable. (Editor's note "hmmm...")
Websites:-

ICICI Prulife.com
ICICI prudential life insurance
wikipedia.com.
India housing.com.
LIC india.com
Book Referred

Research Methodology - C.R. Kothari

99

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